Media Buys Made Simple

SAN FRANCISCO (01/27/2000) - While banner ad deals have been brokered online for years now, to date the Internet hasn't made much impact on media buys for TV and radio.

Two companies are jockeying to change that. AdAuction launched the first online auction of premium network advertising on Jan. 17, the same day BuyMedia.com announced it had received $45 million in funding from Internet Capital Group.

Media buyers traditionally have had to pore through listing books to find appropriate stations, fill out a request form asking for available spots that match a target market, fax the requests and wait - an endeavor that can take hours.

"It used to be that I'd pull out three huge books and then spend hours making phone calls and faxing," complains Glenda Dietrich, media buyer for Fellers, a Lubbock, Texas, ad agency.

Long Ellis, director of broadcast network television for AdAuction, agrees:

"Much of [media buyers'] time is spent inefficiently."

BuyMedia CEO Mike Jackson aims to ease the media-buying process with an electronic database of 9,000 radio and TV stations that's integrated with a media buyer's software. After a buyer clicks on the desired outlets, BuyMedia contacts stations to request available ad space.

The service does more than save time. "Two weeks after signing up I got an order from a Midwest agency I wasn't aware of and wouldn't have called on," says Raymond Johns, head of Catamount, a broadcasting firm that owns three CBS affiliates.

Because of its low overhead, BuyMedia is able to charge stations a 3 percent commission fee, compared with the 5 to 20 percent fee charged by national ad rep firms. However, rep firms' contracts sometimes include exclusivity clauses.

In certain markets, Johns says he'd be obligated to pay commissions to both BuyMedia and a rep firm.

Since stations frequently change formats and owners, it will be critical for BuyMedia to keep demographic and pricing data current. Analysts also suggest BuyMedia is limiting itself by focusing on broadcast media. Still, more than 2,000 buyers have registered for the service, representing about $10 billion in annual ad power. The firm expects to process more than $500 million in station orders this year.

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