New Buying Models In The Wind?

I’d like to take this week’s space to talk about a thread that started last Thursday on the ClickZ Forum. Seems a trusted source of Richard Hoy, our esteemed moderator, had heard that Excite planned to change the way it sells advertising in 2000.

This source, who chose to remain anonymous, said Excite will allow advertisers to bid on inventory, with only one opening bid and one “comeback bid.”

Most of the media planners who responded to this news item offered negative comments. There was no official word from Excite with regard to this supposed new policy. But three planners (other than myself) hooted and hollered about the effects on the industry if the rumor were to be true.

I haven’t heard from Excite directly about whether or not this auction format will be implemented, and I’m not going to use this space to rant and rave as some people might expect me to. Until someone from Excite tells me directly that they are going to subject the industry to this process, I’m not going to be judgmental.

However, let’s look at the online ad buying industry overall and see if we can’t learn something from some of the new policies being introduced for ad buys.

First of all, it’s important to note that the traditional way of doing ad buys (based on the traditional advertising model) is not law. While I think it would burn a lot of bridges with agencies if media properties chucked the entire process and procedure out the window, there is little else holding the industry to it.

If some of the larger portals want to throw some interesting twists into the process, it will likely make the agencies freak out. But remember that there are new dot-com companies coming to the online advertising marketplace every day.

Many of these companies don’t bother with agencies and buy their advertising directly. If these less-experienced buyers want to pay the premium CPM for inventory that’s been sold for $5 and under, I could understand how ad portals would want to develop a process by which they can capitalize on these opportunities.

Agency planners are going to be upset about some of these changes to the process. In last week’s ClickZ Forum thread, one of these planners, who has been in this space for as long as it has existed, even asked, “What are these guys, high?”

Regardless of who has been smoking the funny stuff, the industry has been showing signs of rejecting portions of the traditional ad buying model. Remember when we talked about this stuff a couple weeks back?

  • Non-cancelable agreements

  • No formal reservations of inventory
  • No hard and fast ad view guarantees

Maybe what we’re actually seeing here is an acknowledgement of the fact that across-the-board falling CPMs are beginning to wear down the ad portals. It also may be an acceptance of the fact that agency ad deals typically require a lot more effort to execute than deals cut directly with new dot com companies. (Those of us who work at agencies should feel pretty darned good about this. It means we’re doing our job well.)

As for how we should treat these little deviations from the model and from our expectations, I don’t think they call for an industry-wide boycott, as one planner on the ClickZ Forum thread suggested. If planners are uncomfortable with the new processes, they will shift the ad dollars appropriately.

The point is, portals probably understand what they’re doing when they make a decision to deviate from the traditional model. They wouldn’t likely place their agency relationships in jeopardy unless they had a good reason. The good reason is that they have other folks that are willing to pay more for their inventory and are willing to agree to terms that most agency planners would laugh at.

I’m not by any means suggesting that agencies should simply “deal with” any deviations from the traditional model that make them uncomfortable. What I do suggest, however, is to do business on your own terms.

If a site wants to force you through a process that makes you or your clients uncomfortable, don’t go along with it. Instead, keep in mind that the web has the most advertising environments of any medium and that there are other places to spend your money. The web is a place where evolution is the only thing in which one can have absolute faith. Let’s let these new ad buying models evolve a bit. If they truly do suck, they’ll be selected against.

As a final note, please be sure to read your insertion orders and contracts for CY2000 advertising very carefully – if these deviations from the norm end up throwing everybody’s expectations off, you might be better off developing your own contracts and insertion orders for the media properties to sign. Set your expectations for your own buys and make sure they are fulfilled.

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