August 21, 2013
Advertising giant Interpublic Group is joining television and radio companies to build and test an automated ad-buying system for TV and radio. The new system will take advantage of new technologies and give traditional advertising equal footing with digital advertising. Despite concerns regarding effects on pricing, the approach may also make ads more effective and more valuable. Some companies have already begun using similar systems in their advertising.
Interpublic Group is joining companies such as A&E, Clear Channel, Tribune and Cablevision to create and test this system, according to the involved companies. NBCUniversal is participating in talks, but has yet to join.
“The system, which Interpublic says could be operational within six months, comes as television faces growing competition from online media, where automated systems have long been used for search ads and increasingly online display,” explains The Wall Street Journal. “Executives on both the buying and selling side of advertising say that automated systems make it possible for advertisers to use data about consumer habits to better target their ads at the people they want to reach.”
“There is so much intelligence and data out there, we have to capitalize on that and it cannot be restricted to digital media,” said Matt Seiler, chief executive of IPG Mediabrands, the Interpublic division creating the ad system. “Digital has paved the way for the reinvention of the rest of the media.”
An automated system that can permit more data to be used in ad buying in traditional media will position traditional “media companies on a level playing field” with digital media providers, notes Mel Berning, president of ad sales at A&E Networks.
For years, advertisers have criticized TV’s antiquated ad-sales methods. ”The process of choosing and placing television advertising is labor intensive, very complicated, expensive, and challenging and not very user friendly,” said Tad Smith, Cablevision’s president of local media.
The system will be more automated and will let media buyers see the inventory of TV ads and radio outlets that are available, according to executives involved in the IPG plan. Buyers can select the appropriate ads based on data and media habits the ad buyer has on its customers.
There are concerns that an automated system will drive down prices. But with the proper targeting, advertising time can become more valuable, and reduce some waste on TV ads.
Visible World Inc., a New York ad technology company, released an automated buying system earlier this year that can access inventory from cable providers and small cable networks, and IPG Mediabrands has used the system for several ad campaigns.