Friday, April 06, 2007

"You cannot bore people into buying your product." David Ogilvy

The always amazing Paul Gallis checked in to say everything is looking good for next month's big reunion. Chicago Music Row will happen Tuesday, May 8 at Yolk, 1120 S. Michigan Avenue. 3pm until the last story is told. Open to all who work or have worked in or around the Chicago music scene. Radio, records, retail, A&R, producers, distribution, sales, venues. More info here. Clark Weber and Jim Scully are the event's MCs with Paul. This should be one to remember. See you there!

More than spots & dots: The eBay TV ad sales exchange seems to be in trouble - no inventory. The platform funded by HP, Home Depot and Phillips will not be supported by the cable networks. Louise Story writes Cable TV Networks Boycott eBay Ad Exchange via NYT here. "We don't believe that eBay is going to get this right" says CAB prexy Sean Cunningham. Ouch!

The seven cable networks that tested the exchange over the last month decided it went too far in removing humans from the ad sales process. Cunningham added "The grand-majority is about idea driven packages that have got multiple consumer touch points that activate these brands." So he seems to be saying it's more than spots and dots. More than push print and buy.

If one is able to book almost anything online these days why is it just not possible to book advertising? First, what's being done today is not simply booking, it's online negotiating - it's one kind or another of ad auction. My sense is the hurdle here is all about the bid ask, the process. This is about seller fears. The fear inventory will become a commodity. The fear of a collapse in pricing. The fear of losing pricing power. The fear of those paying full retail migrating to wholesale. Exchanges offering remnant inventory face an even bigger challenge. Why is the buyer not able to buy the good stuff?

What broadcast and cable are having a difficult time letting go of is "the deal." The process. Sellers making deals with their clients with the help of their managers. Some bonus weight here, a bit of value-added there, tweaking the pricing, adjusting the dayparting, add the cool idea and voila! The deal is done. Can't this be done online? Of course but offline haggle is in the seller dna. The selling more art than science with a dash of sport.

The flaw is the liquidator model

"Price becomes an objection when you fail to articulate value" said my dear friend Norm Goldsmith. Media should take a lesson from the successful. Do what The Four Seasons does. Put all of your inventory online. Allow customers to add promotions, signature sponsorships and other "touch points" from a comprehensive menu. If one can design a car or five star holiday online it should certainly be possible to design an ad campaign online. Use your online platform to manage all of your inventory - prime, off prime, promotions, remnant, everything. What's wrong with the exchange idea is the exchange idea. An auction of some inventory has narrow, limited appeal and self limiting potential.

A better start would be an exchange as one moving part of a robust sales platform rather than the entire platform being nothing but auction. Sell full retail, subject to some real-time pricing supply/demand dynamics (think airlines, hotels, et al), and sell off discounted inventory that needs to be moved. Offer incentives to book online. Perhaps you have buyers earn access to the discounted inventories? Require buyers to qualify for access to the exchange portion of the platform. But sell everything. Make it easy for the customer to buy at any price.

YES, this does put your sellers in competition with the platform. The more realistic pov is your sellers are an important part of your sales platform, so is your national rep. The business case for moving forward is clear. If you always do what you've always done, then you'll only get what you've always gotten. To succeed sooner you must learn to fail faster.

There is more than one right answer here. It's not either or it's AND.

P.S. Nothing says you can't have it both ways and then some. Sell online, sell offline to customers who prefer face calls, personal contact, and lots of service or some combination to meet every customer need. High tech with high touch options. No one is going to like that approach but the buyers. Google or Microsoft will probably be the first to make it happen.

All it will take is a broadcaster or a network with nothing to lose.

Congrats & cheers: Joey Vartanian, King of Chicago night life, on his 25th year in the bar trade.