Yet another online trading system about to turn the media
marketplace on its head? Boring? Heard it all before? Of course you
have. Hardly a month goes by without someone, somewhere telling us
they're about to reinvent the way the advertising industry does business
with its most important suppliers - media owners.
And let's face it, the best that can be said for this particular
revolution is that it has had a chequered history. Sooner or later, each
would-be trading platform re-emerges as an auction site for distress
purchase inventory or it evolves into a media briefing service or a
rates and audience performance database.
This time, though, things might actually be different. There's never
been a proposed trading platform quite like this one. For a start it's
being backed a group of advertising agencies - which in itself raises
all sorts of intriguing and sensitive questions. And second, these
aren't just any agencies. Actually we're talking about the world's three
biggest advertising holding companies - Interpublic, Omnicom and
Their joint venture, which is called MediaPort, has set itself the task
of "creating an electronic platform that will improve the flow of data
and information related to the transaction of media time and space".
Its mission statement continues: "The company's primary focus will be to
connect media buyers, sellers and information providers through a
platform that provides common protocols. The platform will act as a
service through which data and information providers can be easily
accessed, replacing the fractured and labour-intensive process in which
media is exchanged today."
Which, of course, you can read in a number of ways. And some in the
industry have been voicing anxieties. Are advertising agency groups the
best people to own the trading platform? In other words, should a group
of buyers be allowed to act as intermediaries between a wider community
of buyers and sellers? And does this give an already powerful group of
agencies even more power?
MediaPort's chief executive, Michael Lotito, can, he hopes, lay those
worries to rest. He states: "Some facts we should be clear on right from
the start. We are not building a media exchange. We are not bringing the
buying power of the big three holding companies to compete with the
power of media sellers. We are looking to cause as little disruption as
So what exactly is the proposition? MediaPort, says Lotito, aims in time
to become an industry-wide, back-office system with common protocols
applicable to all types of media inventory. "We are talking about a
collaborative work space. It will involve a one-to-one channel that
replicates in many respects the way things are done today. Both sides,
the buyer and seller, will be able to manipulate the transaction until
they are satisfied with it. It's an electronic handshake, if you will -
and then it dumps to your financial system."
It saves time. It ensures there are no discrepancies. It's neat and
Yes. And? A back-office system that replaces paper invoices. So what's
the fuss about? Do earthquakes get any smaller than this? Well,
actually, the truth is that this is a mammoth undertaking. It won't come
That's why it takes the big three to get the ball rolling. And they wish
to emphasise that this will not operate in any area where media agencies
compete. Last, but by no means least, the company structure has been
designed to allow other agencies to invest too.
Will they? Possibly, John Perriss, chairman of Zenith Worldwide, says:
"We have always had a proactive relationship with people setting up
platforms and we were invited to join this one. The top line is that
there is still an awful lot of blue sky involved in this one and in some
respects it's still unclear as to what exactly it will be. It's
generally true with e-commerce platforms that we're a long way from
having anything that's workable. But we want to remain in dialogue with
However, some remain suspicious. One agency source argues that if this
protocol platform works, MediaPort will inevitably look to move further
forward. And that would reopen some of the awkward questions alluded to
above. Others say that it's inevitable that online systems will be
developed fastest by those on the buying side of the fence. Not only
inevitable but also essential. If media owners do it first, they'll want
to hook up with advertisers rather than their agencies.
But one thing is certain - the last thing the industry can do is stick
its head in the sand. On the other hand, we shouldn't expect things to
happen overnight. Derek Jones, the managing director of MediaTel,
comments: "No-one should underestimate the significance of people like
this coming together in this way. But the US market is massive and
whatever they do will take time. I don't think we can predict how they
will choose to develop it. I don't think that the industry should worry
about the fact that they are the big agencies. If you look around other
industries we can see many e-commerce platforms run by buyers."
Philip Shaw, the chief executive of ADazzle, agrees. He previously
worked in the oil industry where this sort of joint procurement platform
is already established. The ad industry, he argues, can't afford to be
He states: "It's not about broking or cornering the market. It's about
taking costs out of the market for both buyers and sellers and, of
course, there are substantial benefits here for media owners."