CAMPAIGN-I: Spotlight on: MediaPort - Will MediaPort succeed where other online platforms failed? The media trading site has some heavyweight industry backers, Alasdair Reid says

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

WPP.



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

possible."



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

tidy.



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

cheap.



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

them."



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

parochial.



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."



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