Ad auction seen downing upfront market

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NEW YORK -- The auction model of ad buying will more than likely fundamentally change the way Madison Avenue and content providers do business in the future.

That was the view of participants at a panel on the future of advertising held Tuesday morning at the PriceWaterhouseCoopers media conference.

"It's going to be here," predicted John Partilla, president of Time Warner Global Media Group.

While it wouldn't necessarily replace the upfront in the buying and selling of TV, Partilla suggested the auction model could transform the marketplace to the point where there might not need to be as many buyers and sellers. In the next five years, optimizers and other software could automate a lot of the transactions that are necessary now.

"I don't think we'll need as many people" on either the buying or selling side, Partilla said.

One of his counterparts on the media side, Omnicom Group Inc. executive vp Janet Riccio, said the commodization of media inventory in the coming years will lead to streamlining where what she termed "John's Ads R Us" would be compete with big conglomerates like Omnicom.

"An auction will be a piece of the puzzle," Riccio acknowledged. "I don't think it'll be the whole thing."

Elisabeth Vanzura, marketing director for the Cadillac brand of General Motors, said that there was a lot of competition for inventory on the top network shows and what she called "Tivo-proof" top events.

"Key media properties will become more valuable. We're all going to want them, and we're going to compete over them," Vanzura said. She said that it wasn't going to change in the near future although some brands are going to have to figure out innovative ways to pay for certain opportunities. Vanzura pointed to a partnership between Cadillac and XM Satellite Radio for the BET Awards as a way for both to be able to fit the event into budgets.

Another advertiser, Pepsi-Cola North America vp Ralph Santana, agreed that the upfront marketplace still works for the beverage maker although it's a smaller part of the mix.
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