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Monday, February 24, 2014

Automated TV Buying

Way back in 1978, my boss and I attended an ANA (Association of National Advertisers) conference in New York. One of the last speakers was a 1970’s tech whiz. He talked a bit about how the technology would soon be available where broadcast TV (cable was a very minor player then) could be sold on an auction market basis via computer. After his speech, I approached him and nervously asked a few questions. He was very kind to an inquisitive young man.  Essentially, he envisioned each TV station in America with a “war room” where the sales manager would sit with a few assistants. They would look at bids from buyers for selected inventory and, if they accepted a bid, that inventory was removed from the screens of buyers across the country. He admitted that local car dealers might not participate at first so they would still do annual deals with them and a few other big but unsophisticated players in the market. I asked, “When will this happen?” He laughed and uttered a line that I have used ever since. “Consumers always lag technology, son, so it may be 20 years.”

Here we are nearly 36 years later and I am no longer an earnest young media analyst. And, despite technological gains, we have yet to see automated TV buying to any large degree. Lately, however, the idea, while not gaining traction in the real world, is starting to be discussed more often as exchanges are indeed being established for on line buying.

I put the idea out to my Media Realism panel and to a number of people whom I value and trust. The results were interesting. Some simply did not respond, a few answered with brief locker room expressions, and some said that it was ridiculous. Others gave me measured responses.

Interestingly, the willingness to accept the idea fell sharply along demographic lines:

Those who had recently retired (a small sample of four) said that it was inevitable.
A larger group within three-five years from retirement said it could happen but all felt after they were gone.
Those under 50 were quite dismissive although five said that they feared it.

A few widely disparate verbatim comments were:

A network cable rep in NYC wrote, “My boss is exploring it and it scares me to death. I have two kids in college and need five more years at this sweatshop. It will not happen overnight but management is always looking to cut costs and if they can get rid of some of the sales team they can save a bundle on salaries and benefits.”

Another much younger sales rep at a cable powerhouse was not dismissive but said it did not make sense yet. His comments included “we don’t want to be commoditized so we hold back a lot of good stuff (inventory) for a premium price. If you want customized buys or special programs or promotions you have to deal with a sales rep. Our Direct Response group handles all remnant inventory and always sells out. An automated exchange might only work for a struggling new network.”

A buying service pro says, “Locally, I think an exchange would mean that a lot of inventory would go unused. It would be ever stronger if they tried it in radio. Without a team of sales reps, you might not have any radio sales to speak of.” Several others echoed this sentiment saying that, in smaller markets, automated buying will not be viable for some time.

A local cable maven hinted that affiliates could consider it for day or overnight but sales teams are still needed for the next several years. Other local cable pros said that as their product offerings are expanding, an automated exchange could not cope with it.

An owner of a mid-sized ad agency actually said he hoped it might happen. “Health care insurance is killing me. If I could unload most of my media team and then reward the soul of the agency, my creative team, it would be a good thing.” No one else was so candid but a few media directors felt that was what their boss was thinking when they asked about the topic.

While middle management at stations, cable systems, agencies and buying services was dismissive, virtually all felt that top management had to be considering it and were monitoring developments carefully.

The bottom line appears to be that, at some point, technology will evolve to where it will strongly effect the need for so many TV media salespeople and agency media staffers. While no one can rest easy in today’s environment, that appears to be some years away.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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