I’ve written before about the Online Television Exchange System. Well the pilot system officially went “live” this week after a tremendous amount of work and effort by a number of advertising and agency executives.

Recently the Cabletelvision Advertising Bureau (CAB) came out against the system as they said many TV deals include interactive. I certainly respect the CAB’s opinions on this subject, however I don’t agree with them in entirety.

Again, let me lay out a couple of points regarding why we need to move to a more optimized and efficient method of purchasing television inventory.

1. Lead Times – having an advertiser lay down the majority of their yearly TV spend in May each year doesn’t balance with a continuing challenging daily business market. Most market planning for companies goes on during the late summer/early fall… so you’re laying down inventory before you know who the target audience might be. And although changing the upfront is a whole other discussion… having an inventory exchange system is one component of shortening lead times.

2. Optimization – if a company is basically buying only eyeballs, and isn’t trying to integrate other media types into the TV, why aren’t we trying to make that media the most efficient in terms of how it’s sold. Whey do our media agencies and internal staff need to spend so much time on something that should be easier.

3. Cost Avoidance – marketing costs continue to increase, from agency staffing to media time. Marketers need to avoid unnecessary costs so they can plow those dollars into demand generation/branding activities vs. administrative costs. If a system can manage the buy vs. a full time headcount, why wouldn’t we want to save money. Along these same lines, digital media takes much more time and effort than many traditional types of media…. However, staff levels aren’t increasing fast enough to keep pace. Therefore, if we can reduce the amount of human capital time needed for some activities we can start to make a dent in this challenging area of management.

Finally, let me point out that not only has HP be involved in this effort, but other blue chip companies such as Home Depot, Lexus, and Microsoft. Media agencies, Magna Global, Zenith Optimedia, etc. have also spent time and leadership on this effort. And, it’s been widely reported that Google has been looking at ways to optimize the marketplace as well with their recent TV buying agreement with satellite provider EcoStar.

I recommend that we look at the results of the pilot, determine how it performed and what improvements can be made, prior to throwing rocks from within the glass house.

By the way I found this quote from James Crook which sums it up well.

“A man who wants to lead the orchestra must turn his back on the crowd.”

Scott

e-media exchange HP Home Depot Hewlett Packard CAB Toyota Lexus ZenithOptimedia Magna Global media television upfront TV scott berg cabletelevision advertising bureau Microsoft