General Motors, the nation's top-spending advertiser, is considering a radical change in the way it purchases the $340 million worth of commercial time it buys annually on local TV stations.
The auto giant is considering a plan to use the Internet to buy time on the stations, say executives familiar with the discussions.
The concept would be part of the business-to-business Web site GM has set up for vendors to buy and sell goods and services. GM recently announced the site eventually will become part of a combined site with partners Ford Motor Co. and DaimlerChrysler.
REMOVING THE MIDDLE MAN
Several ideas are under discussion at GM revolving around the station ad time issue. They range from using the Web to conduct paperless transactions with stations to having GM deal with stations directly, cutting out buyer Local Communications Inc. LCI is a division of The Interpublic Group of n-Erickson, N.Y.
'This could be a way to cut out the middle man, which is LCI, and save a bundle on costs,' said an executive at one GM ad agency. However, another executive said that was the least likely scenario.
'What LCI really brings to the table is all the added value it negotiates on behalf of GM. And I think those are the kinds of things you have to do between two people that have a business relationship.'
The first executive countered that value-added packages could be made part of an online-only transaction as well.
'This will most likely be fought out in a battle between those on the purchasing side at GM, who basically see purchasing TV time as yet another commodity, and those on the advertising and marketing side who think that task needs to be more sophisticated,' the executive said.
Meanwhile, one station general manager said he would not care what the sales procedure was as long there still is personal service from local reps.
'If you're just computering back and forth, it takes the personal sell out of it,' said Mike Dunlop, general manager of WKBD-TV in Detroit, though he said he would need to know more about the setup.
'The creativity comes from the salespeople. I think it's important.'
There are a number of sites that conduct auctions for TV ad time, and some GM managers think its Internet purchasing site could be a good vehicle for those transactions as well.