NEW YORK -- Julie Roehm, director of brand communication for the Chrysler group, wants a system for buying and selling TV ad time that is transparent and open rather than the private discussions and back room deals that are the current practice of the so-called upfront.
Speaking at the Association of National Advertisers' Television Advertising Forum in New York, Roehm said the current model is good for networks but bad for clients, comparing it to a 1939 stock-and-cattle exchange. Her proposed solution is based on the Nasdaq trading system.
TV as a commodity
Her plan actually harkens back to 2000, when Enron hoped to create a spot TV market prior to its collapse the following year. Though the plan garnered curious interest, the criticism then, as today, focuses on treating TV like a commodity, which discounts nontraditional revenues, promotions and other value add-ons.
"It's saying a spot is a spot is a spot," said Jim Speros, chief marketing officer of Ernst & Young and a former chairman of the association. "I think the cable companies and networks only have money to lose in that case. ... On the advertiser side, there could be a financial upside, but on the quality side of connecting objectives and programming to specific needs and working with networks as marketing partners rather than just vendors, I'm not sure it would make for a better system."
Buying and trading
Under her proposal, networks would place starting values on commercial pods, or spots -- the 15-, 30- or 60-second spaces available for advertisers to buy to place their commercials -- just as companies do with shares prior to an initial public offering, and then anonymous advertisers buy and sell the air time at prices determined by the marketplace. Networks decide who participates by providing access codes to those buyers who meet certain criteria, such as promising to deliver creative to the network that met its standards and deadlines.
The networks would also act as traders, buying back spots they feel are undervalued or want to use for promotional purposes and collecting a commission for trafficking creative and executive exchanges.
Roehm did point out that a Nasdaq-based system wouldn't allow networks to bundle -- the common practice of packaging highly sought-after spots with less attractive inventory in order to get ride of it. Rather, buyers would bid on only the space and spots they want.