Scott Heath, the general sales manager of Tribune's KSWB San Diego, is eager to have advertisers run integrated campaigns with Web and mobile elements as well as traditional spots.
But as innovative as those opportunities may be, the agencies often don't have time to listen to his pitches. They're simply overrun with combing through paperwork to resolve billing discrepancies, where a station and agency disagree about what spots ran and how much is owed.
The Television Bureau of Advertising (TVB) thinks it has at least a partial solution. Its new $5 million ePort electronic trading platform—on pace to be fully operational by summer—aims to make the purchasing process faster and easier. Included is a function that allows executives on both sides to monitor a buy in real time, hoping to avoid the hassles that can suck up time and money.
“I call it Drano,” says Heath, an ePort proponent. “It unclogs the process.”
Loads of industries have successfully shifted to full electronic transactions. But some 80% of the spot business is still conducted using a fax machine or some other paper process. That creates human error as documents travel back and forth and are altered manually.
Stations consider the process such a hindrance to new business that ePort has financial support from some 60 station groups and all the major rep firms. They've committed to paying the user fees necessary to keep the system operating over the long term. (Even non-TVB member Sinclair Broadcast Group is on board.)
“The No. 1 goal of ePort is to streamline the back room and provide more time for person-to-person negotiation,” says Abby Auerbach, TVB executive VP.
TVB estimates that both sales executives and buyers spend up to 60% of their time doing paperwork associated with a buy—diverting them from their primary responsibilities. And the industry estimates some 85% of invoices are disputed.
“Right now, spot TV is the most expensive thing for ad agencies to steward,” says Frank Comerford, president-general manager of New York's WNBC. “We need to make it more efficient.”
A mountain of paper
Billions of dollars could be at stake for an industry that generated more than $17 billion in spot dollars in 2007. Estimates pin lost industry revenue at 4%-8% annually—that's money wasted on paperwork, extra support help, and wasting salespeople unable to spend more time bringing in new business.
“I don't think that's an unfair assessment with all the kind of hidden costs associated with our current systems,” say Paul Karpowicz, president of Meredith Broadcasting and TVB board chairman, and B&C's Broadcaster of the Year.
There's another issue: If spot buying continues to be cumbersome, agencies may shift their dollars to media they perceive to be more user-friendly, including the Internet.
Stations are counting on the new digital platforms to provide a boost to sales. At the TVB conference this week, analyst Gordon Borrell will reveal that online ad sales reached $772 million last year—still a small portion of station revenues, but growing at a healthy rate.
Multicast stations are another potential game-changer, if sales are handled efficiently.
“If they want to sell those stations in a 'manual environment,' we will be hard-pressed to buy them,” warns Kathy Crawford, who heads local broadcast at MindShare. “We need to move to spend the time negotiating and learning about the nuances of the upcoming marketplace.”
So far, ePort, which will facilitate multi-platform buying, allows agencies to electronically submit orders and related revisions, while stations can send back information on make-goods. But by mid-summer, ePort will offer end-to-end capabilities for the full life cycle of a buy, from avail requests through invoices.
TVB is also gaining traction among vendors of the differing, and often incompatible, management systems used by both buyers and sellers. Those vendors are increasingly incorporating the TVB-developed “common language” needed to link one another into their products. Strata Marketing was the first to make ePort functional for its agency clients. It's also being tested by others such as Mediaplex.
Earlier this month, Donovan Data Systems, which provides services to many major national agencies, said its sales systems have begun receiving orders via ePort. And its agency clients will be able to send orders and revisions by the end of the year. (DDS chief media strategist Harvey Kent says there are no plans to expand into other areas of a transaction, though it's “certainly not out of the question.”)
Courting the big guys
So far, ePort has facilitated about 200 orders sent, a relative drop in the bucket. But TVB says momentum is building. MediaVest's local buying head Maribeth Papuga is “monitoring progress.” And large station group Hearst-Argyle has begun taking orders via the system. Kathleen Keefe, VP of sales, says the company is committed to making it as “widely implemented as quickly as possible.”
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