Online media-buying exchanges could be the venue for $66 billion in advertising activity by 2005, according to projections from a new Myers Group report.
But that's only if this relatively new sector can overcome the doubts of some advertising professionals, who consider much of the inventory on these Web sites as "remnants" or of "fire-sale caliber," Myers noted.
As with many new-media ventures, many of the executives polled by Myers took a wait-and-see attitude toward online exchanges. Last year, 28 percent of ad executives surveyed expressed interest in using Web-based transaction-management sites for media buying and planning, a 3 percent jump from 1998. But their interest was mainly in obtaining research and rate information, not in conducting negotiations online.
Meanwhile, BuyMedia.com, one of a dozen Internet-based media marketplaces, last week announced its acquisition of two major cable and broadcast ad-sales software systems, TvScan and CableScan, from TAPSCAN Inc. of Birmingham, Ala. Terms were not disclosed.
Burlingame, Calif-based BuyMedia will benefit from the TvScan and CableScan software already in use by more than 1,000 media companies that own television stations or cable systems.
TAPSCAN's operator and station customers account for about 90 percent of spot and local ad revenues, said BuyMedia CEO Mike Jackson. Last spring, BuyMedia bought Marketron, a radio-station software solutions provider.
Also last week, Internet Capital Group-which bought a $45 million stake in BuyMedia last January-will invest another $20 million in the company, Jackson reported.
Under BuyMedia's system, radio, TV and cable buyers and sellers can exchange avail requests, sales -proposals and invoices electronically. Sales and traffic information from buyers is automatically logged into stations' or operators' software, making the paperless process faster and less labor-intensive, Jackson said.
BuyMedia is linked to more than 2,000 ad agencies, mostly small shops like Rose-Glenn Group in Reno, Nevada, or Price Communications Group in Lubbock, Texas.
Unlike other online marketplaces, BuyMedia does not sell the commercial inventory, so it does not charge buyers.
"We don't take a commission. We have a different business model" than others, Jackson said. Stations and operators pay the company a monthly software-licensing and processing fee.
Adflight.com, Adfusion.com and Broadcastspots.com are among the commission-based exchanges.
Bolstered by acquisitions, BuyMedia should process about $500 million in radio, TV and cable avails combined by year's end, Jackson estimated.
According to the Myers report, the most active online exchanges are AdExchange.com, with $600 million in Web-only avails, and Mediapassage.com, with $700 million print-only avails.
Other online media-marketplace operations, like AdOutlet.com and OneMediaPlace (formerly AdAuction.com), offer print inventory, Internet inventory, out-of-home and event sponsorships in addition to TV and cable avails.
AdOutlet said 7,500 buyers have registered to use its site. Its 350 media suppliers range from Time Warner CityCable in New York to ESPN2.
"The next phase likely will be a consolidation of industry players, which already appears to be happening," Myers predicted last week.
MediaPassage.com, an online exchange for print media, announced plans to merge with spot-broadcast vendor Broadcastspots.com.
