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The Future Of Media Buying

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Part of the conversation regarding the future of advertising agencies has included the development of new revenue streams – IP, charging based on performance, etc. It seems like where the ad agency is crawling, the media buying sector is a full tilt sprint. If you missed it, last week we talked about Irwin Gottlieb‘s legal, but questionable scheme for media buying. Now, interactive shops are looking to get in on some a new dish – “advertising exchanges, that are mean to trade impressions on Web sites the way Nasdaq trades stock.”

Rob Norman, the chief executive of GroupM Interaction Worldwide, gave a speech at the IAB Conference where he laid out his vision of media buying business. He specifically spoke on agencies, as content providers, which has also been tossed around industry circles. WPP is co-producing TV show October Road. BBH also got tied up in the MTV’s Game Killers show.

Norman is also in line with Irwin, as they push for new language to speak about the media business. They aren’t buyers. They are traders. As such, Norman suggested that soon his traders may begin purchasing inventory for resale to clients at a profit. As well, maybe they’ll help fund the next Nike campaign and thus, share in the profits.

“Today we trade on behalf of our clients, but tomorrow, and in some places today, we also trade on our own behalf.”

“We are perfectly entitled to share in the value we create, if we take the risk in acquiring inventory, or take the risk on.”

We see no problem with the idea of funding a campaign and then reaping some reward for the original investment. As for the latter bit, should a media buying firm be allowed to buy up space and resell it at a higher price? As Saul points out, this propreitary trading, which has notoriously been slammed for its conflict of interest. “Front running” is the practice traders buying up what their customers are buying in order to profit from the price increase. Trader, one. Customer, zero. Then there is the threat the traders will call up customers, ask them to buy under performing securities to unload the dead weight. Trader, two. Customer, zero.

So, what is the future to look like for media buying? Well, we probably won’t be calling it media buying for to many more years. Yet, will it come down to customer choice? As a brand, do you go with the standard media buying firm or do you go with the powerhouse, which in this case is GroupM – a gorilla who can arguably get better prices, locations and broker big deals for their clients?

Hmmm….

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