eBay began taking bids for radio spots yesterday as the online auction leader expands into offline ads. The company partnered with already established Bid4Spots, which has hosted weekly online unsold inventory reverse auctions since 2005. Advertisers designate what they're willing to pay for a 15-second or 30-second spot, then stations with available airtime make offers to win the biz. As part of the eBay Media Marketplace (which also brokers cable spot ads), advertisers/agencies create auctions and registered stations registered can make offers.
The deal brings an auction marketplace of 2,300 stations in 300 markets. eBay gets a commission for every dollar spent on ad buys. The eBay Media Marketplace launched in March with backing from advertisers like Wal-Mart, Hewlett-Packard, Intel and Home Depot. However, Oxygen is reportedly the only net that currently sells time on the service.
While many headlines are saying launch of the service puts eBay head to head with Google Audio for the radio ad market, we don't really see it that way. They are two entirely separate animals, not in the same category. Google Audio is basically an unwired network that they've put together. And as they add stations, there's no bidding process on it. It's a negotiation like anything else. Google will supply that network with largely their own set of clients they've already gotten from the internet. Ebay/Bid4Spots is an auction site-you go on it every Thursday and buy spots for the following week.
Said Rich Russo, JL Media's SVP/Director of Broadcast Services: "We knew the marketplace was going to get to this. I can do business with Google for Q4 into Jan. '08 right now. I can do business with Bid4Spots for next week. I don't know if eBay changes that. The Bid4Spots guys came in and presented to me, I thought they did a good job, but unless I have last minute clients, it does me no good. With Bid4Spots, you really can't pick stations. An individual advertiser can pick a market, 20 markets, 50 markets. Am I now able to bid on a specific station? If eBay changes that to where I can go 4-6 weeks out, different story. Otherwise, it depends on the client. Some might work fine that way."
Will this do anything to the radio spot marketplace?
"It won't do anything until either it works so well that it drives up demand for radio or it works too well and the cost basis is coming in lower than it should be and it drives the comps down," Russo adds. "It also comes down to payment and credit issues. Most agencies have credit. You've got 90 days on a lot of stuff. I'm assuming they're going to want payment upfront for this-especially for unestablished advertisers. There are a lot of kinks that have to be worked out. It's going to be a case by case, client by client basis. My standpoint is hey, if there is a savvy way to do better for your clients, you've got to look into it. Maybe for three markets I'll buy it the regular way and then three markets I'll buy this way, because it's just better."