In a move that seems similar to the Google Adwords advertising model, Dentsu India plans to create a website for auctioning TV spots. DNA reports that this has apparently rattled media buyers. Dentsu had recently acquired rights to a bulk of the advertisement slots for the ICC Cricket World Cup and the ICC Champions Trophy, in a Rs.500 crore deal with Sony. Margins for media buyers could reduce if advertisers are able to bypass them. Also, since TV spots will be viewable online, it could help Sony fill unsold spots. The report also says that such an online auction was attempted before by a trade site, and it had failed. The difference here is that the seller (Sony) is willing. Advertisers and media buyers, however, aren’t too happy. Details here.
A media buyer not wanting to be named tells me that “the concept of online auctions for TV spots is brilliant, but it will hit the industry hard if it becomes the norm. Clients come to media buyers mainly for negotiating rates with sellers and planning strategies. Now media buyers will be forced to compete directly with advertisers, and transparently.”
There is also little scope for the media buying companies to collectively boycott such a venture since that will only push more and more advertisers onto the auction site themselves. The only major problem I see, is that auctioning could drive rates through the roof. Another thing is that, in the case of the ICC events, the demand for spots outstrips supply. For events that are not as exclusive, channels will solicit media buyers, and probably take the deals offline.