Bid4Spots: The eBay of Media Buying?

One of the biggest problems facing radio and television sales managers is unsold inventory. As the week comes to a close, the pressure increases to move the inventory and maximize revenue. This situation encourages general managers to take whatever steps are necessary to book revenue. For example, I once placed a commercial inside an NFL broadcast in a Top 5 market—during the game itself (not pre-game)—at a 65-percent discount.

But what can you do if you don’t have a relationship with a sales manager who is willing to help you? You turn to the eBay of Media Buying: Bid4Spots.

What Is Bid4Spots?

When computer programmer Pierre Omidyar founded eBay in 1995, he showed how one of the oldest marketing concepts—the auction—could be profitable in the newest market, the Internet. Ten years later, Dave Newmark (LinkedIn) believed that the online action to help solve the unsold inventory issue for radio and television stations. And, in the process, save his customers a lot of money.

How Bid4Spots Works

From the advertiser-side of the equation, Bid4Spots is a reverse auction. There is one seller, the advertiser, and many buyers, the radio or television station. Each Thursday, radio stations bid during a four-hour live auction for spots that will clear the following Monday.

The advertiser sets a wide range of variables, including demos, dayparts, and station formats. The advertiser can set a price ceiling (per 1,000 listeners), choose markets by name, size, or state. Afterwards, the advertiser uploads his copy and traffic instructions. Then, he waits.

On Thursday morning, radio stations receive an invitation to compete in the auction. The station sets the number of spots and a confidential price per daypart. Bid4Spots then generates a Bid Rating Index number (where n=100) so the sales manager can determine how competitive his bid will be at that time. An index greater than 100 means that the station will not win all of the spots, perhaps none at all.

Advantages

For professional media buyers in small shops, Bid4Spots can be a great tool for regional or national buys. There are times when you have excess budget to clear, and an auction can help you achieve TRPs goals with minimum effort.

Disadvantages

On the other hand, Bid4Spots is not a tool you should use as a primary rate negotiation tool. Advertisers can achieve single-market success through negotiation of annual or semi-annual contracts. Sales managers can leverage annual contracts to include value-added premiums (contests, etc.), where Bid4Spots is simply a clearing house for unsold inventory.

What Do You Think?

Have you used Bid4Spots? What was your experience?

Here are other articles I have written on this topic:

• CBS Claims November Sweeps
• New Campaign for Will County Health Department
• 10 Day Tune Up for H1N1 – Day 6: Reporters’ Notebook
• U.S. Olympic Committee to Launch TV Network in 2010
• Newspaper Revenue Trend Line Reconsidered
• Will Online Ad Revenue Beat Newspapers in 2011?
• Mike Hughes Is Wrong
• Working With the Fairness Doctrine
• Is Radio Advertising Effective?
• New Television Spot for Appellate Court Judge Mary Schostok