The web has simplified many aspects of our day-to-day lives; we don’t think twice about logging on to manage finances or to buy books, music and flights online. But what about media? Should advertising inventory be bought and sold online? AdvertisingPlaza.com, an online ad exchange, offers exactly this service to media owners and advertisers.
Launched in Hong Kong on 22 January, AdvertisingPlaza.com offers advertisers inventory across media which have signed up to the site. To date, that includes The Economist and South China Morning Post. The site, which also offers additional services, including creative and targeting, takes a nine per cent commission on each transaction. It joins Alimama, a similar set-up from the Chinese e-commerce outfit Alibaba Group, which trades in online ad space. Other online ad exchanges include Right Media, a Yahoo-owned service in the US.
1 Like Alimama, AdvertisingPlaza.com targets small- to medium-sized businesses which wouldn’t typically use a media agency. Think florists and opticians rather than airlines and banks. Lucien Harrington, AdvertisingPlaza.com’s managing director, comments: “There are thousands of businesses in Hong Kong which currently give out leaflets. We could ensure they spend their budgets more effectively.” He describes the site as “an easy introduction to the world of advertising”.
2 Online ad exchanges are convenient for inexperienced advertisers. Peter Jeffrey, executive director of Asian Integrated Media says: “E-commerce is all about doing business more easily and on this site, people can immediately see what inventory is available.” This is particularly useful for smaller advertisers who are buying space in just one medium. Ravi Kiran, CEO of specialist solutions, Starcom South Asia, compares the process to buying a single flight on Expedia as opposed to hiring a travel agency to service a company’s travel needs.
3 It’s unlikely that AdvertisingPlaza.com and other online ad exchanges will pose a threat to media agencies. Agencies tend to deal with bigger clients and offer other services. Adrian Toy, regional director at Universal McCann, comments: “Media buying is just one part of what we do. We take a big communications idea and try to bring it to life in different media. You can’t automate that.” Jeffery adds: “There’s always great demand for people who understand how to buy media effectively, especially as media become more complex.” As well as using research tools to differentiate their offering, agencies are also geared up to offer sector-specific information to help their clients plan and buy the right media. “An online platform will not be able to provide that kind of data and knowledge,” notes Pixel Media’s CEO Kevin Huang.
4 Mark Simon, Apple Daily’s group advertising director, thinks that the service should offer novice advertisers more help. He’s a big fan of DHL’s total service offering and believes that online ad exchanges like AdvertisingPlaza.com could learn from that particular model. “Smaller businesses will get on board if you give them the tools to help them out. A lot of small businessmen get their 12-year-olds to make their ads. You have to offer people a service and, at the moment, AdvertisingPlaza. com is just trying to bring together buyers and sellers.”
5 In 20 years’ time, media buying will be even more automated, predicts AdvertisingPlaza.com’s Harrington - but not everyone shares his view. As media is a people-centric business, many question whether a more automated approach is appropriate. Alan Lammin, Time Asia’s publishing director, says: “Ours is a negotiated, face-to-face business, so if the business becomes too automated, rates, discounts and value-added offerings would be problematic.” Shangri-La’s vice-president of brand communications, Brendan Inns, adds that just because you can buy media online doesn’t mean you should: “Not everything has to be done on the internet or via email; we can still talk to people via good old-fashioned phone calls.”
6 Many online ad exchange sites launched to great fanfare during the dotcom gold rush in 2000 — only to fold shortly afterwards. Pixel Media’s Huang is more positive about the future of such sites now. “It’s a good idea and the timing is right.”
What it means for…
Advertisers
- Smaller advertisers - typically restaurants, beauty salons and spas - will benefit most from the launch of online ad exchanges, particularly if they want to advertise in just one medium.
- Advertisers with bigger budgets require the additional services of a media agency, particularly for mining consumer insights and developing creative media ideas.
Agencies
- Online ad exchanges shouldn’t cannibalise media agencies’ business. Media agencies pride themselves on the relationships they have with media owners and clients and leverage them in negotiations.
- Some envisage collaboration between ad exchanges and media agencies on smaller clients; others speculate that media agencies will eventually buy these virtual platforms.
Media owners
- Online ad exchanges offer another outlet for media owners to sell inventory, and are best suited to those selling straightforward media spots.
- South China Morning Post, The Economist, Hong Kong Tatler, Cosmopolitan, Automobile, Harpers Bazaar and Goal TV have already agreed to list inventory on AdvertisingPlaza.com.
