Dentsu Media’s ad auction model raises eyebrows

The media fraternity has reservations about the media agency’s soon to be launched ad auction portal

In a media market driven by relationships and ‘deals’, Dentsu Media is attempting to change the way ad inventory is bought and sold. The media agency, the Indian arm of the Japan-based Dentsu group, is planning to launch a website in September, which will be a platform for the auction of unsold ad inventory across media. This includes TV spots, print space, outdoor sites and even an online ad inventory. “The site will start off with a TV ad inventory, followed by a print inventory, and gradually move to other media,” says Sharat Jain, CEO of Dentsu Media. Jain was appointed CEO of Dentsu Media in March. He was earlier managing director, Asia, South at data and voice company Teleglobe. The chairman of Dentsu Communications is Sandeep Goyal.

The website, www.lastminuteinventory.com, is based on a system of tender-based auctioning of ad inventory which remains unsold up to the last minute and ‘scarce’ last minute inventory such as that of a premier sporting event or a breaking news story. The inventory will be traded online in real time, as and when it becomes available.

Dentsu Media’s ad auction model raises eyebrows

The website will be owned and operated by an independent company, Last Minute Media Pvt. Ltd. This move has presumably been made to maintain neutrality in operations. “(The company) will operate as an independent corporate entity at arm’s length relationship with its equity owners,” says Jain.

Membership to Lastminuteinventory.com will be through paid subscription. The membership is open to media owners, advertisers and media agencies. Media owners can directly place their inventory on the site.

“Advertisers and agencies can browse and evaluate the available inventory and then bid for it or buy it outright,” says Jain.

Sandeep Goyal

This feature of the platform puts unprecedented power in the hands of media owners who can decide what rates to sell the inventory at. Media owners can also decide how advertisers or agencies buy their inventory. They can either choose to sell the inventory at a fixed price or by inviting bids.

The platform is being viewed with distrust and scepticism by media agencies. Most of the media agencies agencyfaqs! contacted declined to comment on the initiative. However, the head of a leading media agency conceded, “We have strong relationships with media owners and we will continue to work directly with them. We would rather not work through an inanimate platform. On the other hand, it could open up opportunities for small players.”

Sharat Jain

Manish Porwal, managing director, India, West and South, Starcom Worldwide, a media communications agency, said that an innovation in the media space is always welcome. But he added, “Such endeavours have not been encouraged by the industry in the past. Though the market is getting digitally aware, you cannot ignore the human touch. It will help media owners whose inventory is in demand to spread it. But buyers will come to expect the same rates, and this could prove detrimental in the long run.”

The biggest worry that media agencies have with the Lastminuteinventory model is that the rates will be decided in a relatively open forum. Typically, this exercise is a fiercely competitive and hush-hush activity, but on this new platform, agencies will no longer play with the same anonymity.

However, the innovation is a boon for media owners. Not only can they decide how to sell their inventory, it will also give smaller media owners a level playing field. Rajnish Rikhy, senior vice-president, ad sales, Aaj Tak, says, “It’s too premature to comment on (the platform), but in principle, it sounds good. When the rules of the game become clear, we would like to participate in it.” Even with media owners, the question of transparency does arise. Not many would be comfortable sharing their rates, even of the last minute inventory, for all to see.

There could be other applications of the model as well. Ashok Mehta, CEO, TV Ad Indx, suggests, “It will spark off many such innovative techniques of space and time selling. It can be applied to anything which has a limited shelf-life... from endorsements to Page 3 personalities at events!”

Though attempts at creating online auctions have failed in the past (Adnova by Madison Media being one of them), this may well be a good time for a platform like Lastminuteinventory. In the US, companies such as Google are actively engaging in selling TV, radio and print ad inventory through online exchanges.

It’s early days yet and only time will prove whether Dentsu Media’s experiment is indeed the game-changing movement it is being made out to be.

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