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Auctioning TV ad buys

Jeff Tyler May 10, 2006

KAI RYSSDAL: Internet auctions have worked out pretty well for eBay. So now some other Fortune 500 companies are trying to get in on the act. They’re trying to convince advertisers to test a TV ad auction. Marketplace’s Jeff Tyler explains.

Julie Roehm first proposed the idea back when she was with Chrysler. Now at Wal-Mart, she’s found kindred spirits at companies like Hewlett-Packard, Lexus and Microsoft.

Bill Duggan with the Association of National Advertisers explains what these companies want.

BILL DUGGAN: An alternative way of buying and selling media based more upon a stock market approach.

That would offer a level of transparency that Duggan says doesn’t exist in the current system.

DUGGAN: The networks know what all their respective customers are paying for media. Meanwhile, their respective customers don’t really know what everybody else is paying.

Internet auction company e-Bay helped design an electronic framework where advertisers would bid on TV time. Television networks haven’t embraced these proposed changes, which could potentially erode their profits.

So, for the pilot program, the group hopes to buy a chunk of ad time from a small cable network.

I’m Jeff Tyler for Marketplace.

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