The 4As e-Buying Effort Doomed.

I wish it weren’t true. The 4As takeover of the electronic media buying efforts of the now-defunct MediaPort will fail as predictably as the well-intentioned efforts of MediaPort’s big agency parent companies.

It’s not that their ideas and technologies don’t make a great deal of sense – they do. Automating the media transaction process is a long-overdue reform. But the factors dooming the efforts to failure include three systemic problems:

Big media sellers will lose huge amounts of market share if they accede to making the transaction process easier. Sadly, when transactions are difficult, time-consuming and fraught with the need for much human interference, buyers tend to make fewer buys, which proportionately rewards the very largest media companies. This is the reason AOL and Yahoo! continue to maintain the share they do, despite failing to return the phone calls of many buyers. It’s certainly not their purported value.

The existing automation companies, like Donovan, cannot afford to let these efforts succeed, lest their existing revenue streams become completely irrelevant. I know Mr. Donovan, and he’s a great guy for hanging out, but he’s no Robin Hood swinging down to deliver the industry efficiencies from his left pocket having just stolen it from his right pocket. Hardly.

The big agencies that spent $45 million to fail with MediaPort didn’t do the one thing that was necessary to make the effort succeed. It wasn’t a matter of money spent; it was a matter of what these buyers forced upon the sellers. Had they created a policy of no-cooperation-no-money, the sellers and infrastructure companies would have given in. Instead, the effort was funded by traditional media managers who didn’t want to take this type of all-for-nothing risk that could affect precious traditional media relationships. They’d rather spend $45 million and cross their fingers.

The handover to the 4As will likely have less of a chance of success, if only for the fact that it has no binding authority on media budgets. The trade group doesn’t hold the levers of rewarding cooperating media companies with dollars. MediaPort may have used only a wet noodle as a stick, but the 4As lacks even the noodle.

And lest the torch-wielding mob of sales rep defenders raid my email box yet again, please realize that forcing electronic standardization would not be an anti-sell-side event. It would shift the market share around to better reward the media vehicles providing the greatest value, and thereby reward some of today’s underdogs. In the end of the day, more money would be spent on more media vehicles, growing the market for both sides at the expense of the least efficient and least cooperative.

The captains of our industry lack the foresight to see the long-term importance of these reforms, but more importantly, they lack the courage required to deliver them. If the objective of the 4As efforts becomes a standards publishing effort, it is doomed.

The only way they can deliver reform would be to bind buyers beforehand to reward and punish media sellers in regard to their cooperation to the new systems and standards. Concerns about antitrust can be put to rest with the proper process and language. For instance, advertisers could sign agreements mandating that a certain percentage of their media buys must be transacted through the new electronic system. This requires a system of sanctions, and, frankly, some backbone.

I wish them luck in this endeavor. We all should give the 4As every support available to us in the event that a spine appears, throwing this spiraling process back on track.

By Tig Tillinghast
Courtesy of http://www.MediaPost.com