Automating The RFP And Buying Process (For Real).

There’s an area of the advertising business that’s not so patiently waiting to be automated, and I think it will finally, finally happen in 2013.  I am speaking of course, about the actual media RFP and buying process.

Before you get all bent out of shape and try to tell me, “Geez Cory, it already is — you are so out of it,” be sure you have all the facts.
Fact #1: Outside of a self-service seat on a DSP, the vast majority (if not 90%) of all media is still managed through the traditional insertion order signature process.   This applies to online and offline alike. Just about every media planner will tell you the same thing: This archaic process is awful.

Fact #2: At least 80% of all online media RFPs are still handled through an outdated, almost laughable, excel-based template approach.  Even the agencies that issue a web-based form for filling out RFPs end up pushing the info out to excel and managing the RFP process through pivot tables, sorting and hiding rows and columns until they know what they’re going to buy.

Fact #3: Without a doubt, the advertising business is a relationship-driven business, meaning the majority of media buys are done off a combination of past performance combined with personal relationships.  With so many choices out there in the marketplace, many of the final decisions are based on the relationships between buyer and seller.  At least the first “test buy” is driven in that manner.  Once you’re on the buy, performance dictates whether you stay. 

When I was doing more consulting-type projects over the years, I did surveys — and most buyers have four to five “usual suspects” they put on a buy, even though they tend to RFP as many as 10 in a specific category.  Most of the RFP process is client-driven, meaning they want to see the competition, but the agency has a good feel for what they’re going to recommend.  As much analysis as they do, much of the value assigned is qualitative and subjective. It’s not a bad thing that this business is so relationship driven.  We just need to be honest about it.

But what if the business were driven by true analytics rather than “analytics,” and there were tools that made the process of issuing RFPs, selecting vendors and executing campaigns — even those with multiple rounds of optimization — more efficiently?  I think this is the year for all that to happen.  I have personally heard of four companies in the last two months who are trying to build this toolset, and the market seems poised for one, two or even three of these platforms to take hold and gain usage quickly.

For a business that is as fully automated as ours, it’s crazy that there’s still a manual process for determining campaign placement.  The IO process itself is onerous, and it leads to millions of dollars worth of errors in the agency media management process every year.  Ask any CFO or comptroller in the agency world why it takes so long for them to pay their bills (many are regularly as far behind as 120 days on payments) and they will tell you it’s because of the process of reconciling their media buys.  If the process were truly automated on both sides, this would be a much easier problem to solve. 

From what I’ve seen recently, 2013 and 2014 will be the years when the business of buying media finally gets efficient.  Don’t you agree it’s about time?

By Cory Treffiletti
Cory, senior vice president of marketing, BlueKai, is a founder, author, marketer, and evangelist.
Courtesy of MediaPost