Big move for BuyMedia
Online ad-buy facilitator's purchase of Tapscan gives it access to 800 TV stations
By Richard Tedesco -- Broadcasting & Cable, 9/17/2000 8:00:00 PM
BuyMedia.com hopes to hit the big time in the TV and radio time-buying business with a buy of its own.
Acquisition of Birmingham, Ala.-based Tapscan will enable the privately held BuyMedia to tap into the 800 TV stations and 180 cable systems using the respective broadcast and cable versions of the supplier's sales-presentation software for ad availability.
Ad buyers will be able to access information about individual markets, station ratings and ad availability, according to BuyMedia founder and CEO Mike Jackson. "They're going to be able to analyze what's best for their client," he says, noting that electronic buying "eliminates all of the rekeying of data that buyers and sellers do."
BuyMedia is backing its play with money from Internet Capital Group, which has given the Burlingame, Calif., Web firm $20 million in financing, following a $45 million infusion in January. In April, BuyMedia used some of that capital to acquire Marketron, whose software is used for electronic ad buys in the radio business. Jackson won't say what the Marketron or Tapscan purchases cost, but says BuyMedia's business could soar from $500 million in electronic-media billing facilitated this year to as much as $15 billion next year.
The company makes its money from the licensing fees stations pay for its software, based on their size, along with a transaction fee for ad buys it enables. And Jackson draws a distinction between BuyMedia and other online sites, such as AdOutlet and AdAuction, which enable stations to post inventory for bidding.
Catamount Broadcast Group President and CEO Raymond Johns says using BuyMedia at its CBS affiliates in Fargo, N.D., Twin Falls, Idaho, and Chico-Redding, Calif., helps supplement sales: "It's small potatoes compared to the other revenues we bring in. But we've gotten orders we might not otherwise have gotten."
Industry observers say sales through online TV and radio ad outlets are all small potatoes at present. "There's a big disconnect between the hopes of online media brokers and the realities of the media-buying marketplace," says Yankee Group analyst Steve Von der Haar, describing the inventory being sold as "remnant space."
BuyMedia and other online outlets are up against entrenched Madison Avenue media-buying practices that depend on personal interactions, according to Von der Haar, who says replacing personal relationships with software is a "scary concept" to ad buyers. "Madison Avenue has been very reluctant to move any significant sort of inventory to this selling format."
But Jackson argues that BuyMedia is simply trying to facilitate media buys by expediting the buying process with its technology. He sees the integration of Tapscan and Marketron under one umbrella as a significant step toward providing front- and back-end systems to push electronic buying. BuyMedia has approached New York-based Donovan Data Systems about integrating its presentation software, according to Jackson, who says the Television Bureau of Advertising ought to work with his company on its electronic-data-invoice initiative.
"What TVB is going to need is to make sure EDI is compatible with [Tapscan's] TV Scan," says Jackson. "EDI will be a reality when we release our product."
TVB President Chris Rohrs says the Tapscan acquisition gives BuyMedia entrée to a number of TV stations. But he already expects "dramatic" enhancements that will transform EDI into a full-bore buying tool next year.
Although he foresees an evolution toward an electronic marketplace, Rohrs points out that it's a small piece of the pie for the near term: "The [electronic] inventory that's evolved from radio and TV is far more limited, and of a distressed nature."
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