The Software Solution? - Broadcasting & Cable

The Software Solution?

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Josh Wexler
Co-founder and CEO
SoftWave Media Exchange

Meet Mr. Efficiency. A software industry veteran, Wexler is determined to make the process of buying local ad time on cable systems faster and cheaper by employing new capabilities of the digital age. SoftWave aims to collapse almost all of the elements of a media buy – from campaign planning to spot delivery to electronic invoice payment – over a single Internet-based platform. More than 1,000 radio stations accept orders using the SoftWave platform. Now, the company’s turning its attention to the spot cable marketplace.

Q. Advertisers have been buying radio and local cable for decades in a system that seems to work fairly well. What problem is it that you’re solving?

A. I think if you look at the marketplace and simply all of the processes that are involved in planning, pricing, negotiating, executing and actually getting the ads on to the air…there are just a lot of inefficiencies that can be more automated for the benefit of the agencies, the advertisers and the media owners.

Q. You started with radio, obviously, but why is local or spot cable also an apt fit for this platform?

A. In the context of how it compares to radio, it’s an incredibly fragmented marketplace that is very hard to buy on a regional or national level. And it’s also hard, I might add, on the MSO side for them to execute on behalf of the regional or national buyer.

Q. Let’s say I have a regional mortgage brokerage business. How would I get my commercials on the air over selected local cable systems?

A. We have a tool called Campaign Manager which, for an agency or advertiser, enables them to enter their specific campaign criteria, including the demographics they’re targeting, the regions they’re targeting, as well as the rates they’re looking to pay.

So you’d enter that information, and then you’d actually upload your spot, and effectively your campaign then gets transmitted in real time into the marketplace and the buy is executed.

Q. How do you know what rates to assign the inventory?

A. We actually put rates in the control of the broadcaster. They set the parameters for rates, and when an advertiser decides to effectively place their offer, if it’s below that level, they’re immediately notified and the transaction doesn’t get executed. It’s at the discretion of both the marketer and the broadcaster to ultimately get into a rate that’s based on their control. It’s based on what the market will support. Effectively it’s an open market. It’s how we’re really very different from the auction model.

Q. Do you pose a threat to traditional rep firms?

A. Actually on the radio side we are working with reps. So they can use the platform as well. What we’ve really tried to do is build an exchange that lets the industry participants do their business better, more efficiently for the benefit of all.

Q. What’s the ‘elevator pitch’ to an
MSO
?

A. The starting point of our conversation is that we can help you, from an inventory management standpoint, maximize the value of your unsold inventory. And we do it in such as way where there’s no incremental cost involved to the MSO in order to do business. There’s no hardware to buy, there’s no software to download, and they remain in control of their inventory and their pricing.

Q. What’s the economic model for your business?

A, We make a nominal transaction fee based on the volume that goes through the platform.

Q. Why is this sort of approach valid today, as opposed to several years ago?

A. Seven or eight years ago the marketplace was expanding. There was 5-10% growth both in radio and in local spot cable. And in television in general. And in radio you’ve seen all of these trends, whether it’s satellite radio, or file sharing, or iPods…have an impact on the marketplace. And I think that to use that same analysis and look at what’s going on in television today, there’s just a lot of uncertainty with online video and all these different formats consumers are looking at. A solution like what we have today is very timely for the industry.

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