Orlando panel emphasizes the need for agencies to adopt back-office automation so there’s only one data entry point.
Advertising agencies must get tough—even to the point of denying business to offending media outlets—if they want to achieve the level of back-office automation that just about every other large U.S. industry has already put in place.
This was the verdict from agency and software experts who spoke yesterday on a panel in Orlando, Fla., where the American Association of Advertising Agencies opened its annual Media Conference.
Advertising is the last major U.S. business to automate, said Greg Smith, chief information officer at McCann Worldgroup, and the panel’s moderator. Automation is “critical to our future,” he said. “If we don’t do this, things like Google’s effort to automate media buying on the Internet will happen.”
Many agencies now insist on getting avails electronically, said Strata Media’s John Shelton. “There are a huge number of smaller agencies that will only do electronic business.”
Kathy Crawford, president of local broadcast at Mindshare, offered a glimpse of why automation is so important. “We still have an 85% [discrepancy] rate in spot TV,” she said, “and now, we’re buying Web sites and other new media locally. I’m in terror. We’re going to have a 100% [discrepancy] rate, and then some.”
David Prager, chief information officer at Katz Media Group, said that from the time of a proposal through the invoicing process, “the same data gets entered six different times” under the current system of media buying and selling. “The goal is to get it to one data entry.”
“Agencies have to push, whether it’s their software vendors or their media providers,” Prager added. “Collectively, they’ll react if you demand it. Every agency has some power to act in this area.”
Agencies’ ability to focus on automating their back offices may be strained, however, in today’s fast-moving media marketplace. One executive in the audience told panelists that while he strives to move ahead on automation, he’s forced to put it aside whenever an opportunity for new business comes along. “New business,” he said, “takes priority.”
Ad agencies are generally satisfied with the way DARE, the spot TV business’s automated selling system, works, said Donovan Data Systems’ Michael Donovan. “There are four million transactions a year in DARE, and the number goes up 10% a month,” he said. “Dare works and is two-way.”
Still, DARE works in ANSI, a computer language that predates XML, the language ad agencies have chosen for their automation effort, so DARE needs to be replaced at some point with a new system. The new system would eliminate the need for agencies to pay Value Added Networks to translate communications from reps and stations, Donovan said, and it would cut the cost of buying spot TV by 25% over time.
The challenge in creating a new spot TV system lies in the many changes taking place in the media world. “We don’t know where this business is going,” Donovan said. “We keep asking ourselves ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€¹Ã…â€œwhat will that spot buy look like?’ ”