The news that India’s Last Minute Media, owner of lastminuteinventory.com, racked up sales of US$2 million in September brings the issue of online media exchanges, and whether there is a market for them, into the spotlight.
1 Lastminuteinventory (LMI) allows unused inventory to be sold online in real time. The site launched in the early part of this year and claims to be the first operation of its sort in the world (media agency sources, both in India and elsewhere in Asia, confirm they haven’t come across anything like it beforehand).
The site is set up to connect media owners that have unsold inventory with advertisers, allowing media space to be sold online in real time.
2 Online ad exchanges are not a new idea, but usually exist to buy and sell online advertising. What is interesting about LMI is the number of traditional media owners selling inventory through the site. The Times of India, Hindustan Times, India Today, most of Zee’s channels, Discovery Channel and Radio Mirchi are all members. In total, the exchange has already tied up with 80 media owners. There are currently 440 television channels and about 330 publishers in India.
3 In theory, the set-up looks like a win-win situation for agencies, clients and media owners. Media owners can get rid of their unsold inventory, clients can secure discounted media buys, while agencies can get cost-effective last-minute buys. All three do not need to go to the trouble of renegotiating.
What exactly defines ‘last-minute’ is up to the media owners that operate on the site - they can decide how late to leave it before discounting rates.
Malcolm Mistry, publishing director of India Today, argues that, as a media owner, LMI opens more avenues for him to sell. “Not all deals will go through, but I still have the option. I have a right to say no.”
The site makes money via membership fees and transaction fees, though LMI declined to disclose how much these fees were.
4 Some clients have welcomed the model as it means more visibility with lower investment. One marketer at Indian telco Idea Cellular foresees about 20 per cent of budgets moving to such exchanges. “I think more companies that are currently allocating 100 per cent of their spend to strategic media planning and buying might want to move this budget into tactical buys.”
Idea became a member of LMI a few weeks ago. According to the marketer, who did not want to be named, it might be a good idea for media agencies to find creative ways of working on LMI to improve their clients’ ROI.
5 While the launch of sites such as LMI raises the prospect of clients buying direct from media owners, media agencies argue this is not a big concern. Clients, they say, not only need to buy inventory but also require proper planning and consultation. Sandeep Goyal, chairman of LMI, says the company encourages all clients to involve their media agencies in buying. “LMI has nothing to gain from having clients buy directly on its site,” he says. “Having said that, LMI has no issue if a client wants to transact directly with the media owner.”
Manoj Malkani, vice-president of MPG India, thinks that media agencies stand to benefit. “It will help media agencies through its ease of operation and also provide opportunities to experiment with niche media.”
6 Some industry experts say the offering will work better in a place where the media is more fragmented. Amin Lakhani, head of trading at Mindshare India, points out that media in India is bought by a relatively small number of companies. “In India WPP owns about 58 per cent of media, out of which 40 per cent is owned by GroupM. Within GroupM our first port of call would be GroupM Trading.”
He also questions whether media owners will really be selling their inventory cheap on LMI.
“For top-level media there are rarely occasions where supply has overshot demand for the inventory. But if the media owners are still selling their inventory on LMI then it means they are trying to maximise their yields. In that case it cannot be cheap.”
What it means for…
Media Owners
- Media owners can get rid of their unsold inventory.
- LMI opens up a new sales channel, which reaches advertisers and buyers without any substantial investment on the part of the media owners.
- However, there is an argument that media owners must also be careful not to rely too much on this sort of sales mechanism, as doing so could affect long-term perceptions of their brands among media agencies and clients.
Media agencies
- The bigger media agencies, especially in India, will already have their own internal systems in place for buying media. LMI, however, could open up new opportunities, particularly in niche media.
- Some flexibility will be required to bring LMI into the planning process.
- Agencies need to watch the price of last-minute inventory and compare them with the prices they have already secured when buying media in bulk.
Got a view?
Email [email protected]
This article was originally published in 5 November 2009 issue of Media.
1 Lastminuteinventory (LMI) allows unused inventory to be sold online in real time. The site launched in the early part of this year and claims to be the first operation of its sort in the world (media agency sources, both in India and elsewhere in Asia, confirm they haven’t come across anything like it beforehand).
The site is set up to connect media owners that have unsold inventory with advertisers, allowing media space to be sold online in real time.
2 Online ad exchanges are not a new idea, but usually exist to buy and sell online advertising. What is interesting about LMI is the number of traditional media owners selling inventory through the site. The Times of India, Hindustan Times, India Today, most of Zee’s channels, Discovery Channel and Radio Mirchi are all members. In total, the exchange has already tied up with 80 media owners. There are currently 440 television channels and about 330 publishers in India.
3 In theory, the set-up looks like a win-win situation for agencies, clients and media owners. Media owners can get rid of their unsold inventory, clients can secure discounted media buys, while agencies can get cost-effective last-minute buys. All three do not need to go to the trouble of renegotiating.
What exactly defines ‘last-minute’ is up to the media owners that operate on the site - they can decide how late to leave it before discounting rates.
Malcolm Mistry, publishing director of India Today, argues that, as a media owner, LMI opens more avenues for him to sell. “Not all deals will go through, but I still have the option. I have a right to say no.”
The site makes money via membership fees and transaction fees, though LMI declined to disclose how much these fees were.
4 Some clients have welcomed the model as it means more visibility with lower investment. One marketer at Indian telco Idea Cellular foresees about 20 per cent of budgets moving to such exchanges. “I think more companies that are currently allocating 100 per cent of their spend to strategic media planning and buying might want to move this budget into tactical buys.”
Idea became a member of LMI a few weeks ago. According to the marketer, who did not want to be named, it might be a good idea for media agencies to find creative ways of working on LMI to improve their clients’ ROI.
5 While the launch of sites such as LMI raises the prospect of clients buying direct from media owners, media agencies argue this is not a big concern. Clients, they say, not only need to buy inventory but also require proper planning and consultation. Sandeep Goyal, chairman of LMI, says the company encourages all clients to involve their media agencies in buying. “LMI has nothing to gain from having clients buy directly on its site,” he says. “Having said that, LMI has no issue if a client wants to transact directly with the media owner.”
Manoj Malkani, vice-president of MPG India, thinks that media agencies stand to benefit. “It will help media agencies through its ease of operation and also provide opportunities to experiment with niche media.”
6 Some industry experts say the offering will work better in a place where the media is more fragmented. Amin Lakhani, head of trading at Mindshare India, points out that media in India is bought by a relatively small number of companies. “In India WPP owns about 58 per cent of media, out of which 40 per cent is owned by GroupM. Within GroupM our first port of call would be GroupM Trading.”
He also questions whether media owners will really be selling their inventory cheap on LMI.
“For top-level media there are rarely occasions where supply has overshot demand for the inventory. But if the media owners are still selling their inventory on LMI then it means they are trying to maximise their yields. In that case it cannot be cheap.”
What it means for…
Media Owners
- Media owners can get rid of their unsold inventory.
- LMI opens up a new sales channel, which reaches advertisers and buyers without any substantial investment on the part of the media owners.
- However, there is an argument that media owners must also be careful not to rely too much on this sort of sales mechanism, as doing so could affect long-term perceptions of their brands among media agencies and clients.
Media agencies
- The bigger media agencies, especially in India, will already have their own internal systems in place for buying media. LMI, however, could open up new opportunities, particularly in niche media.
- Some flexibility will be required to bring LMI into the planning process.
- Agencies need to watch the price of last-minute inventory and compare them with the prices they have already secured when buying media in bulk.
Got a view?
Email [email protected]
This article was originally published in 5 November 2009 issue of Media.
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