The Ad Man Answers #73

Thursday + Gregory Huffstutter = The Ad Man Answers

Q:  I am looking into buying remnant Cable TV and radio spots.  Any ideas?  What should I bid if I am doing a reverse auction with Bid4Spots as an example?  Are there any other ways to go after the remnant advertising on my own that you know of?  Thank you for your input.  It is greatly appreciated.

--David Domm

 

A:  Remnant advertising can be tricky business.  On the surface, it seems easy enough... you're just snatching up unsold space on TV, radio, newspapers, magazines, and websites.

But let's take a step back.

If you want a real-world equivalent to media buying, look no further than the travel industry.  Flying non-stop between LA and NY over Thanksgiving is going to cost a helluva lot more than connecting thru Houston on a random Tuesday. Basic supply & demand pricing.  It’s the same way TV networks charge a premium for "Dancing With The Stars" vs. late night reruns of "According To Jim."

At a certain point – full or half-empty – that Tuesday plane is going to take off from Houston just like that rerun of "According to Jim" is still going to air at 11pm, even if only a handful of advertisers fill the commercial breaks.

If you own an airline and have unsold seats, you can release inventory to outlets specializing in last-minute deals, like Priceline.  Because it’s better to get something for those empty middle seats, right?

In advertising, however, media outlets have a few more options.  For unsold inventory, they can air:

- Station Promos.  "Next week on FOX, don't miss an all-new episode of 'House'..."

- Public Service Announcements.  "This is your brain on drugs..."

- Bonus or Make-Goods for existing advertisers.  "We're sorry, Mr. Clorox Bleach Media Buyer, but your commercial on NFL Sunday didn't air correctly, so we're going to throw some freebies your way..."

It's in the media vendor's best interests to hang onto their inventory until the last possible deadline, hoping it will get sold at normal or slightly-discounted rates, knowing they can always fall back those station promos or PSAs. If a large advertiser unexpectedly pulls out, you might luck into a spot on "Dancing With The Stars,” but it's far more likely you’ll be airing in that 11pm "According to Jim."

Because most remnant deals are struck mere days before airdate, you need to be nimble to manage the negotiation process and back-end metrics.  Direct marketing agencies often specialize in buying remnant inventory (here's one I've worked with and can recommend), and have buying programs that measure ROI, like "Cost Per Sales Lead."  Experienced remnant buyers also have pricing history with the media vendors, and may place several accounts at once, leveraging their overall spend to secure further discounted rates.

But if you want to strike out on your own, a reverse auction like Bid4Spots is a great tool.  Reverse auctions are the opposite of eBay, which has a starting price for goods/services with potential buyers bidding up from there.  In a reverse auction, it's the buyer posting their advertising budget, dates, markets, and CPM goals (cost-per-thousand impressions), then the sellers (aka TV stations) bidding against other networks wanting to dump unsold inventory, with the lowest rate winning the transaction.

As a buyer on Bid4Spots, your strategy doesn't involve bidding per se, but establishing budgets and CPM thresholds high enough to attract desirable sellers, yet low enough to make the stations work hard for your business.  As a starting point, you can use these ballpark CPMs (not scientific, just guidelines based off experience) then whack 50-75% off.  You'll have to experiment with different budget levels and CPMs to find a sweet spot.  If you really want ESPN and TNT on your media buy, and you're only getting C-SPAN to bid for your budget, you'll need to adjust your strategy. 

GoogleTV is another way the lay person can place their own media.  In this case, it's a forward auction where you're bidding against other advertisers for station inventory.  The only downside is that most of GoogleTV's inventory is limited to DISH satellite subscribers (13 million households), with only a few networks (CNBC, Bravo, MTV, USA, MSNBC) available for purchase across their full cable universe (95 million households).

The web is a fount of remnant inventory, with ad networks specializing in packaging banner ads.  If you're willing to let the network run your advertisement across hundreds of websites – filling up quotas of unsold space – you can achieve major cost savings.  But if you’re not careful, it could mean your banner ad for “The T-Bone Lover’s Cookbook” accidentally winds up on Vegan.com.

That’s the risk of buying remnant.  Your creative needs to be ready to go on a moment’s notice, and you may not have time to check if the environment is the best fit for your message.  Plus, you need to have your funding secured and be willing to open up your schedule to non-prime placements.

Working with a trained media buyer would likely save you money and headaches in the long run.  Media people speak their own language, and the process is more complicated than calling your local ABC station, asking “So… got any spots on tomorrow’s ‘Flash Forward’ that haven’t sold yet?”

Gregory Huffstutter has been punching Ad Agency timecards for the past dozen years, working on accounts like McDonald's, KIA Motors, Suzuki Automotive, and the San Diego Padres. His first mystery, KATZ CRADLE is on submission while he's working on the sequel. The first 100 pages of his novel are linked here. For general advertising questions, leave a comment or send e-mail to katz @ gregoryhuffstutter dot com with 'Ask The Ad Man' in the subject line.