Regardless of whether the market is upfront, scatter, national
spot, or local, the media buying and selling process involves
a series of sequential bilateral negotiations in which agencies
attempt to obtain the best buys on behalf of their clients
while media sellers attempt to obtain the best prices and avoid
unsold inventory. Numerous features of the current process, including
the absence of transparent market clearing prices, ensure that market
participants leave significant money on the table.
At the encouragement of a group of some of the world's largest
advertisers, we scientifically examined the economic performance
of the current buying and selling process involving the trading
of national spot (TV) media. Our results show that market participants
capture, at best, only 61% of the available gains of trade
under the current buying and selling process. This compares
to 82% under AdEx, Siena's proprietary trading system.
Given
that over $18.5 billion in national spot media (TV) are traded
each year, this result means that advertisers and media sellers
leave several billions of dollars on the table each year in
this market alone.
For more information on Siena’s path-breaking analysis, including
information on how to obtain a copy, see the
Media
Case Study Highlights.