Reuters AdValue Network Plans to Target DRTV Buyers

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Reuters America, the media and transaction management giant, hopes to sign up more DRTV media buyers to its automated spot ordering system.


The system, called the AdValue Network, allows a buyer to place a spot order with a TV station from a desktop personal computer, eliminating the need to send the order by fax or FedEx at the last minute. Because DRTV spot buyers look for unsold remnant time on a daily basis, the system would allow them to place orders quickly. "Instead of going through paper and faxes and getting quite messy, it's now highly electronic," said Alexander Hungate, executive vice president of Reuters Marketing Information. "Most other industries, like Wall Street, have something high-tech like this, but Madison Avenue really never has had much use of technology. We want to change that and reduce some of the inefficiencies." Another Reuters system, Dealing 2000, handles about 50 percent of the world's foreign exchange transactions, amounting to about $500 billion a day.


Low-Cost Technologies


The company charges between $100 and $200 a month for every user who accesses the AdValue Network, the price varying with the volume of users. Larger media rep firms may have between 500 and 600 users of the system, while smaller agencies may only one or two users. The system relies on less expensive Internet technologies that allow subscribing buyer with a personal computer and modem to connect to the network.


Reuters handled $2.1 billion in spot orders last year, which was a 50 percent increase from year before. Hungate said the company is hoping to reach the $3 billion mark this year, which would give it a sizable share of the $20 billion spot market.


"We would like to get a really good penetration level," Hungate said. "It should become a way of life for the TV stations."


The company has 300 of the 1,000 TV stations in this country online with the system, which is capable of automatically sending faxed orders to the remaining stations.


The ability to place immediate orders with stations has led on media buyer to observe a blurring between general awareness spot buys and DRTV spot buys.


"We've found that the ability to make immediate changes to an order is becoming more important," said Benita LeFlore, Zenith Media, a media buying agency in New York. "Especially in the case of doing shorter term promotions that have to be managed closely."


She said one example of this kind of promotion would be for a fast food chain that runs a promotional spot, but may find its inventory levels cannot keep up with increased demand. In that case, the spot may have to be pulled.


Reuters has about 2,000 subscribers to the system from about 30 different organizations. It targeted the largest media buyers first, including Bates USA, McCann-Erickson, Young & Rubicam, Zenith Media, Televest and Western International. While Reuters wanted to reach a critical mass of users at major firms, Hungate said that the system can work for any firm or agency.


"No media buyer is too small," Hungate said. "With access delivered through the Internet, there are no big fixed costs." The company provides training to subscribers to the network, while the software can be downloaded directly from the Internet.
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