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Why Bid4Spots Was Created
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Problem:
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There are 11,000 commercial radio stations in the United States. Each one
broadcasts 24 hours a day with an average of 12 commercial ad units available
for sale every hour. Presuming that most stations have, on average, at least
20% of their inventories unsold during most broadcast weeks, 633,600 commercial
ad units go unsold every single day of the year in America!
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Why? Why couldn’t radio stations find a way to monetize that inventory? This
was the question that ad executive Dave Newmark posed to radio stations in 2004
when a client of his was interested in purchasing remnant radio spot inventory.
Dave discovered that discovered that radio stations didn’t want to hold “fire
sales” every week for fear that this would ruin their regular rate integrity.
So, instead, radio stations would push those unsold ad units back to the
programming department to play more music or air more talk.
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Solution:
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Dave believed there had to be a way to help stations get money for those unsold
spots and advertisers access them at low rates. He just didn’t know quite how
that would work. One night, while watching his son make a purchase on eBay, he
thought to himself, “why not do an online auction for the unsold radio
airtime”? Doing some research, he discovered that this was not a unique idea.
In fact, many companies, especially during the dot-com boom years had tried
this approach and in 2004 they were all gone. Why didn’t the online auction
model work? Dave continued to ask more questions and, during a conversation
with a software programmer friend of his, he realized what everyone had missed:
they simply had the auction model backwards! Why push the prices up in a
“forward” auction like eBay? No advertiser wants to pay the highest rate,
especially for last-minute ad buys.
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So, Dave and his ad-executive partner and wife, Patty, went to several radio
executives to float a radical idea: would their stations participate in a live,
weekly online REVERSE auction? A reverse auction has one buyer (the advertiser)
and multiple sellers (the stations) bid the prices down and the lowest radio
rates win the advertiser’s money. The radio community said they would with one
condition: the rates must be kept confidential. Dave and Patty agreed to this
and Bid4Spots was born!
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How Bid4Spots works:
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Takes Place Weekly, at the “Last Minute”
– Stations normally want to sell at the highest ad rates possible. By waiting
until the “last minute” (Thursdays from 8AM to Noon PT), stations can bid
knowing that their ad inventory for next week is truly unsold.
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Online
– So it’s fast and easy for everyone
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Auction Based
– A reverse auction where stations compete for advertising dollars and the
lowest bid wins
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CPM-Based
– Audience measurement data is built into Bid4Spots, so that when stations
compete, that competition is based on the comparison of the cost each station
wants to charge for reaching just 1,000 of their listeners. This levels the
playing field and ensures that advertisers will get the maximum value (most
listeners for the least amount of money) out of their buy
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Radio and TV – Bid4Spots is now available for U.S. radio and
cable TV as well as the radio in the United Kingdom.
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