Saturday, February 23, 2008

Publicis Adopts 'Yield Management,' Will Utilize System For Cross-Internet Media Buys | MediaPost

by Joe Mandese, Friday, Feb 8, 2008 8:30 AM ET
IN A MOVE TO CREATE greater "transparency" in its purchases of digital media, Publicis Groupe Media this morning announced a deal to incorporate "yield management" systems developed by Rapt Inc. The deal gives Publicis media and interactive agencies a dashboard like system to look across the inventory and pricing strategies of various media sellers they are negotiating with.

"For example, a publisher will be able use Rapt Information Services to analyze historic and expected demand for video advertising and proactively align their pricing and inventory strategies to better serve the market," the companies said.

Yield management systems have been used historically by the travel industry, especially airlines, to optimize revenue for their inventory - pricing and re-pricing airline seats, hotel room vacancies, etc., based on increases and decreases in demand. Over the years, some major media companies, including television networks, have tried to incorporate such systems into their sales operations, but are believed to have defaulted to traditional person-to-person negotiations in their deals.

Publicis claims the Rapt system will give its media buyers the advantage of "real-world metrics across the digital advertising spectrum," enabling them to make more informed purchases and plans.

"For example, in negotiating prices on behalf of a pharmaceutical company for placements on a premium online health site, a media planner can use Rapt Information Services to better understand the external market value for relevant inventories and content types," the company said.

Publicis said it would utilize the system for its Starcom MediaVest Group, ZenithOptimedia Group and Digitas units to create "greater transparency and liquidity" on an estimated $1.5 billion in cross-Internet media buys.

"Digital ad purchasing is still too opaque and inefficient," Jack Klues, chairman of Publicis Groupe Media stated, adding, "We are partnering with Rapt because we share their belief that clearer baselines, metrics, and indices will only expand the total market. We are delighted to help shape this initiative and lay the cornerstone of the program's data foundation."

Joe Mandese is Editor of MediaPost.

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