Ben Kuo from SoCalTech.com recently interviewed Bid4Spots Founder and CEO Dave Newmark. Bid4Spots is a Los Angeles area company that auctions unsold radio inventory through a weekly reverse auction.
During the auction process radio stations compete for the advertiser's budget and the lowest price (based on CPM) wins. This model works across many different segments (hint: When Banks Compete, You Win).
The company claims that peak time slots (like drive-time) have sold for as little as US$10 to $30. Like so many good ideas, the Bid4Spots concept came from one of Mr. Newmark's advertising clients that needed help buying unsold national radio spots across local markets. This problem is analogous to what we hear from some businesses regarding Internet advertising. Specifically, they want help buying locally oriented PFP ads on a national basis.
In a related article today, Sarah McBride of The Wall Street Journal wrote a great piece about audience measurement, Arbitron and industry leader Clear Channel Communications. The article talks about the need for a better audience measurement tool.
The showdown comes as the industry has decided that the old diary system is an antiquated, unreliable embarrassment. Spurring the desire for change is the lackluster growth in radio advertising revenue, along with competition from advertising media like the Internet, which can show exactly how many people visited various Web sites and how long they stayed. "We’re in an electronic age," says Joel Hollander, chairman and chief executive of CBS Radio. "We need more instantaneous measurement."
Google’s acquisition of dMarc is worth mentioning in this context. Further, Internet companies are actively trying to extend their systems to include offline adverting. The desire for a more robust measuring solution and the macro climate make Bid4Spots worth watching.