Electronic Trading: Bombshell Or Bonanza?

Speaking at an ADMAP conference, “Electronic Trading: Bombshell or Bonanza?” in London yesterday, Mike Cobbe, former MD of Media Buying Services, laid bare the “financial irregularities” and “manipulation” across the existing media buying process.

Cobbe described current industry technology as “a bad joke, open to manipulation”. A reasonable size media buying operation would make £0.5 million per annum on interest and as much as £1m annually on inefficient invoicing by media owners – and “nobody mentions invoice discrepancies” (buying point is undercharged; client is still fully charged).

Clients know buyers are taking a slice but are not keen to speak out publicly, according to Cobbe. The IPA’s John Road recently stated that “transparency isn’t really an issue”, but for buyers the “hidden income is greater than the inefficiency costs.”

Cobbe’s theme was that electronic trading, which he viewed as “inevitable” in the UK, would provide intelligent systems which would benefit advertisers and provide greater transparency. Benefits also include huge savings on production costs and the creation of a level playing field which will “empower the talented individuals” and remove the current large v small conflict.

He urged the IPA to force the formation of an industry committee now. Lynne Robinson, replying from the floor for the IPA said that this issue would pick up pace during the course of the year, but cautioned that the need for common standards and the practical and financial difficulties of including smaller media owners remained potential constraints.