Local cable operators will be able to sell unused inventory in a reverse-auction process from Bid4Spots.com beginning June 11 for the broadcast week of June 15.
Bid4Spots has been conducting online auctions for radio airtime for four years, according to CEO Dave Newmark. The company gives radio stations and now cable operators the opportunity to attract new advertisers and sell inventory that hasn't been sold, he said.
Cable systems will vie for advertisers' money but they have flexibility in what they are willing to take and which slots are available.
"There is no obligation on the part of the cable operators," Newmark said. "They sign up and look at what the advertisers want and they decide whether to participate or bid. Advertisers post all their criteria, including the demographics they want to reach, the markets they want to reach, the cost per thousand they are willing to pay and their budget. Operators are invited to participate in the auctions."
The reverse auction works this way:
Advertisers post what they are willing to pay on a cost per thousand (CPM) basis. They determine which markets they want to be in and which demographics they want to lure.
Sponsors can choose the networks where they want their ads to run or the system can recommend networks, depending on the markets they choose, according to the advertisers' desired demographic. They upload their ads and the auction is set to begin.
Operators can decide whether to participate in any given auction. A system can see the ad before it agrees to participate and may set its own floor. Every Thursday between 8 a.m. to 12 p.m. (PT), the operators can compete for advertisers' dollars for the following week. The lowest bidders win.
The concept has been widely popular among advertisers buying radio time, Newmark said.
"When we first started this, it was so new and nobody really knew what to expect," he said. "But it has been very successful and popular with both advertisers and radio stations."
So popular, in fact, that Bid4Spots doubled its business last year. Advertisers have been pushing for Newmark to expand his business to local cable for some time, he said.
Cable companies are cautiously optimistic about the prospects. Comcast Spotlight spokesman Chris Ellis said it's something the company will examine closely although he noted that Spotlight already has internal programs designed to maximize its inventory opportunities.
Newmark said the Bid4Spots process gives operators the opportunity to lure new advertisers that they might not have been able to attract in the past and advertisers get the opportunity to expand their reach into new markets.
"We did some research and found that radio and local cable have many similarities," he said. "We think the success for both sides will be equally similar. We have already signed up systems counting about 2 million cable households and we only announced the program four days ago."
Most of the advertisers that currently participate in the Bid4Spots program are midsized national businesses and online firms, Newmark said. Financial-services companies, including insurance, credit, mortgage, gold sellers and investment firms, use the program regularly, he said. Online firms offering goods and services also regularly take part in weekly auctions.