US Networks Nonplussed at 4As Loan Request

03 December 2002

The American Association of Advertising Agencies is trying to defuse a row with the nation’s broadcast networks over an electronic media trading system.

At the start of November, the 4As sent a letter to the networks asking for loans of up to $10,000 (€10,109; £6,459) each to finance the ‘XML repository’ scheme.

This project is all that is left of Mediaport, a joint media management agency backed to the tune of $45 million by Omnicom Group, WPP Group and Interpublic Group. Its goal was to set up an electronic system to handle the back-office functions of media buying, from receiving requests to invoicing.

The three holding companies abandoned Mediaport in September, turning the system over to the 4As and the Association of National Advertisers [WAMN: 11-Sep-02].

However, despite the 4As’ enthusiasm for the scheme, the networks have their doubts. Not one has yet responded to the letter asking for loans.

Broadcasters’ chief worry is the security of transaction details in what is a highly competitive business. “Our concern is electronic data theft, were we to exchange sensitive information within the system,” explained one anonymous network sales executive.

They also object to the manner in which the loans were requested. “The 4As should have brought us all in to explain and discuss it, instead of just sending out a solicitation letter,” complained another executive unwilling to leave his or her name.

The 4As admits it could have handled the request better, and has promised to contact the networks to set out the advantages of the system. It plans to repay the loans with revenues from an online directory of vendors, a listing on which will cost $1000 a year.

Data sourced from: MediaWeek (US); additional content by WARC staff