Invision: The Evolution of EDI in Media: No Need to Reinvent When an Update Will Work - Bob Von Kohorn - MediaBizBloggers

Every year, cable and broadcast networks and ad agencies cumulatively lose millions of dollars in lost time and cash flow reconciling invoice discrepancies, resolving incorrect copy material assignments, and airing the resulting make-goods. The problem is sufficient to grab the attention of the 4A's, which is developing its 'ebiz for media' initiative, and the ANA, which is working on its 'AD-ID' asset coding system.

My colleague Ashley Barretto recently pondered, in this same space, why we seem to be stuck on electronic communications for contracts and invoices, when the opportunities are rife to eliminate other inefficiencies in the television buy/sell process (September 9, 2009). I, on the other hand, wonder why we continue developing new approaches to already-solved challenges. There already exist solutions to the next logical set of electronic transactions, which would work perfectly well with minor updating. It seems like we keep grabbing the same low-hanging fruit year after year, instead of moving to the next logical level.

In the mid-90s, TECC (The EDI Cable Committee) developed standards for the electronic execution of new contracts, invoices, contract revisions and acknowledgments between networks and agencies. TECC also developed standards for agencies to electronically send brand allocation instructions and commercial material instructions to networks. The new contract and invoice EDI transactions were implemented after much rumination, and survive to this day in various stages of evolution. These two transactions alone have saved agencies and networks countless hours of manual labor, and avoided innumerable invoice discrepancies. After more than 15 years of usage, these transactions have certainly earned their keep.

But what happened to TECC's contract revision, brand allocation and commercial material instruction designs? Two of the largest agency system vendors have nearly completed implementing their versions of electronic contract revisions, whereby two versions of a "new" contract are compared – the original "new" contract and the current "new" contract as it appears after months of order changes – and the delta is determined. Presumably agencies will want to verify the delta represents approved changes, and update their agency systems to reflect the current orders' status. But this approach, though potentially cost effective, causes a lost opportunity for communicating change approvals and maintaining transaction audit trails. The company I work for has already seen agencies and networks experience difficulty trying to resolve the delta, in which perfectly valid network order maintenance changes are being rejected by the agency system for seemingly meaningless reasons. If only they had better communicated along the way.

More importantly though, our rush to technological empowerment could undermine our ability to maintain sound business controls: AD-ID is a fabulous concept. Its implementation offers potentially huge savings and may enable many industry advances – huge accolades for AD-ID. But "traditional" network advertising requires proper inventory management and commercial scheduling, both so that networks can maximize inventory utilization, and avoid basic product scheduling conflicts. Imagine this: an agency executes a large Upfront buy with network. The agency buy is for an advertiser with 20+ brands. The network confirms the buy using a generic "corporate" brand, and reserves generic inventory in several programs across the Upfront year. The traditional brand allocation dance ensues, and the network assures the advertiser's units are scheduled so as to maintain self-protect guidelines and also avoid product scheduling conflicts with competing brands. This process is of huge importance.

With AD-ID's potential, agencies could simply send the AD-ID to the network anytime up to shortly before air, and the network would be able to "grab" the matching content from a virtual digital server and air whatever material the AD-ID designates. Agencies could make last-minute changes for under- and over-performing brands by simply switching out the AD-ID copy on that virtual digital server. The brand allocation and commercial material instruction processes could be all but eliminated - except that doing so will risk product conflicts and under-utilized network inventory. Time that might have been sold as multiple units to multiple brands at appropriately negotiated CPMs could instead end up being sold as one large unit, with an AD-ID being sent for multiple cuts representing what are actually entirely separate commercials. A clever agency could even do a time-buy for entire commercial breaks, and re-sell the time to several advertisers, managing the differentiation of commercials via several multi-cut AD-IDs. Scary.

The industry must assure the basic inventory controls of proper brand allocation and commercial material instructions are maintained as it implements such technological improvements as AD-ID. The earlier-mentioned large-agency vendors' systems that determine the delta between the original and current "new" contracts need to assure that routinely acceptable network maintenance doesn't gum up the works and create more work than it's intended to save.

Maybe it's time to dust off, update and consider implementing those unused TECC transactions for contract revisions, brand allocation and commercial material instructions.

Bob Von Kohorn is Senior Business Analyst for INVISION Inc.

Read all Bob's MediaBizBloggers commentaries at Invision - MediaBizBloggers.