Arnold Cozies Up to Yahoo! With Upfront Deal

Yahoo! is receiving a vote of confidence from Havas’ Arnold MPG unit, which said on Monday that it has committed to buying inventory on the Web portal on behalf of a number of clients.

The commitment is designed to emulate the upfront buying process of traditional broadcast media. For publishers, such a move is a way to “lock in” advertisers for a set period and price, typically for a full year or season. (Yahoo! and Arnold declined to discuss terms of their agreement.) For advertisers, meanwhile, upfront buying can include discounted rates and other value-added services, like improved customer support.

Online media has never had an upfront buying process — a fact that has contributed to traditional media buyers’ unwillingness to explore the medium. Indeed, many industry leaders, like DoubleClick’s Kevin Ryan, contend that Web media planning is stymied by overly complicated and nonstandard buying processes, while broadcast media benefit from well-established institutions like upfront.

As a result, should more agencies follow Boston-based Arnold’s example, it’s likely to effect a major change in the way that Web media is bought and sold. At least, that’s the hope.

Web advertising leaders have been trying for months to convince agencies to spend a portion of their traditional media clients’ budgets online. So far, the effort has included industry initiatives like standardized larger-than-banner units, terms and conditions and rich media guidelines. (The Interactive Advertising Bureau on Tuesday also is expected to introduce standards for ad delivery measurement.)

Specific publishers also have made efforts to step away from impressions in favor of selling media in terms of reach and frequency — conventions familiar to the offline media buyer.

Now, it’s agencies’ turn to pick up the mantle, said Dave Song, vice president of interactive media at Arnold.

“It’s time to make a difference,” he said. “We need to mirror our buying and planning to traditional planning. We think by changing the standards a little … we can use online very effective with rest of our communication plans. This is a very effective branding medium.”

Added Wenda Harris Millard, Yahoo!’s chief advertising sales officer, “This type of commitment is necessary to support the continued growth and maturity of this marketplace.”

Song, whose background is in broadcast buying, had been working on hammering out an upfront agreement with a number of Web portals since summer. He said that the move emerged from a desire to see everyone benefit from a shift away from last-minute, disjointed impression-based buys to upfront buying, reach and frequency metrics, established seasons, and offline tie-ins.

“It’s easier for the agency especially when we know clients have major pushes, all the marketing platforms are being designed with seasonality in mind,” he said. “And it makes sense to change the way online media is purchased, to go with reach and frequency. Knowing that we have [the Yahoo! agreement] has made a big difference in planning cycles. Since we have this agreement, we can just throw online in with TV, print or radio.”

Song said several Arnold clients, including Volkswagen, Chevron, Fidelity Investments and Royal Caribbean, have agreed to participate in Yahoo!’s upfront agreement.

Song also said that the effort was motivated out of an effort to build relationships with the major portals.

“It’s important as an agency to establish a relationship with sites. When we stared this, the portals had been having very negative press about being hard to work with, so we decided test that — either yes, that’s correct and we have to go with another site, or no. And [by inking close agreements with media outlets], there’s added value, like customer service.”

While it’s not yet known how the agreement will impact its bottom line, the news also would seem to bode well for Yahoo!. The Sunnyvale, Calif.-based portal, which is slated to report earnings on Wednesday, has been reeling for the past several quarters due to the industry-wide drop-off in ad spending. During that time, especially since last year’s appointment of chief executive Terry Semel, Yahoo! has redoubled efforts to woo big-name advertisers.

It’s also not known what other sites were involved with Arnold in considering an upfront agreement, though Song said Yahoo!’s efforts to meet his clients’ needs were “bar-none … the best.”

News Around the Web