How Wholesale Airtime Auction’s Auction Program Works

01/30/2015

“How does your auction program work?” This is one of the questions we get asked the most often, and with good reason: for advertisers who aren’t familiar with how airtime works, the way our auction program helps them save money can seem like some kind of wizardry. But it’s not magic – it’s just simple supply and demand, along with some basic properties of airtime that might surprise you.

It’s easy to think of airtime as just air, an intangible and functionally infinite commodity, but airtime is also time, which is valuable and very, very limited. Time is also generally only valuable when it is – of course – timely: five minutes of a firefighter’s time would be precious while your building is on fire, but worthless after it’s burned down. Airtime is no different. It might be hard to think of it as being in the same category as, say, milk, or bread, or produce, but airtime is a perishable commodity: it is only valuable before it goes to air, and worthless afterwards.

This is a scenario that TV and radio stations prefer to avoid whenever possible!

TV and radio stations have a fixed inventory of airtime slots to sell each day. Whatever they don’t sell becomes lost revenue: they have to give it away to their other paying customers or use it for public service announcements. Either way, they make no money off of it. It’s business at its most simple. This is a shining example about how changing times can change the way that businesses operate: before the Internet became a viable advertising channel in the mid-‘90s, stations rarely had to worry about unsold airtime, but once they started facing competition from PPC (Pay-Per-Click) advertising, banner advertising, affiliate marketing, and other forms of Internet-based advertising, they started finding themselves with an uncomfortable amount of unsold inventory on hand. Even now, two decades later, stations are still feeling the impact of Internet advertising.

Here’s where our auction program comes in. Stations have a supply of unsold airtime they want to sell; advertisers demand lower prices for TV and radio airtime. Our auction program bridges the gap between the two by letting advertisers bid stations’ unsold airtime inventory, saving as much as 85% off of typical airtime costs in the process. This is how it goes:

First, we work out an RBS (recommended bidding strategy) based on your specific requirements as an advertiser. We have strategies for local, regional, and even national TV and/or radio advertising campaigns. Each RBS provides a set of schedules designed to provide optimal frequency and reach to ensure the effectiveness of your campaign. We advise our customers to have multiple spots each day over a 2-week, 4-week, or 6-week cycle and work with multiple stations and timeframes in order to reach as many people in their target demographic as possible.

Second, once we agree on the budget and campaign schedule, we schedule an auction 2 weeks before the campaign is set to start. Bids are submitted to stations on a “first come, first served” basis – each station that receives your bids knows that they’re competing with other stations for your money, and they will race each other to snap up your bid rather than let it go to someone else. This is how “name your own price” bidding works – you turn the stations’ need for profit to your own advantage by making them compete against one another. Plus, all bidding is done on a CPM (cost per thousand) basis: you’re paying for the number of impressions your ads will receive, not fuzzy numbers like show or station popularity. The process repeats itself until the budget you set is exhausted – you’ll never be forced to pay more than you want for your campaign.

As always, feel free to call us with any questions you might have about TV and radio advertising. Even if you’re not spending money with us, we’re still happy to help!

Wholesale Airtime Auction LLC
214-306-4638 (Office)
972-421-1530 (Fax)