March 14, 2006 6:12 AM PST

Spot Runner culls unsold TV spots

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CARLSBAD, Calif.--If Spot Runner co-founder Nick Grouf is right, local convenience stores and kebab stands will soon be advertising on national cable networks.

Spot Runner has created a media-buying application that seeks out cheap ad slots on networks such as the Outdoor Life Network, CNN and AMC and then books them for small and medium-size businesses. The company also gives its clients relatively generic ads that can be slightly customized, so they don't have to create their own spots.

The problem that the Los Angeles-based start-up is addressing is that cable networks don't sell all their ad spots.

Nick Grouf Nick Grouf, CEO,
Spot Runner

"There are a lot more (empty spots) than you think," Grouf said Monday in one of the more heavily attended sessions here at PC Forum, a three-day conference that ends Tuesday. "Right now, the national TV networks represent one-third of the eyeballs, but they take two-thirds of the ad dollars. That is going to start to change."

Many people assume that a 30-second spot on cable TV during prime time costs around $10,000, Grouf said. Actually, TV spots on many brand-name cable networks during prime time can sell for a lark. In a demonstration, Grouf booked commercial slots on several cable networks to be aired in Berkeley, Calif., for about $18 dollars a spot.

Booking the ad through Spot Runner also eliminates the costs of hiring a human media buyer or putting the ad together, the privately held company said.

So far, Spot Runner has become an agency of record for several real estate agencies, including Coldwell Banker. While most clients go with the generic ads, the company will also create an entirely original piece for $10,000.

PC Forum 2006

The site, in its look and feel, sort of resembles Hotels.com. Customers select where and when they want to run ads and make minor changes in the voiceover script. (The business owner can add the name of the business.) The system then spits back available time slots and prices. A credit card number seals the deal. Grouf would not say whether Spot Runner buys the ads in advance or whether it merely knows which spots are available and buys them when the customer submits a credit card.

Spot Runner was started two years ago and has been placing ads on TV for about a year. It helped one call center agency run ads for new employees to accommodate a flood of work that came in after Hurricane Katrina. Spot Runner came out of stealth mode in January.

Grouf founded the company with David Waxman. Back in 1995, the two created Firefly Network, which Microsoft bought in 1998. The pair then formed PeoplePC during the "free PC" craze of the late 1990s. Most of the other "free PC" companies crumbled, and People PC itself endured severe difficulties. In 2002, however, PeoplePC was bought up by Internet service provider EarthLink.

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8 comments

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I'd be surprised if Google doesn't buy 'em
They are doing to TV that Google is trying to do with newspapers, magazines, etc. I don't know why they haven't yet.
Posted by joshhyde (13 comments )
Reply Link Flag
not exactly accurate....
I work for a cable TV network and before that I worked for two local TV stations. Looking at the site, it seems this service is selling LOCAL advertising time that is given to local cable companies in exchange for carrying cable network programming.

You are not buying time on CNN, Bravo, TNT. You are NOT getting national coverage in prime time. You are only buying local coverage in a particular market. This may be exactly what a local business wants. But, you are buying time on in a certian locality through a cable company like Comcast or Charter; that cable company is then inserting the commercial into the network feed of whatever channels you designate.

For instance a network like CNN gives about 2 minutes each half hour which the cable companies can use as they please. If the local cable companies don't air commercials in that time slot you would see network promotional spots (promos) or public service announcements (PSAs). SOMETHING is airing there, but the cable companies are given the right to "cover" those spot with local commercials. Sometimes you even see a split second of these anyway if the cable company doesn't do a good job of "covering" the national spot with the local commercial.

So, although technically the commercials are seen to be airing on CNN or Bravo or TNT, you are not dealing with any of those networks. You are buying ad time from local cable companies.
Posted by ChazzMatt (169 comments )
Reply Link Flag
here's why
"The problem that the Los Angeles-based start-up is addressing is that cable networks don't sell all their ad spots."

The cable networks are NOT responsible for selling the cable companies' local time. The local cable companies can do what they want with that time. Maybe CNN, Bravo, and TNT don't sell all their own time -- but this service does not buy time from the national cable networks -- it only buys local cable company time.
Posted by ChazzMatt (169 comments )
Link Flag
Cheap TV spots are not unsold TV spots
The premise of "unsold spots" or "remnant spots" is patently
false. That's not how the TV air time industry works. All local
and national spots start off as unsold. When was the last time
you saw 30 seconds of silence on your local cable? All of the
spots are sold or used one way or another, and often the
lowest-bidding advertisers don't even get on the air. Air time is
a commodity; it is sold to the highest bidder, not the lowest
bidder. These automated air time sales companies neglect to
tell the client that they will most certainly be pre-empted by
another advertiser with deeper pockets - even if it's just $1
more per airing.

Further, even a beginning marketing student knows that
advertising messages must be carefully crafted, not picked from
a "used-ad" bin. If the advertiser offers something unique, the
commercial must be unique. The TV audience is more
sophisticated than one might think.

TV production and air time are traditionally low-margin
businesses. The fact that an automated service turns out a low-
quality, ineffective ad may be incidental to a large investor. It
may well be that the only reason this service was created was
with the hope it would be bought by a larger company. If that is
the real motive, then the endeavor is nothing less than brilliant.
Posted by cablespots (11 comments )
Reply Link Flag
Cheap TV spots are not unsold TV spots
The premise of "unsold spots" or "remnant spots" is patently
false. That's not how the TV air time industry works. All local
and national spots start off as unsold. When was the last time
you saw 30 seconds of silence on your local cable? All of the
spots are sold or used one way or another, and often the
lowest-bidding advertisers don't even get on the air. Air time is
a commodity; it is sold to the highest bidder, not the lowest
bidder. These automated air time sales companies neglect to
tell the client that they will most certainly be pre-empted by
another advertiser with deeper pockets - even if it's just $1
more per airing.

Further, even a beginning marketing student knows that
advertising messages must be carefully crafted, not picked from
a "used-ad" bin. If the advertiser offers something unique, the
commercial must be unique. The TV audience is more
sophisticated than one might think.

TV production and air time are traditionally low-margin
businesses. The fact that an automated service turns out a low-
quality, ineffective ad may be incidental to a large investor. It
may well be that the only reason this service was created was
with the hope it would be bought by a larger company. If that is
the real motive, then the endeavor is nothing less than brilliant.
Posted by cablespots (11 comments )
Reply Link Flag
Already Been Done Better
I think this has already been done, better and cheaper by the
first internet-based TV ad agency Cheap-TV-Spots.com which
has been doing this nationally and internationally for 6 years.
Their new service www.BareNakedAds.com is outstanding and
produces national quality TV ads for free. Cheap TV Spots steals
away a lot of business from these template agencies, both for
production and air time because CheapTVSpots.com doesn't add
fees to the network air time rate and their production quality is
higher. It's worth a serious comparison, especially if a business
is on a budget.
Posted by DanceMonkeyDance (1 comment )
Reply Link Flag
Yes, already done better by Commercial Creator.
I recently ordered a commercial from CommercialCreator.com. Their service is similar to spot runner except one major difference, it is completely custom. You can pick any video clips you like and upload your own images, type your own voiceover, and pick your own music. It about the same price as Spot Runner, but honestly gives you much more bang for your buck. I checked out Cheap TV Spots, but their commercials are a bit expensive and don't really have that professional feel that the stock footage gives you. My money is on Commercial Creator.
Posted by kunal.pack (1 comment )
Reply Link Flag
Commercial Creator is a substandard operation that produces commercials that are ineffective and technically sloppy. His ads do not meet broadcast specification and TV networks would reject the ones that I've seen. The company is guilty of false advertising and making false and misleading statements. The above comment from kunal.pack is by J.W. the sole proprietor.
Posted by theCorpCOO (5 comments )
Link Flag
 

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