Organically Grown

Brandweek,  Oct 30, 2000  by Karl Greenberg

• E-mail
• Print
• Link

Will Organic's plan to buy keyword inventory for clients gain some traction?

Autumn is here, and as leaves peak and fall, so do keywords--at least popular terms like "car," music" and "books." For many online media planners, the dearth of top-drawer keywords means a virtual tree-shaking to catch the desirable leftovers not yet taken for the holiday shopping season. But, if San Francisco-based Organic has its way, October and November no longer needs to be a time when keyword purchase options are both limited and at a premium. The Internet services shop posits, in fact, that fall could well become a media-buying season that not only offers a plethora of choices, but a process that saves clients money.

What Organic and other like-minded companies envision is a yearly up-front model for the keyword buys for the following year that is akin to the tried-and-true up-front for network television. Indeed, that ritual, they say, can be a template for how to streamline media buying for keyword space.

Just as nothing scares a landlord like an empty apartment, a search site with keyword real estate unfulfilled is facing uncertainty in January--with impression space on its calendar looking perhaps like a checkerboard--and no base from which to determine prices for other keywords. "Locking up their keyword inventory is valuable to them .because it helps contribute to their bottom line," says Serge Del Grosso, media director for Organic, which for the second year is offering a keyword up-front to clients. "When those words are up for sale, we want to be there to secure the appropriate amount of inventory for particular clients. In a sense we are 'inventing' a seasonality that is inherent, but that few have taken the initiatve to see."

An up-front, notes Del Grosso, gives Organic the opportunity to aggregate clients' dollars and get steep discounts for sought-after words. "Car, music, books, stocks--you try to lock those words in on an annual basis," he explains. "First and fore-most it's a supply and demand issue. There is tremendous value in scarcity and that tends to drive prices up, so the quicker you can get into the buy, generally the more [of a] discount you can get. It's simple: Supply is exceeding demand this time of year."

At Organic, the idea of an up-front buy for keywords was born last year when the agency aggregated keyword dollars for two clients. According to Scott Witt, supervisor of media buying at Organic, "We started with a couple of clients between New York and San Francisco, and combined their keyword budgets instead of dealing with each as a separate entity." This year, he says, the buy includes 10 Organic clients worldwide. Tom Kiernan, Organic's vp and global director of marketing services, adds that Organic approached its clients, determined their budgets and an up-front strategy that served their needs--what keywords they wanted and at what impression levels. The yearly process, he explains, will be to "gather that information from clients, then submit an RFP to all portals and directories. Those RFPs are not from one particular client, but from Organic; we are saying, in effect, these are the words Organic wants to buy."

Kiernan notes that, historically, spending levels--the amount of money being spent against keywords--were fairly small, so keyword buys could be expedited as a series of small projects. "But we now have enough clients spending enough dollars on keywords that it makes sense to aggreagate it all and do it at one time," he says.

"Generally, the rates we achieve from from top portals are 60 to 70 percent off rate-card minimum," says Witt, "so we get steep discounts for our clients, depending on the demand for that word and the tightness of the market."

Del Grosso points out that the up-front approach requires a commitment from both Organic and this year's 10 participating clients that a one-off doesn't. "We are asking clients to commit a keyword budget early, and that's a key difference; they're used to making decisions about keyword purchases when they're making commitments to their overall advertising program because, typically, keywords are folded into a general online ad program. We are saying, let's separate that out and aggregate it early to secure lower prices [and] valuable inventory."

Marissa Gluck, an analyst with New York-based Jupiter Research, notes that agencies like Organic usually have category exclusivity with clients, but that all clients may not want the same keywords. Group purchases, she says, "will require a lot of organizational skill in Organic's back-end in terms of forecasting which words they want."

Ad serving and optimization firm Avenue A, based in Seattle, follows a strategy similar to Organic's, though theirs isn't limited to keywords, according to its director of media buying Maggie Boyer. In addition, she says, their strategy requires no money down from clients. "Avenue A looks at its average spending levels across the year and negotiates advantageous rates for everything from keyword to targeted placements, run-of-site and run of networks," Boyer explains. "And we do it without having to realize any commitments on behalf of our clients since we negotiate with our suppliers based on projections of what we will spend."