Kelsey-grouf-spotrunner
Spotrunner -- making the production and placement of local TV ads simple, automated
Kelsey gave serial internet entrepreneur Nick Grouf a keynote-speaker platform on Tuesday to describe the evolution of his http://www.spotrunner.com, which is trying to make the process of a local retailer producing and placing local broadcast and cable TV spots a self-service, web-based option.
Grouf -- who started a company purchased by Microsoft in 1998, got involved in helping restructure the John Kerry campaigns Internet fund-raising apparatus in 2004 and raised $80 million on the resulting platform. "And almost all of the money got spent on local television," he said. They learned how to target ads down to the neighborhood using cable.
After the campaign, Grouf took the platform and moved forward with the idea of making ad production and placement nearly self-service via a web interface. He now calls Spotrunner a full-service agency that is starting on TV but will expand into radio and other media. Among directors of Spotrunner is Robert Pittman, the first CEO of MTV and early executive at America Online, among investors, he said, is the Rupert Murdoch family.
Grouf praised Google's executive in local search advertising so far, but he said Google needs to decide whether it is going to be an advertising agency or a media company or a technology company. "I think that is something they are going to have to resolve and I thin as they do, the relationship with the media companies is going to start to improve," said Grouf.
Murdoch family invested in Spotrunner "Becuase they feel that we've really solved the local problem."
"For the small business, TV has been the Holy Grail," said Grouf. "The little guy can't compete because it is too expensive."
Grouf says that using Spotrunner, you can buy 30 seconds of premium time on any major market for under $200 -- or 30 seconds on CC in Santa Barbara for $10 or $12 per spot. The minimum purchase for a Spotrunner schedule is $550 and Grouf sees no reason to go lower than that.
"We told this to local businesses and their jaws dropped," said Grouf. "But they said it didn't matter -- we can't afford the creative." Spotrunner's solution -- produce an array of spots for retail industry segments and load them on the server where businesses can browse, click on the one they want to use, and then upload their logo and signature wording and they're done. Then the website lets users selection a targetted geography by zip code and specific cable system or subsystem.
Next, Spotrunner has started focusing on being the agency for national franchises. "They are trying to get their agents to stop using dead-tree media," Grouf said he was told. Now Spotrunner is, in effect, agent for 260,000 of real-estate agents out of 10,000 local offices around the country. They are also working on real-estate, restaurant chains and fitness chains. "We're bringing a whole new category of advertiser into the television market," said Grouf.
Spotrunner is also working to turn co-operative advertising dollars to cable and broadcast TV. As an example, he cited a relationship with the DeBeers diamond producer, which pays the JWT GRoup and Spotrunner to produce generic jewelry spots that can be customized and scheduled via the web by local jewelers -- and DeBeers pays for much of the cost.
Grouf says Spotrunner has identified local TV and cable advertising buy options in 50 states and nealry 100% coverage. Of 210 DMAs around the country, Spotrunner has broken them into several thousand neighborhoods.
"There is a fantastic marriage betwen online and television and over the next few years we are going to see that final convergence," said Grouf. "TV/online will be purchased "all the way down to the household." That will be a clickable environment and a recordable environment.
"I think the idea of these prefabricated commercials for the local advertiser is a great idea -- sort of like the Charles Schwab for the local advertising world," says Nick Veronis of Veronis Suhler Stephenson, the investment banking firm.
