Media Investment: A Different Approach to Buying and Selling

There are no jokes to tell when it comes to discussing how the ad-spend slowdown negatively impacted the media industry.

While there is a sign of a recovery peeking its head just over the horizon, many media companies are still dealing with the aftermath and digging themselves out of the abyss.

Dear publisher, imagine if you could’ve had cash on hand back in April when the pipes were extremely dry—as an investment ahead of the demand that’s been starting to trickle in over the recent months. Dear advertiser, imagine if back in April you had another way to pay for your media buys than having to think about paying outright cash. Maybe both of you wouldn’t have had to resort to layoffs and furloughs. Maybe there were alternatives.

Evergreen Trading is a media trading firm, providing clients with media investment strategies. The company works with media vendors to invest in their current and future inventory, taking on the risk, ahead of market demand. Meanwhile, their clients trade in assets in exchange for those media buys.

Editorial Director, Gavin Dunaway spoke with Evergreen Trading’s Chief Operating Officer, Mark Ordover, to gain a deeper understanding of the role Evergreen Trading plays as a media investment agency within the buy-sell relationship between marketers and media companies, as well as how they can help publishers losing spend to the identity-rich walled gardens.

Gavin Dunaway: So you’re not a media agency, but a media investment agency—what does that mean?

Mark Ordover: In its simplest form, we are not a media “broker” which is the same as a media agency. We invest our capital to create win-win-win outcomes and our investment arena is the media marketplace.

Our company works with media content providers/publishers to create a mutual win for our clients and the publishers. By investing in various media providers, at a time when they may need the funding or commitments versus when a client wants to advertise, we take on the timing and commitment risk.

In our business model we take on more risk and get more return than that of a traditional media agency.  If we do our jobs well, this gives us more to offer our clients. We need to have made those commitments ahead of when clients may order their media, therefore we are making bets on where our clients will ask us to execute on their behalf in future periods.

The purpose of this investment activity is to be able to execute media in future periods at aggressive enough rates compared to our clients current market benchmarks. That spread between our ability to execute media and what our clients planned market rates are, enables them to pay a portion of their media bill with trade generated from selling surplus assets. This creates a financial benefit for our clients while having provided a valuable service to the media provider.

GD: Can you share how you buy or sell media futures? What are your arrangements with publishers?

MO: As a media investment agency, we work in an execution space with all media companies where our investment relationships are private (non-disclosed) between the two companies. This is typical in most of the “buy-sell” world but not as typical in the agency world where they are arranging sales but not participating in the chain of ownership (risk).

Given this working relationship, we can create many different solutions for media companies for operational issues they may be facing that are not unlike issues that our corporate clients also face.

Whether it is driving incremental quarterly revenue, or investing in Startup lines of business, we can invest in media companies in many ways. Some of them are:

  • Upfront financial investments,
  • volume commitments that are hard commitments,
  • advantageous payment terms versus current corporate payment terms,
  • or providing media for tune-in advertising.

We always agree to get paid back in a future media commitment that enables Evergreen to access their content at aggressive rates.

GD: You work a great deal with agencies. How do you think the pandemic has affected the agency approach to digital media?

MO: I am not sure I am qualified to comment on other agencies’ approaches to digital media during the Pandemic. For Evergreen though,  our digital side of our agency has not had any more or less effect from the pandemic than our more traditional lines of business. Every business unit has witnessed an uptick in unpredictability in media plans that are canceled at the last minute and some that are greenlighted with little time for preparation.

Depending on which client we may be working with, the pandemic has affected them and therefore us on many levels. Initially, some of those issues for us were and are:

  1. Clients that curtailed all advertising for various periods as they tried to figure out how to bring their services or products to market;
  2. Clients that pivoted away from many mediums based on changes in consumer behavior including all OOH (both digital and Static), dramatically reduced local radio, digital audio and network radio;
  3. The reduction of sports programming and the filming and development of all new programming for a period of time put a squeeze on original programming availability which tends to drive higher audience viewership at a time when people were heading for their screens.

I can say we have seen a very tight inventory availability in all forms of video during Q4 and a big volume pick up in our execution of digital video whether it is through the more traditional or legacy content providers, as well as newer content players with an audience-based delivery platform.

GD: How will the expiration of the third-party cookie open up opportunities for your business? How can you help publishers losing spend to the identity-rich walled gardens?

MO: We know that the move away from third-party cookies does not mean an end to cookies and that first-party cookies from advertisers and publishers will still be in place.

We believe this shift in data usage opens up the opportunity to grow first-party client data from advertisers and combine it with rich ecommerce, telco and wireless data from companies like Verizon, Amazon, and Comcast.

Through deeper partnerships with these companies, brands will be able to apply their data to reach current and likely customers for retention and cross-selling opportunities.

Meanwhile, the cable and wireless providers, along with their networks provide access to modeled audiences that represent prospects for upper-funnel awareness buys (subscriber data).  The evolution of CTV and FEP video on personal devices gives publishers of premium content a much-improved canvas for delivering ads. When combined with great client service and collaboration across publishers.  This approach provides a nice compliment to the walled garden approach.