Want to use the latest new technique to battle shrinking ad inventory? Jumpstart Automotive's CEO says that time is already running out to get in on the upfront media plan.

NBC Universal Television Group CEO Jeff Zucker made news recently when he said he would include online and mobile in NBC's future upfront selling. "Every program has to have a broadband component or a mobile application. We are going to the upfront in the next few weeks with that being our mantra," he said. His was only one of a number of announcements by new media companies that said they too would try to sell their online inventory in an upfront, similar to how the traditional television market works.

And why not?  Inventory on many of the best contextual sites is fast disappearing, and behavioral targeting is starting to eat up inventory that was once hard to sell. When demand outstrips supply, prices rise and publishers who couldn't give away inventory five years ago seek greater "upfront" commitments from advertisers who find themselves in hot competition for premium ad positions on branded sites.

In the auto industry, there has been a de-facto "upfront" market in the online advertising business for more than five years. At first this was not a reaction to tight inventory but rather to the sheer competitive nature of the mammoth auto business. Even though the U.S. auto industry is going through a rough patch, it is still a fiercely competitive market. Yet, it is only starting to experience doubt about its TV spending ROI-- right at the moment when good internet inventory is fast disappearing. Here is how it has evolved.

Upfront buying is generally based on a calendar year (January through December), with the exception of a couple of imports that are flighted based on their fiscal years. Auto makers and their agencies have been scrambling to get an earlier jump on the in-market upfront process. For example, some manufacturers have started holding their Media Days (a time for publishers and the agency to preview goals, objectives, launches, budgets, et cetera, for the year ahead) in late Q1 or early Q2. We've also seen a noticeable increase in the number of agencies that are hosting in-market media days. This is when ad agencies invite publishers into their office for a day to go over all of their media initiatives. These are becoming more commonplace, and are resulting in earlier buying commitments.

Virtually every OEM is buying in-market inventory upfront, which bodes well for the industry.   

In years past, the in-market upfront strategy was to lock-up Retention (ads placed on third-party sites where your make and model are being researched) and Conquest (ads placed where visitors are researching the competition's makes and models) placements, and leave sponsorships and more upper-funnel awareness placements (such as on homepages) open to the spot market. But, in the past two years, conquest inventory has virtually been unavailable because most every OEM is buying up all of their own retention inventory, which makes behavioral targeting the best way to conquest online.

Recently, we have seen a significant increase in OEMs buying sponsorships (or other upper-funnel strategies) during the upfront process. This is because OEMs are realizing that there is no better place to broadly target a message while still reaching an audience who is fully in-market for a vehicle. The fact of the matter is you simply can't find these premium placements available by mid-year (and definitely not in Q4), and thus formal OEM participation in upfronts is key.

The in-market inventory has gotten scarcer as more and more OEMs are coming to the table. The way agencies/OEMs must plan and buy during the upfront will continue to evolve as online performance proves-out, and as the supply and demand dynamics of the market place evolve.  

Mitch Lowe is CEO of Jumpstart Automotive Media. Read his full bio here.