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Spot Runner Taps Web to Create Ads, Book Airtime

The agency seeks to level the TV playing field, offering professional commercials and placement service to small businesses at a low cost.

January 24, 2006|Chris Gaither | Times staff writer

Ryan Lapidus didn't want to be one of those lawyers.

The amateur look of most attorney ads on television had soured him on the medium for promoting Lapidus & Lapidus, the intellectual property and entertainment law firm he started in Los Angeles with his brother, Daniel.

"My experience was those guys late-night -- 'I'm here to fight for you,' and 'Friends don't let friends plead guilty,' " he said. "That's so far from our practice that TV didn't even occur to me."

The Internet changed his mind.

The Lapidus brothers hired a new ad agency, Spot Runner Inc., that uses the Net to help small businesses create professional-looking TV ads for a few hundred dollars and then place them on local cable broadcasts.

Spot Runner is tapping a trend pioneered by Google Inc.: using software to make the advertising business more efficient and bring Madison Avenue to the masses.

Google generates billions of dollars in annual revenue through its online advertising network, which automates the placing of ads alongside search results.

The company is trying to extend that success to other forms of media, saying last week that it would spend as much as $1.2 billion to acquire a company that uses software to broker radio airtime. Advertisers using DMarc Broadcasting Inc.'s tools can target their commercials to play alongside certain songs or to a specific audience, eliminating many of the middlemen that have made the traditional ad-buying system work.

Spot Runner takes a similar approach to TV.

"Typically, television has been just for the big brands," said Nick Grouf, chief executive of the Los Angeles company. Chains such as Domino's Pizza and Pizza Hut Inc. "use television as a brutal and blunt weapon. This is a way to level the playing field."

The company's launch comes at a time of great hand-wringing for broadcast TV executives over the future of their lifeblood: the 30-second commercial. In particular, the spread of personal digital video recorders has made ad-skipping easier.

Spot Runner's use of the Web to connect advertisers with TV airtime has led to speculation that it could become an acquisition target for Google, which is exploring ways to broker video ads online and on TV. A Spot Runner spokeswoman said the two firms had not discussed a partnership or takeover.

Spot Runner's founders, Grouf and David Waxman, have a track record of launching start-ups. They sold Firefly Network Inc. to Microsoft Corp. in 1998 and took PeoplePC Inc. public in 2000 before selling it to EarthLink Inc. in 2002. After testing its system for a year, Spot Runner launched this month with $10 million in start-up funding.

In exchange for carrying their channel, cable networks usually let local cable operators insert their ads into the national broadcast feed for a few minutes each hour. Such ads, filled by such local businesses as dentists, car dealers and restaurants, are expected to generate $6 billion in advertising revenue this year, on top of $20 billion in national cable ads, according to Universal McCann, an ad-buying firm.

"It's a sizable amount if you add up all the pieces around the U.S.," said Robert Coen, Universal McCann senior vice president and director of forecasting.

It generally costs less than $100 to buy spots on local cable, even during prime time on popular networks. But producing a decent TV ad can cost thousands of dollars, which is why so many look as if they're made on a shoestring budget.

That's where Spot Runner fits in. The agency has created an online library of thousands of professionally produced stock commercials that cost as little as $499 and can be paid for with a credit card. Small-business owners can customize the spot with their contact information, logo and a voice-over.

Pizza parlors in different regions may end up with similar-looking commercials, but Spot Runner says it won't sell the same spot to local competitors.

Ad buyers enter their objectives, budget and other factors, and the "planning engine" spits out a suggested media strategy: the channels, shows, time slots and even neighborhoods in which the commercial is likely to be most effective.

For now, the ad-inventory systems of most local cable providers aren't sophisticated enough to tap into directly, so Spot Runner typically handles the last stage the old-fashioned way: by phone or fax.

"I was kind of suspicious at first," said Greg Kunin, the co-founder of Ola Loa Products who used Spot Runner to advertise its vitamins in Los Angeles and is expanding into San Francisco. "I was overwhelmingly surprised at how easy it was. It's as simple as putting something on EBay."

The Lapidus & Lapidus commercials began airing in October on ESPN, Fox News, Court TV and other cable channels in Malibu and Beverly Hills.

It doesn't look like the stereotypical lawyer spot: It's filled with care-free images of people on sailboats diving into blue waters and ends with the tagline, "We handle your worries with big-firm strength, so you can worry less and enjoy life more."

Steve Hayden, vice chairman of advertising agency Ogilvy & Mather Worldwide, said he was considering using Spot Runner to allow franchisees of major national chains to buy local TV advertising at a discount.

"I think this promises a revolution in television advertising," he said.

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