Diamond deal puts brighter shine on Internet ad company: Spot Runner signs contract for promotion of gems.

A unique cable ad sales formula may be quite successful regionally, but diamonds are Spot Runner's best friends.

The L.A.-based Internet firm has signed a deal with Diamond Promotional Service so it can use the $33 billion retail diamond market as the linchpin for a national campaign. Spot Runner will work with jewelry retailers and manufacturers to provide TV commercial production, media planning and media buying services.

Spot Runner, through its massive online ad template, enables advertisers--particularly smaller businesses--to produce their own cable TV ads cheaply. That means Spot Runner will be able to customize ads on a national basis for both the local mom-and-pop jeweler as well as the major diamond distributors like De Beers Corp.

The ads, which can cost as little as $1,500 to create and air, will run on such networks as Bravo, A&E, CNN, ESPN, Travel Channel, Oxygen, HGTV and the Learning Channel.

"We're still very excited about the work we do for small businesses, but we're also finding there are ways that Spot Runner can be used by large multinational brands as well," said Spot Runner co-founder Nick Grouf.

Diamond Promotional Service executives are hoping Spot Runner can complement their earlier "A Diamond is Forever" marketing initiative.

"Spot Runner breaks down barriers by providing jewelry retailers with a simple and affordable turnkey tool to implement a highly effective local TV advertising campaign," said Cristina Lilly, Program Director for Diamond Promotional Service.

Part of the impetus to expand nationally is coming from the U.K.'s WPP Group PLC, which last month bought a 3 percent stake in Spot Runner. WPP, the world's second largest advertising and marketing group, said that Spot Runner buy was part of a push to capitalize on the fastest-growing segments of the digital ad sector. It noted that Spot Runner had gross assets of $10 million U.S. at the time of the purchase.

Through that alliance, Spot Runner partnered with the JWT ad agency, which is owned by WPP, in a deal enabling it to market global brands across the U.S. A separate alliance with Cendant Real Estate Services will enable Spot Runner to create cable TV advertising for more than 9,000 real estate brokerage offices and 260,000 sales associates, including such clients as Century 21 Real Estate LLC, Coldwell Banker Real Estate Corp. and ERA Franchise Systems Inc.

Additionally, Spot Runner's Franchise Advertising Program was created in October to give franchisees of every size affordable access to TV ads to air on premium national networks. In the program, Spot Runner creates a library of ad templates that can be customized by franchisees with their own information, content and images to highlight their company. It costs $499 to create any ad with a minimal price upgrade for specific additions. At that point, the companies can target various cable stations throughout the U.S. for as much as $431 on the House and Garden network in Brooklyn, N.Y, for example, to as little as $7 for a 30-second spot on the same House and Garden slot in Evanston, Ill.

Not everyone is sold on the Spot Runner concept, particularly ad industry rivals who have problems with the boilerplate approach to advertising.

"They take every cliche of every category and put stock photography on them," said BBDO Creative Director Scott Kaplan, after reviewing some of Spot Runner for online media analyst firm fastcompany.com.

"This is the kind of idea likely to appeal to a fairly small, unsophisticated business," says Bennett Griffin of Griffin Media Research, which creates custom reports to help TV ad-sales teams. "It looks very official, but you'll get sounder advice talking to a rep from your local cable company."

You won't convince Mitch Stein, who sells flowers and gifts both online and through Devynns stores in Covina and Pomona. He said he initially invested $3,000 with Spot Runner, which not only paid for the production of the company's ad, but also bought 326 spots spread out on A&E, Food Network, Lifetime, Oxygen, HGTV and VH1.

"The reason we went to Spot Runner was that we had already done a pretty good job of getting customers nationally online, but we wanted to get local customers," Stein said. "We had these two flower shops and we weren't getting a lot of traffic."

Stein said the ads yielded about $95,000 in flower sales between the two stores, which was nearly a 20 percent increase from a year earlier.

Lisa Sparrow's Thedbaplace.com is also taking out a series of ads on local cable. Sparrow offers accounting and filing services for many start-up companies that need to register with the county.

She said the targeting ad capabilities of Spot Runner can get the word out to sports enthusiasts watching ESPN or news junkies zoning in on CNN.

"Spot Runner creates a template for the advertiser to use," Sparrow said. "I can just tack the name of my company onto the end of the ad and voila, I have a 30-second spot on CNN."

Spot Runner's Grouf says small businesses will remain his firm's bread and butter.

"All of them are looking for more effective ways to target their message to clients and customers," Grouf said. "Spot Runner makes it easy and affordable for small businesses to reach their customers through TV."

"To be candid, this is very similar to the way Google operates. We're focused on the TV part of that," Grouf said. "Google launched a product called AdWords, which automates the process of buying online advertising. Now, AdWords represents about $7 billion of online Google advertising."

By DAN COX

Staff Reporter