In Memory of Steve Florio

Since attending the funeral service this morning at St. Ignatius Loyola church here in NYC, I cannot stop thinking of Steve.

Not that I knew him that well. A few business meetings, a weekend in Key Largo, maybe a few meals at the Four Seasons---but anyone who knew him at all will recall that it didn’t take long for Steve to make a big and lasting impression.

People are saying that he was “bigger than life” in many ways: his outgoing personality, his aggressive points of view, his competitiveness. But I think rather that he was as large as life, that he lived life as it should be lived, to the fullest. And I think this scared and scares a lot of people because many of us live our lives smaller than they could be, afraid perhaps to make those around us anxious or uncomfortable.

In business I think that Steve thought it was a major part of his role as a leader to make people around him uncomfortable with the status quo, to shake things up, to make us unwilling to settle for less than could be achieved.

Steve loved stories so here are a couple from my memory of Steve.

I remember a memorable night on Andy Berlin’s yacht, sitting on the top deck with Steve and his gang of usual suspects (Tom, Richard, Chuck, Ron) puffing on fine cigars and sipping fine cognacs under a cover of bright stars and listening to an endless series of tall tales and risque jokes for hours and hours. Steve’s energy kept us all at a high pitch whenever we were around him; what a blessing!

I also remember working with Ron and Tom on the launch of the BMW Z3 automobile, their first roadster in America. Our task was to pre-sell 9000 cars with a small budget. The solution: an ‘outsert’ to accompany certain Vogue subscriptions consisting of a tune-in ‘program’ for the VH1 Fashion Awards and a sponsorship of the awards. Steve and his folks introduced the BMW people to key contacts at stores such as Nieman Marcus and Nordstrom’s to get showcases for the car.

Not only did we sell out the entire year’s production run before a single car was available but we did it in a classy, high quality way and we had fun doing it. That was Steve’s genius: surrounding himself with great people, always being open to ideas and willing to mow down any obstacles that got in the way.

Rest in peace, Steve. Vaya con dios.

Network TV “CashBacks”Pull the Rug Out From Under Advertisers & Doom the Upfront

A new age of media discontinuity may be dawning as the television networks, in giving cash to advertisers in lieu of promised audience or ratings, have pulled the rug out from under the foundation of trust that underlies the selling and buying of TV ad time. In giving cash instead of advertising to buyers of ad time, the networks are taking back time sold at one price in the past and reselling it to higher paying advertisers today. It’s “bait and switch” without the switch; the marketer who needs the ad time to sell goods is left with a bag or cash and no ad support.

Pre-emptions of previously purchased ad positions have long been a bane and ethical conundrum for local spot television ad sellers. Neither the media buyer nor the advertiser has ever been able to count on local stations to honor their media sales contracts. The ‘custom of the country’ for local TV stations in the U.S. has simply been to sell each spot to the last highest priced offer, reselling the same spot over and over until the last, highest paying offer is executed in the form of a telecast.

In this process, each of the early buyers of the same ad unit for ever increasing amounts, is “pre-empted” by the seller and offered a replacement spot or makegood, often in an inferior time period. As a result, one of the most expensive components of spot buying is the scheduling and rescheduling of makegoods. However, even in this swamp of reneged promises and towers of paperwork, one has usually been able to count on some sort of ad schedule airing approximately during the desired time periods.

However, the new network cash-back formula makes it impossible to count on the seller to ever deliver the promised goods. Any time ad rates increase over time, a network can now pre-empt an early ad buyer for a higher-paying latecomer. This situation makes much of the discussion about the Writers’ strike’s possible effects on the Upfront moot. In the “Cash Back Age” there really is no basis for an upfront, which is after all supposed to be at core a guarantee of audience at some future date. Let the buyer beware. A new, more risky media age is dawning.

I predict that the next few months will represent the most tumultuous period ever in the history of television. It is time for our industry---media sellers, ad buyers and advertisers---to sit down and to address the need for a new and reliable basis for doing business in the future, nothing less than a new foundation for television advertising commerce.

Media Agency Profitability May Drive Media Selection

Media Buying Today

What Leads Media Agencies to Recommend the Various Major Media?

Although we are primarily a consulting company, we undertook to place about $50 million for an advertiser over the past 18 months or so (mid-2006 through 2007). We planned, negotiated and scheduled time and space in virtually all media: national and local television and radio, magazines, newspapers, out-of-home and the internet. We bought every imaginable unit and just about every time schedule possible, from broadcasts upfront, calendar upfront, scatter, opportunistic and “the night before” and “day of”.

Since I had not been directly involved in media buying for quite a few years, having functioned as an executive, manager and company salesperson, I thought it would be interesting to comment on my experiences and perception of the various media from a front row seat. My perspective is that of the manager of a media buying operation, particularly viewing media from the point of view of whether we can make media buys that are effective and efficient for our clients and profitable for us.

Ease of Buying characterizes national media

There’s nothing like broadcast network television for spending a lot of advertising money fast. The networks are set up to accommodate media buyers in every possible way; in fact, my experience was that they do virtually all of the work involving in buying network time. For example, they’ll provide historical ratings tracks, project ratings forward to telecast dates and then guarantee their projections. What’s left for the buyers to do? Very little as far as I could tell. Plus the network sales people are friendly, responsive and exude positive energy. It’s a pleasure to meet with them and work with them. I found we could manage effective and efficient network buying very profitably.

National magazines come in a close second in efficiency for the ad buyer. The extra challenge represented by magazines arises in planning print schedules, selecting specific publications from the huge array of print vehicles available. Added the to complexity of the selection process and dealing with a large number of sales people, with quite a bit of duplication from the big publishers, is the importance of securing the best ad position in each magazine. Unlike television, which still offers something akin to an “involuntary” ad exposure at least to non-DVR users (the preponderance of all viewers today and in the near future), individual magazine ads are often ‘seen’ by a minority of the readers of a magazine. This is because magazine audience is measured by someone’s ‘exposure’ to the magazine issue, not to specific ads or even an average readership score for all ads in a book. The bottom line: when buying ‘expensive’ magazines such as People and Parade, it is still pretty easy to handle print buying profitably for the media agency.

Local media may be unprofitable for media agencies

Local television and radio, OOH and newspapers are a disaster in terms of media agency profitability and operational efficiency. The spot sales system is fundamentally dishonest because the same ad time is sold over and over in a series of serial ‘pre-emptions’ that drop earlier buyers for buyers offering to pay more as the telecast date nears. Out-of-Home is site-specific and requires a great deal of time to find locations and verify postings. Achieving significant reach with newspapers requires the use of large numbers of individual publications, each with its own approach to pricing, positioning, contracting and scheduling of ads.

The Internet offers media agencies a special income opportunity because advertisers seem to be willing to pay internet-focused agencies on a completely different basis from media agencies. Moving advertisers into more and more internet-based advertising is therefore a highly profitable strategy for ad media holding companies.

Media agency profitability may drive media selection

The bottom line of my 18 months back in the media buying saddle: the networks and magazines should do just fine over the next few years because they make it very easy for media buyers to recommend them. The Internet should continue to outpace other media’s growth. And expensive to place local media need to find another way to get on media buyers’ screens; until then, their revenue will continue to be rerouted to easier to place media.

My first virus. Yechh!

So I was running through my email the other day and up popped what looked exactly like a Microsoft update screen including a EULA checkbox which I automatically checked and moved on.

A few seconds later I realized that Microsoft does not generally update in this manner and in any case no follow up screens resulted from my checking the box.

Uh oh. At that moment I began received a series of message: “Sonic Activation Module”, software I’ve never used. These messages refused to go away no matter how many times I tried to close them.

Then I noticed the PC slowing down and checked CPU usage; it was nearly 100% with no apparent programs running. I shut it down and looked in my Windows XP for dummies book which recommended a procedure to rectify this mess, as follows:

· Erase all restore points

1. Restart

2. Click Start, right-click on My Computer, and choose properties;

3. Click the System Restore tab and select the Turn Off System Restore check box;

4. Click Apply and the click OK

5. Restart

6. Update antivirus program with the latest definitions, scan and disinfect your entire computer

7. When the computer is disinfected, repeat Steps 1 through 4, except that in Step 2, uncheck Turn Off System Restore.

· Then create a new restore point for future use.

It worked! Wow, I may have a whole new career in IT. Not.

Web Sites Cast a Net Over Striking Writers - WSJ.com

Sara McBride, writing in today’s Wall Street Journal (“Web Sites Cast a Net Over Striking Writers” quotes Mydamnchannel.com CEO Rob Barnett: “When there is nothing but repeats (on television), people will go searching for alternatives.”

With broadcast ratings down 10-12% in the first few weeks of the new TV season, with all new programs, the networks need to rethink their situation concerning the writers or risk serious long term damage to the medium.

Cable networks and Fox built audience in the summers when the old broadcast networks were in reruns.

It's clear that today's younger viewers are fickle, fast and agile in their media habits. If the writers' strike causes more people to sample alternative fare such as online "webisodes", this can only serve to weaken an already increasingly ignored medium.

Will there be new TV networks via the web? You betcha. And I think there will be plenty of advertisers ready to support them, also encouraged by the obduracy of the networks.

The TV Writer's Strike

We're nearing a perfect media storm for advertisers as viewers melt away from television, an ongoing process accelerated by the strike of television writers. What this means for companies that need TV ad time to market their products: higher ad prices, fewer ad positions available and greater difficulty in reaching a broad spectrum of customers with TV sales messages.

For holiday marketers who have not yet completed their ad buys, this media maelstrom could be particularly crippling during a season that some companies count on for a majority of their annual sales.

What are these advertisers to do? Move quickly and decisively into other proven media such as radio and newspapers that offer low production costs and short lead times for ad scheduling. The radio and newspaper media are in an advertising recession right now and can offer advertisers attractive ad rates and a platform from which to move seasonal merchandise quickly.

Is the internet also an option for these TV-deficient advertisers? Of course, but high reach on the internet is very expensive now and often hard to come by. Radio and newspapers, on the other hand, offer an opportunity to reach half or more of America in a morning.

TV Ad Time “Selling Out” at High Scatter Pricing: What to do?

The costs of TV media buys is soaring. How can advertisers adjust their media strategies to maintain effectiveness and ROI?

In these occasional moments of high network ad demand and media pricing, we often see trade articles quoting advertisers and media buyers threatening to move some of their media dollars to other media.

In my experience, however, these words are rarely followed by action to make major shifts in media strategies.

This time may be different, however, because I don’t think this situation is likely to change in the near future and I doubt whether some advertisers will be able, even if willing, to maintain satisfactory ad schedules in TV.

So what is an advertiser who needs to buy TV ad time in the near future to do? I suggest

1. Analyze the geographic distribution of your sales patterns.
1. Local Spot TV in key markets, while more expensive on a CPM basis, may afford you heavier media levels than you can buy in network.
2. Local Spot Radio can offer similar leverage with very low production costs if you use ‘live read’ announcer copy. This can often be a good deal more credible than slickly produced ads. And radio has just as large an audience in the early morning hours as TV has in the evening.
2. If your product or service is of relatively high interest to your customers and prospects---I’m thinking of such business categories as automobiles, entertainment, travel, etc.---then you can use print media effectively because your readers will want to see what you have to offer.
3. Want the quick high reach that TV used to offer but can only deliver today with multizillion dollar budgets? Consider
1. Outdoor especially the new digital OOH venues that deliver a TV-like message to a specific location and audience
2. Sunday supplements like Parade, what they used to call ‘prime time print’ because they can reach a third of the country in a day.
4. Multiplatforming newspaper and/or magazines with their respective internet sites and brand-specific microsites along with sponsorship of relevant streaming video.

Digital Out-of-Home Media: Where to go to find availabilities?

This is the second guest post from Tom Eley of Eley Media Management, our favorite expert on out-of-home and place-based media. This post points the way to find out what's available in outdoor advertising today.

There are several organizations that can help you keep abreast of new players and developments:

• SRDS, www.srds.com, has a subscription-only buyer’s guide to Out of Home, and has many new companies listed;
• The Outdoor Advertising Association of America, www.oaaa.org, also lists many new companies on their membership roster and has other information on outdoor digital networks as well;
• Traffic Audit Bureau, www.tabonline.com. TAB is the audience measurement arm of the outdoor industry; and
• The Out-of-Home Video Advertising Bureau, www.ovab.org, was recently launched by ten of the major players in the digital OOH network business

You can reach Tom directly at teley@mindspring.com.

TV ON THE FLY: DIGITAL OOH TAKES OFF

This is the first of three guest postings from Tom Eley of Eley Media Management and describes the types of Digital OOH

Minority Report here we come! Digital signage now encompasses:

• Posters
• Bulletins
• Malls
• Airports

And pretty much any other high traffic location that OOH companies can plug in with:

• LED’s for the larger formats
• Plasmas or LCD’s for the smaller and closer formats

There are also some exciting new technologies like digital ink on the horizon from companies such as Magink: www.magink.com.

Many of these new screens are hooked up to wired or wireless networks that facilitate copy changes in seconds not weeks.

Indoor Networks

On one end of the spectrum are indoor tightly-targeted networks offering video formats and featuring non-advertising as well as advertising content. Examples of this include:

• The Hotel Network
• In Stadium network
• In airport Networks
• A variety of networks in hospitals and doctors offices
• All Over Media in gyms
• Ad Space in movie theatres and shopping malls
• Wal-mart’s In-store Network operated by PRN
• Captivate in elevators owned by Gannett
• Video at gas pumps backed by NBC
• etc. etc....

Two OOH Associations Have Different Roles

‘Having non-ad content is the differentiator for why a company joins our Trade Association versus the OAAA’, says Kim Norris, former cable executive and since April President of the new Out of Home Video Advertising Bureau, ‘Although that point of difference between us and larger format outdoor digital networks won’t last long. They will want to try content too at some point,’ she says.

Mass Digital OOH: Subway Entrances, Bus Shelters

In the middle of the spectrum is CBS Outdoor’s high resolution LED network of Urban Panels above subway entrances in New York City. These screens show full motion video with no sound and only show advertising content. CEMUSA is experimenting with LCD screens implanted in bus shelters as is Decaux with airport dioramas.

Digital Bulletins

On the other end of the spectrum are small networks of large outdoor bulletins converted to an LED format that are only allowed to show static images, due to traffic safety concerns.

At this time, they only show advertising content, but many of the outdoor companies have agreed to make them available to broadcast emergency information such as Amber Alerts.

In Minneapolis this summer when the bridge collapsed, within 10 minutes ClearChannel’s digital network alerted drivers to avoid the area.

Demand for advertising on these new super-bulletins is high and locations seem to sell out as soon as they are built.

TV on the fly? Digital OOH is taking off.

Next post: Where to go for availabilities and other information.

The post is the work of Tom Eley, President of Eley Media Management and is edited by Gene DeWitt. For more information contact Tom at teley@mindspring.com.

Tags: Digital Outdoor, OOH, Advertising, Media

NBCU CEO ZUCKER SAYS “FRIDAY NIGHT LIGHTS” TO CONTINUE, VOWS TO KEEP THE WALL STREET JOURNAL TO ITS CONTRACT WITH CNBC

At this morning’s Newhouse Communications breakfast, Jeff Zucker said that “Friday Night is quality television and we’re going to stick with it” citing the time it took the current hit show “The Office” to achieve high ratings and the growth of viewing to “30Rock” in its sophomore year.

In response to a question from interviewer Ken Auletta, Zucker also said “I think the New York Post Business Section is fantastic.”

Zucker is enmeshed in a very interesting “frenemy” relationship with Rupert Murdoch and Fox because

• NBC Universal and Fox have just launched an internet site to house key TV programs and other content from both networks and other sources; and
• CNBC has a continuing multiyear contract with the Wall Street Journal, recently acquired by Murdoch, that requires the WSJ’s television reporting to be done exclusively on CNBC. The rub is that Fox has just launched the Fox Business Channel in direct competition with CNBC.

In response to a question about NBCU’s recent acquisitions of the iVillage web business and the Oxygen cable television network, Mr. Zucker described a plan for a multiplatform media entity that would span network broadcast, cable and online venues. This entity will include iVillage, Oxygen, Bravo and The Today Show and will provide advertisers with a one-stop shopping enterprise for targeting women.

Mr. Zucker also said that “We live in a blogosphere world” in which “everyone is a journalist.” Hard to disagree.

Newspapers Are Still A Dominant Medium Among Affluent Boomers

Predicting the future of newspapers is interesting but not particularly relevant to marketers today who are accountable for results tomorrow vs. some distant point in time. And, for now, newspapers are an extremely potent media vehicle for reaching intelligent, affluent adults---people who represent a prime and major market for many many products. We recently did a study of the media habits of upscale boomers defined as 'Adults 45-64 with $100,000 plus household incomes and found that these folks are very heavy newspaper readers and very light TV viewers. There are some very intelligent people buying newspaper companies today and my conviction is that they will adapt over the years to more fully exploit the strong connection newspapers have with their readers.

THE END OF MEDIA CLOUT

Consolidation of media buying at huge mega-media agencies has erased clout because no media seller can afford to offer one of these behemoths a lower rate. Discounting to a WPP agency, for example, means lowering rates for over 20% of all media billings; no media seller can afford to do that. Moreover, since media buyers change jobs very often, no discount could be kept from other media agencies. As for keeping creative and media together, the original rational for unbundling was to get media people out from the back of the full service agency 'bus'. The reason broad market creative and media won't be rebundled, however, is that all of these holding company siloes have new ways of charging advertisers additional and very profitable fees.

On the other hand, smaller media agencies can make confidential deals with the media that the sellers don't have to share with dozens of other advertisers and agencies. So, the fact is that if media negotiating clout can exist at all today, it's likely to be found in the smaller, more agile players.

Google’s Newspaper Ad Sales Venture

May be able to deliver a lot of potential eyeballs for very low costs.

Some pretty impressive newspapers are participating in this auction bid system for space including The New York Times, The Chicago Tribune, The Los Angeles Times and the Washington Post.

Procedure is to make an offer for desired space specifying size of ad, position desired, date of insertion, bid price, etc. If a paper accepts the offer the ad runs, if not not.

Observations:

• For many marketers the uncertainty of the ad running is a deal breaker.
• However, for direct response purveyors this represents a heck of an opportunity to ‘game’ newspapers for very low insertion costs.

Recommendation: Regular newspaper advertisers who are permitted* to use the Google print system can easily test this program to determine the lowest possible rates for each newspaper on their schedule and then use this information to negotiate lower costs directly to ensure that ads run as desired.

*Note: It is my understanding that some very large traditional newspaper advertisers such as retail department stores are not permitted to use this system. One wonders how this works and who is on this list.

Google’s TV Ad Selling Venture

There’s may be less here than meets the eye.

Description of Offering

• Remnant space on Echostar satellite’s 13 million homes.
• No information available on locations of Echostar subscribers.
• Ad units are inserted into positions reserved for local cable outlets so this is only cable.
• An auction system in which buyers offer bids for time which runs only if the bids are accepted.
• Audience data via satellite tuners is offered at no charge and is likely very accurate on a household viewing basis; i.e., no demographics.

Observation: Undifferentiated household viewing in a polyglot 13 million households (12% of all US TV HH) may be of value to some direct response advertisers who just want the lowest cost per unit of audience. Of limited perceived value to advertisers who want to know where and to whom their messages are delivered.

Recommendation: Pass on this until universe expands and there is more information on audiences.

Major Media Update: What's Up?

This is the first post in a planned series of commentary about the current state of the major advertising media. I welcome your comments and suggestions.

NETWORK TV: WHERE’S THE BEEF?

In an era when lower grade choice beef is often sold as prime, are we paying premium prices for a lower grade of television advertising time?

Primetime has often been regarded as a gold standard for media effectiveness because it combined the phenomenal selling power of the television medium with high ratings and viewer involvement providing advertisers with an opportunity to reach very large audiences quickly.

A 2.0 rating is primetime?

However, average primetime adult ratings have fallen to their lowest levels in history. For example, according to Nielsen, regular primetime programming during the week of September 17-23, 2007 delivered less than a 2.0 average adult 25-49 rating:

Demo	Ratings
Women 25-54	2.10
Men 25-54	1.70
Adults 25-54	1.90
Source: Nielsen Television Index September 17-23, 2007

Since a rating point represents one per cent of the audience, this means that more than 98% of viewers DID NOT see the average program. That’s prime?

Top dollar for lower ratings

In spite of these very low audiences, primetime network television still commands the highest advertising prices. The following table shows what one rating point (representing one per cent of Adults 25-49) is reputed to have cost advertisers this fall in a variety of TV dayparts:

Dayparts	Cost/Rating Point
Early Morning	$25,502
Evening News	$22,379
Prime	$36,612
Late Night	$32,644
Source: SQAD 4Q07 Scatter Adults 25-54

Based on the above CPP and ratings figures, one 1.9 rated primetime :30 should cost in the neighborhood of $70,000.

On the other hand, reinvesting that $70,000 into early evening news programming would generate 3.1 ratings, a 63% increase in audience.

Sure, the early evening news programming will skew older but that’s a bonus since we’re only counting Adults 25-54 in the above example.

So, where’s primetime and why are advertisers paying a premium for a lower grade of beef?

Tomorrow we’ll take a look at who’s in control of network advertising, the sellers, buyers or advertisers and the implications of these observations for advertisers.

Media Merge

The Combination of Newspapers, Magazines, Internet and Streaming Video is Creating a Powerful “New” Medium

One of the great aspects of print is that it puts something in people hands, something they’ve expressed great interest in by paying for it. As a result, each magazine and newspaper’s audience represents a community of shared interests. Therefore, by definition, the print audience is engaged with its media.

However, a possible weakness of print communications relative to broadcast has been the relatively long intervals between reader exposures to the medium. Rather than permitting a constant stream of messages as do radio and television, the magazine exposure interval in particular can be weeks or months even allowing for repeated readings.

The internet now empowers magazines and newspapers to communicate with audiences in real time, continuously and with constant interactivity and feedback. I just logged into Time.com, noted an article about breast cancer and emailed it to my wife. Before I could log out, Time’s website lured me to another health-related article. This is engagement and added value of the highest order.

A Most Formidable New Medium: Magazines & Newspapers

What I like about print media is that they put something in their audience’s hands, they touch their consumers.

I also like the fact that for the most part print audiences pay for their media, which is as clear a demonstration of true interest that one can have.

Increasingly I am also admiring the way some publications are integrating the internet into their content delivery mode, creating a hybrid, morphed medium composed of print readers accessing web content and new users via the web.

So, are magazines and newspapers old, ‘dying’ media as some pundits would have us believe? Or are they in the vanguard of the ultimate expression of current media trends, building on their strong print audience relationships to extend their communications platforms into new touch points with a wider audience?

I think the latter and as publishers figure out that they need to promote viewing of their increasing video content via some form of tune-in advertising, they will constitute a formidable new media force.

Summary Checklist for Evaluating Upfront Buy Proposals

1. Are rating goals met in each daypart?
2. Are variations vs. goals a result of buyer agility in response to changing market conditions or did the buyer just pay more than was budgeted to get to goals?
3. What ratings currency was used and why?

a. Commercial ratings

b. DVR: “Live Plus What”

i. Have DVR ‘viewers’ been discounted for zapping?

ii. Why not live only?

4. How does the pricing of the buy compare to industry averages and historical (e.g., year ago) buys?

a. Are comparisons done separately for broadcast and cable? They should be.

b. Are comparison done for each daypart? They should be.

c. Do comparisons take into account differences in the message length mix (i.e., per cent of ratings in :30’s vs. :15’s)? They should.

5. Programming

a. What proportion of ratings are in high-rated shows? Average-rated? Low-rated?

b. What proportion of ratings are in proven returning shows vs. new programs?

c. Are recommended programs complementary to the target’s lifestyle and the ad message?

d. Were engagement metrics used to prioritize program selection?

6. Platform extensions

a. Are there digital and/or emerging media extensions of the buys?

b. Is there research built into the buys to track performance beyond simple audience measurement?

The toughest upfront ever?A perfect storm for media buyers?

Caveat Emptor!


Let me count the ways that the 2007-08 upfront national television media buying marketplace may be the most challenging in the last thirty years:
1. Declining network ratings have depressed the supply of audience available to sell to advertisers
2. Strong demand for national TV ad time following several quarters of strong scatter sales
3. Inflationary trends in the general economy with both advertisers and the networks discovering pricing power that has been unseen for quite some time
4. The ‘currency’ in which ad time is measured is in question on two fronts:
a. The networks must include delayed viewing via DVR’s in the ratings they sell or face a dramatic and unacceptable further decline in their advertising ‘inventory’
b. A confusing surrogate for commercial ratings is being offered by Nielsen for the first time this year and there’s definitely less here than meets the eye
5. There is a tremendous ratings gap between the few highly rated hit shows and the great majority of programs that deliver ratings that are simply not prime no matter when they air
6. The disappearance of negotiating ‘clout’ as the consolidation of mega advertisers and mega media buyers makes it impossible to walk away from the networks’ offerings
7. The industry’s fascination with ‘new’ media which to a very large extent are simply new platforms for existing TV content but which command much higher ad prices than their audiences would seem to merit

What to do? Prepare carefully for the upfront. Incorporate a certain amount of agility and flexibility in your buying strategies so that if faced with excessive pricing in one area the buyers can hold back dollars or move to other dayparts rather than falling on the sword of network inflation. Remember that there are always alternatives to the traditional upfront---quarterly scatter, last minute opportunistic, calendar upfronts---and to broadcast network television---cable, syndication, streaming video, spot television, unwired networks---and to television in general. The bottom line: explore all of your options thoroughly before making large, long-term commitments in the upfront. Have a “Plan B” in your pocket in case your initial strategies hit a wall. Caveat emptor.

Upfront Buying Checklist/Before the Buy

UPFRONT CHECKLIST

Ten Things to Think About While Formulating Upfront Buy Strategy

1. How much to allocate to the various markets and why?
1. Broadcast Upfront
2. Quarterly Scatter
3. Opportunistic
4. Calendar Upfront
2. How much to allocate to broadcast vs. cable and why?
3. Pricing: What are the budgeted costs per rating point and why?
4. Response options if costs are higher than expected?
5. Programming triage; i.e., what is the acceptable distribution of the buy among:
1. High-rated, average-rated and low-rated programming
2. Original vs. repeat programming
3. New shows, returning shows in the same time period, returning shows in new time periods
6. How does each network’s CPM guarantee compare with the buyer’s estimates of actual audience delivery for each proposal? Have the network and buyer built a excess of probable makegoods into their plans?
7. Are any of the DVR rating measures acceptable for inclusion in the buy or only ‘live’ ratings?
8. Are digital extensions such as streaming video to be sought and, if so, in what way will they be evaluated?
9. How should Nielsen’s new commercial ratings figures be incorporated into the buys if at all?
10. Is there a strategy for negotiating commercial position within pods; e.g., first/last commercial in a pod?

Gene DeWitt

CEO

DEWITT MEDIA STRATEGIES LLC

May 11, 2007

Oopsle! Has Google Goofled?

The Viacom Suit:

Has Googled Goofled?

I had to giggle when I saw the Viacom lawsuit against Google for using their content without permission. Google says they remove unlicensed content as soon as the copyright holder asks them to. To me, that’s like an arsonist blowing out his match when he hears the fire engines coming.

As the world’s foremost search engine, it cannot be difficult for Google to know exactly when copyrighted material is uploaded to YouTube. However, it’s clear that this content generates a lot of traffic to Google/YouTube and they want to exploit this situation as long as they can.

If legislation permits this negative option loophole, it should be revised to protect content owners from this clearly illegal use of their material. And if Google truly wishes to do business with the networks and Hollywood producers in the future, then they need to get this right ethically whatever the letter of the law. Theft is theft.

So come on Google, pay for Viacom and the other content producer’s content. They’re worth it. And you can afford it.

Bidding for Ad Dollars

Bidding for Ad Dollars
A New Media Buying & Selling Paradigm?

By Gene DeWitt,
Chairman, DEWITT MEDIA STRATEGIES LLC


Media buyers traditionally have asked the media for availabilities in the form of proposals and then negotiated with the sellers for the best configuration of ad positions, pricing and other ‘added value’ elements. In this approach, the buyers function as supplicants, with a great deal of control over pricing and proposal elements in the hands of the media. One result has been the development of a kind of secret media marketplace in which only the seller knows for sure what the lowest possible cost is for a given media schedule. This is clearly not to the benefit of advertisers although it works to shield media buyers from a definitive documentation of their negotiating achievements.

It’s been kind of a sport over the years to watch as media buyers obfuscate this absence of accountability by redirecting advertiser attention to the insignificant detail du jour, whether it is the possibility that miniscule DVR penetration and usage will undermine advertising effectiveness or whether completely useless Nielsen disinformation about commercial ratings should be taken into account in media buys. The bottom line, however, is that this media emperor is naked.

I’ve recently been kicking around an old idea that we used in spot buying years ago. Here’s how it worked then. We’d tell the local stations in a market that we had a budget for the following week and that we’d award it, all of it, to the one station that offered us and our client the best media schedule. Simple and clear directions to the stations kept the playing field even and minimized wheelspinning. One result: we could put the stations’ proposals side by side and see costs declining and quality of schedules increasing, over a period of weeks, as each station vied to ‘win’ each week’s buy.

We dusted this idea off a few months ago and implemented in a few local markets. Here’s what we saw in terms of costs per rating point after seven weeks of buying:

Index of costs/rating point by week
Week 1: 100
Week 2: 87
Week 3: 79
Week 4: 71
Week 5: 67
Week 6: 65
Week 7: 66

A reduction in cost of about 35% seems to represent the pricing bottom, at least in this market.

By the way, the planning cost benchmark for this market was approximately 20% above the first week’s cost so the actual performance vs. benchmark is nearer to half the planning cost.

One concern about this strategy might be the concentration of all weight on one station, particularly if the same station ‘won’ the buy week after week. That hasn’t happened as the sales people at each outlet work even harder to get schedules as each week passes. And, since viewers watch programs not stations, there is little likelihood that ad reach will suffer over time.

Another issue may be whether it is necessary to buy in this manner over an extended period of time if the bottom rates are determined so quickly. It’s too early to tell but what we’ve been working on is increasing the quality of the buy while keeping rates down. One recent result was an exclusively primetime schedule in several of the highest-rated programs on television.

We all know the saying about old dogs and new tricks. Perhaps it’s worth wondering if the new dogs need to re-examine some old tricks.

If TV is dying, why are people buying large screenTV's?

If television is dying, why are people
• Watching and interacting with programs like American Idol?
• Buying large screen sets as though they were donuts?
• Paying triple digit cable subscription rates?
• Buying DVD’s of entire season episodes for top shows?
• Paying big bucks for rights to transmit TV shows the Internet and Mobile phones?
• Still having Super Bowl and Academy Award parties?
• DVR’ing shows so they don’t miss them?
• So interested in what the Donald, Rosie and Barbara Wawa have to say?
• Add your own thoughts:

Monetizing Media Audiences

How to Make Money from Advertising



Advertising is how we move customers and prospects along the purchase spectrum, from no awareness of our product or service to awareness, preference, intent to purchase, purchase and repurchase.

1. The key to media selling and buying is audience. Without it, advertising is the sound of one hand clapping.

Start your ad sales planning (and pitch) with audience. Who is your audience, how is it measured, what are their characteristics, where do they live, etc. The more you can tell advertisers and media buyers about your audience, in a documentable manner (i.e., measured by a trusted source such as Nielsen), the more likely you are to succeed in the monetization of that audience.

2. Next is the likelihood of the ad being seen and possibly acted upon. This can be measured and dimensioned by such ‘soft’ measures as ‘engagement’ (attentiveness, involvement) or hard measures such as recall.

Most advertising sales are of potential ‘impressions’ or ‘opportunities to see’ rather than proved actual exposures. The closer you can come to being able to ensure an actual and documentable ad exposure, the more valuable the media position.

One extreme in this consideration spectrum is a controlled circulation magazine that is sent free to an audience. This sort of publication must be able to prove real readership or risk being completely discounted by intelligent media buyers.

Another extreme is an ad feature is a live update in a sports event such as an auto race or football game that is highly likely to be viewed by the involved viewing enthusiast.

3. The price of the audience, usually dimensioned in cost per thousand or cost per target rating point, is the next key variable in media buying and selling. The right ad rate for a given media property is determined by a reasonably open marketplace in which media buyers and advertisers can weigh your media offerings vs. others they consider comparable.

All other things being equal, two NFL Football games or two highly rated primetime original TV programs telecast in the same time periods on different TV networks are likely to earn the same ad rates.
But ‘all other things’ are rarely equal in the real world. And many media offerings must compete for consideration with ad positions in completely different media; e.g., internet streaming video vs. network television. In this specific case, my point of view is that an intelligent media buyer and/or advertiser would equate these two offerings because they’re both television, just delivered by different distribution methods.

On the other hand, the buyer would weigh the relative audience size, likely to be higher for the network show; the relative attentiveness, likely to be higher for a TIVO-proof mid-roll in a net video of the same program. It would also be important to define the audiences clearly in terms of desirable characteristics such as age, gender, income, education, purchasing behavior, etc. Even the probable size of the screen would be a factor to consider.

The point is that when all things are not equal, tradeoffs are defined and given relative values in the media consideration process.

4. The program environment is, in my view, the last consideration since if we have an attentive audience that we want to reach and the ad position is well priced, we’ve got what we are aiming for, an effective platform for our ad. What the program environment can add to this is an association ‘rub-off’ for the advertiser and ad. This could be in the form of image, such as an ad in The Kennedy Center Honors or in the MTV Video Awards (depending on the advertiser) or relevance, as an ad in The Academy Awards for a movie or a cosmetic.

The bottom line of ad selling and buying, therefore, is composed of four elements:
1. The audience
2. The quality of the ad exposure
3. The price in terms of delivering audience/exposures for less than comparable media offerings
4. The ad environment as characterized by the programming around the ad and/or the media vehicle itself.

My First Time

As an assistant media planner at Ogilvy & Mather in 1966, I was assigned to develop a media plan for Milky Way candy bars. First problem: I’d never written a media plan before. In my first fifteen months in the business, I’d trained in media research and bought Spot TV. Think outside the box; I didn’t even know there was a box.

But O&M at the time was a very friendly place (about $60 million in billings in one office at 49th Street & Fifth Avenue) so I wandered around and picked up some information:

1. Milky Way sales were trending down
2. Corner groceries were being replaced by the new supermarkets
3. Single bar sales at candy stores were declining while multi-packs at supermarkets were growing
4. Hardly anyone bought chocolate bars in the summer because they melted
5. Most candy advertising was directed at children

One other bit of information based on my own personal experience: frozen Milky Way bars were really good.

I put this all together and presented a plan to the account group that included:
1. A recommendation for a summer promotion based on packing six or so Milky Way bars in a free ice cube tray
2. Daytime television during the summer when we could reach kids and their Moms (and virtually no other candies were advertising)

Months later I saw a sales chart that showed a multiyear negative sales trend reversing slightly in the previous summer.

A little ignorance is a wonderful thing.

P.S. O&M gave me six weeks to do this media plan. This was a lot of time even if we did not have electronic calculators, copy machines, faxes, fedex or cellphones much less computers… What a great place to work.