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.
May 11, 2007
Upfront Buying Checklist/Before the Buy
UPFRONT CHECKLIST
Ten Things to Think About While Formulating Upfront Buy Strategy
- How much to allocate to the various markets and why?
- Broadcast Upfront
- Quarterly Scatter
- Opportunistic
- Calendar Upfront
- How much to allocate to broadcast vs. cable and why?
- Pricing: What are the budgeted costs per rating point and why?
- Response options if costs are higher than expected?
- Programming triage; i.e., what is the acceptable distribution of the buy among:
- High-rated, average-rated and low-rated programming
- Original vs. repeat programming
- New shows, returning shows in the same time period, returning shows in new time periods
- 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?
- Are any of the DVR rating measures acceptable for inclusion in the buy or only ‘live’ ratings?
- Are digital extensions such as streaming video to be sought and, if so, in what way will they be evaluated?
- How should Nielsen’s new commercial ratings figures be incorporated into the buys if at all?
- 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
March 14, 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
So come on Google, pay for Viacom and the other content producer’s content. They’re worth it. And you can afford it.
March 7, 2007
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.
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.
January 11, 2007
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:
• 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.
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.
January 8, 2007
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.
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.
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