Special Report SNTA Roundtable: Syndication Ready for the New Media Market

May 1, 2006  •  Post A Comment

Syndication advertising sales executives are bullish on their prospects in the next upfront. Though the television ad market may not be growing, they believe the high ratings of their proven programming will wrest dollars away from both broadcast television and cable.

Buyers tend to focus on broadcast and then cable. Executives participating in TelevisionWeek‘s inaugural pre-upfront syndication panel said the shorter commercial breaks in their programming offer ad buyers a better return on investment.

The four members of the Syndicated Network Television Association who took part in the April 21 roundtable are Marc Hirsch, president of Paramount Advertiser Services; Warner Bros. Domestic Television Distribution Executive VP of Media Sales Michael Teicher; Barbara (“Bo”) Argentino, senior VP of advertiser and media sales for NBC Universal Television Distribution; and Bob Cesa, executive VP of advertising sales for Twentieth Television and DirecTV. This upfront, Mr. Cesa will also be in charge of selling ads on Fox Broadcasting’s new MyNetworkTV.

The following is an edited transcript of the roundtable, which was moderated by TelevisionWeek Senior Editor Jon Lafayette.

TelevisionWeek: The first question is to see whether you have had a chance to get a read on what kind of budgets are going to be coming in from the agencies, from the clients and to what degree the share of those budgets that are earmarked for syndication might change?

Mr. Hirsch: The sense that I have in general-this isn’t talking to network people, it’s just generally-seems to be that budgets are similar to a year ago. Clients, network people seem to be saying they think there’s a similarity. That being the case, I think what we like to see in syndication is that our share is going to be larger than it was a year ago. I think that there’s almost a wall that’s been hit in cable as cable continues to not grow. So the general sense that I have is budgets will be similar and the syndication share of budgets will be up somewhat.

Mr. Cesa: I would agree with Marc. That’s essentially what I’m hearing as well. …The economy is in good shape and the consumer continues to spend-there’s low unemployment. You know, the picture still bodes well for advertisers. If you’re going to invest to sell product through advertising, now’s the time to do it-while the money’s there.

Mr. Hirsch: I don’t think we can look away from the fact that advertisers are still putting more money into the Internet and looking at alternatives to what used to be called “normal” television. But even considering that, I think what Bob just said is going to hold true: That the extra money, the advertising money that’s growing [is] still enough to jump back into normal television and again, hopefully, a larger share for us.

TVWeek: Is there a specific argument that you guys can make to say syndication deserves more money?

Mr. Teicher: I think the story is actually pretty good when you hear clients claim that their No. 1 concern is the amount of clutter that’s out there.

That’s a clear advantage for a lot of our programming, because our commercial times are shorter on average, across the board, across cable and broadcast-particularly in broadcast prime. If that’s an issue that clients are paying very close attention to, we think that’s an absolutely terrific story for us, because of the obvious implications on audience retention through shorter commercial breaks.

TVWeek: Is anybody altering the formats of any of their shows to either keep down the clutter or actually reduce it this season?

Mr. Hirsch: I don’t think we need to. … Whether it’s the broadcast networks or the cable networks, they have clutter issues that our clients have been and are becoming more concerned about. By the very nature of the way most syndicated programs are formatted-because we split a lot more of our inventory with local stations-our national-only pods tend to be significantly shorter. Therefore, you get many … A and B positions. And some of our pods only have A and B positions.

As a result of that, and what the studies have shown, is that fewer commercials and the more A and B positions you could have, the greater the retention rate, the recall rate, both aided and unaided. Most of our programs have no need to change the format. The format is the format that advertisers should be liking a lot.

TVWeek: What are the ratings and demographic trends that are affecting syndication right now? What kind of audiences are you attracting?

Ms. Argentino: I think that in my particular case, our rating performance is solid-our daytime shows continue to deliver solid ratings. We have a new show in “Megan Mullally,” which, hopefully, looks like it’s gonna be a hit, and “Access Hollywood.” The prime access daypart is up versus a year ago across homes and also across key demos-all the adult demos as well as women. I think that’s probably true for a number of shows in syndication as well.

Mr. Cesa: From a macro view, if you look at all of our programs, we have a very consistent delivery across all four quarters. The networks have outperformed significantly when they run originals, and when they had to do repeats the numbers dropped off significantly. So we have a very good story here for an advertisement.

In addition to that, we have a tremendous amount of first-run programming that is 52 weeks a year. And you know, in the case of like an “Entertainment Tonight,” which Marc sells, you have original programming every night. So those are very valuable things to advertisers because they attract viewers.

In addition to that, all of us have young-skewing off-net sitcoms that, quite frankly, you know you can’t find on network television like you used to years ago. [The off-network shows] do very, very good numbers right across the board, [and] in some cases would rank in the top 10 of delivery on adults 18 to 49 and even more so if you got to the younger demographics. Those are very powerful marketing tools that run five and six days a week.

Mr. Teicher: I can certainly speak on behalf of Warner Bros., but I think it’s probably true across the board: One of the things that I think our industry is doing better than they ever have before is really concentrating our efforts on producing and marketing our best stuff.

That may mean off-net, but often and most likely means our first-run programming. So for example, we have put a lot of time, energy and money re-promoting “Ellen” and her ratings are up this year. We had a good successful first year with “Tyra Banks.” My colleagues really across the board … really seem to be driving the message with consumers and the trades among our best programs. I think we’re bearing the fruits of that by seeing our ratings go up in an environment where, typically, after all these years, things might go down. So we’re bucking the trend in a number of places.

TVWeek: What about the broader television landscape? We’ve got the folding of The WB and the creation of The CW and … MyNetworkTV. How is the change in the network architecture going to affect how much there is for syndication and how that plays out?

Ms. Argentino: I think there may be an opportunity with The CW. … I mean, I don’t think it ended up changing the marketplace as significantly coming out of [the National Association of Television Program Executives conference] as we had thought, but it’s a little early to tell. I think it might provide an opportunity for the buyers who are looking at active syndication along with some of those properties.

Mr. Teicher: The combination of The WB and UPN will create a scenario where there will be some dollars probably that shake loose. I don’t think it’ll be monumental dollars. … I think it’s an opportunity for young-skewing sitcoms, across all the distributors, to maybe pick
up a few dollars.

Mr. Cesa: I’m putting on my syndication hat right now. MyNetworkTV will have fewer avails [less ad inventory] than UPN or WB had. So just on the number of avails there should be some money up for grabs. Syndication is one of the stops where I think advertisers will go first if they choose to move their money out of network, because of the fact that we have … national broadcast, 95 [percent] up to 99 percent coverage on the highly rated shows. So we become a great alternative for them going forward.

Mr. Hirsch: Until very recently a lot of the budgets that UPN and WB got were really almost … I’m not gonna call them syndication budgets, but they were kind of a middle ground. For some advertisers they kind of looked at it as something almost in between real networks and syndication.

I think that as that money goes away, you have one network instead of two. And while you do have MyNetwork out there in limited advertising, there is definitely money around that until recently people have looked at as money which had been geared toward syndication to a degree.

I think we stand in a very good place. Especially given some of the younger-skewing programs, syndication has to take some of that money from the general marketplace.

Mr. Cesa: Particularly for African American viewers as well, right?

Mr. Hirsch: Absolutely. … I don’t know what The CW lineup is going to be, but certainly there’s an opportunity for a lot of us to convince advertisers-I think intelligently and correctly-that some of that money which isn’t going to go to those entities should really be coming to us.

Ms. Argentino: Right, I mean that’s going to tighten up the market a little bit. As Marc said, it kind of provides an opportunity for the buyers to look at our programs as an alternative, as opposed to before when it was more of a clear definition between network and syndication. I think now they have an opportunity to include some of our programming in that part of the mix.

TVWeek: There are a lot of advertisers and agencies doing mostly a lot of talk about accountability. What are syndicators able to do in terms of letting clients know what kind of return on investment they’re getting when they advertise in syndication?

Mr. Teicher: Well, without divulging any of my company’s secrets, we are addressing ROI in a number of ways through some proprietary research we are doing. But more publicly … [we] are following up by taking a look at those that demonstrate that our audience retention through our breaks is significantly better than our competitors outside of syndication because of our shorter pods and our A and B positions.

So we’ve taken a look, to provide some data on a minute-by-minute level, and agencies and clients seem to be responding to this as well. In addition, we’ve taken a look at some behavioral and attitudinal studies that our viewers portray in aligning those with our shows to demonstrate that the advertiser is really getting or really reaching their targeted audience. … I guess I’m the only one doing it.

Mr. Hirsch: All of us, I’m sure, are doing something along those lines on our own. But the tools available to do it are extremely limited and it’s really a matter of sitting down with advertisers on an individual basis and almost customizing a platform that’s going to make everyone comfortable. I suspect we’re all looking at that to some degree.

TVWeek: Are you all getting the minute-by-minute data and doing that sort of analysis? At any point soon is that going to become a currency for checking out whether or not spots are actually being viewed?

Mr. Hirsch: I think that’s really, as so many things happen in this industry, it’s really the broadcast networks that are going to need to take the lead in that. We have yet to be asked by an advertiser to provide it. The broadcast networks don’t seem to be doing it yet, and until they do it, it’s just not something that’s going to happen.

We all know that measurements take place in Europe in different ways than they take place here. And on one hand you can argue for just about everything you want, but someone needs to pay for it, and the networks pick up a huge brunt of the Nielsen cost. To get the kind of things that in some instances agencies seem to want is gonna raise that bill significantly. And I think until people agree who’s going to wind up paying for those extra data, it’s gonna be a while.

TVWeek: Another thing that advertisers seem to be very attracted to these days are a lot of these new media opportunities, whether it’s broadband or video-on-demand or other forms of digital media. What are you doing to meet that demand? Are there opportunities there for your advertisers to go multiplatform?

Ms. Argentino: You know, most of us are part of a larger company that has multiple platforms. We work across those wherever it’s appropriate, wherever there’s an opportunity. I think it’s a conversation that’s necessary and is happening … at every opportunity.

But advertisers are looking to do it more and more, and we’re looking to meet their needs more and more. We have a lot of first-run programming at all of our companies and various platforms, from network to Internet properties-also partnerships with mobile companies, etc. I think those are slowly providing opportunities for us.

Mr. Teicher: I also want to point out something that I mentioned on a panel recently. I do believe that it is important, not just on behalf of the content creators like ourselves but on the advertisers’ behalf, to follow the consumer. So we therefore need to find additional distribution platforms for our content. And advertisers, quite naturally, would like to be aligned with them.

But I also believe today the perception is a lot bigger than the reality. In terms of the number of true opportunities, they’re significant, and most importantly, the financial impact. There is no scale at this point for these new media opportunities, certainly when you compare them to the size of the audiences that we draw on traditional television.

So I’m not diminishing the importance of them, but I’m also trying to bring a measure of reality back to the sometimes inflated headlines we see about how the whole world is going to these digital platforms. There simply aren’t enough opportunities when you consider how many hundreds of clients do upfront, nor is there the breadth or scope or scale that makes a true dollar differential versus the billions that will be spent during the television upfront.

Mr. Cesa: Advertisers are all sticking their toes in the water, trying to find out which one of these new options will have a positive return on investment … because you have to deploy a lot of people and assets to get things done.

They want to get as much quantitative data out of their efforts as they can. Michael’s hit the nail on the head. A lot of these things are not scalable. And they will continue to do them because they have to; it makes sense, all the sense in the world, this research development. But right now it’s still in its nascent state.

TVWeek: Does anybody have any plans to make these fields available either through broadband or through iPod or some other sort of device?

Mr. Hirsch: They are. I mean, “Entertainment Tonight” is an example. … Most of the programs in their first run in syndication have Web sites. Most of us to some degree I’m sure have found a way to get advertisers who are purchasing our programs aligned to some degree with those Web sites. But I think Michael makes the point very well. I think they’re probably sticking their toes in the water with a lot of this.

The real money that they’re spending right now in these things is not playing around with our shows or even network programs. It’s the general advertising on the Internet. That is wher
e there’s a lot of money being spent. I think advertisers will continue, as others have said, to dip their toes in the water; we will continue working with them. We’ve already spent probably seven or eight minutes talking about this, and in the real world that we all live in … there should be about an 11-hour interview process.

TVWeek: Fair enough. How about things like product placement and market integration? Are those becoming real and significant ways for you to make money and are they opportunities available to advertisers?

Mr. Hirsch: The answer is yes. I think as with the network, there are certain programs that exist in syndication. We personally don’t believe in product placement. We don’t think that a can of Coke-Cola [on] a table is a big deal.

But you can genuinely integrate products into your program. … We put M&M’s as reporters on “Entertainment Tonight” as field correspondents, and I’m sure that others around this table have done things that are similar. I think advertisers like it. I think it makes sense for advertisers. I think it makes sense for the programs.

There are two caveats: One, it has to make sense to everyone, or else viewers simply view it as more commercials. And two, there’s only so much of it you can do before it begins to lose its impact. So while it’s exciting and it’s good for everyone, there is a certain limited ability to do it or else it just becomes ho-hum. But I think if you do it right, it works for everyone, including the consumer.

Mr. Teicher: I’m actually very proud of the syndication industry. Because I believe that our industry answered the call to this marketplace dynamic very quickly, and did it in a very smart, meaningful, effective way.

And I really applaud all of us as an industry for stepping up to the plate and really creating effective branded entertainment or marketing integration opportunities or sponsorships that I think didn’t exist as recently as a few years ago. I just think we’ve stepped up to the plate in a big way.

TVWeek: Give us some examples of what’s going on with your shows.

Ms. Argentino: Michael’s “Ellen” this week did a terrific integration with Dove, which was a lot of fun. The M&M’s thing is a great example… It’s really appropriate; it really fits in.

I think all of us have examples of this. “Access Hollywood” has done a number of them with Verizon, with [the Volkswagen] Touareg, and with Maybelline sponsoring segments.

Some of them are as simple as sponsoring a segment in the show. Others are much more integrated, much more organic-to use an overused term-but I agree with Michael that there’s been a great amount of this done in the first-run world.

TVWeek: As we go to the upfront conversations, do you have to have these kinds of conversations about the integrations earlier and earlier? And does that lead to a better sense of what kind of money you’re getting from various clients once you have these sorts of deals in place?

Ms. Argentino: I think they have been. They start the process earlier, but they go on all throughout the year. They’re really not limited to the upfront. Advertisers and the programming side know that there are opportunities to explore and to execute throughout the year, rather than trying to accomplish all of it as a negotiating tool in the upfront.

Mr. Teicher: And Jon, you should probably be congratulated at this point because we’ve gone 30 minutes without a moderator asking if the upfront is broken. So …

TVWeek: I was going to make a joke about that at the beginning, but I decided it wasn’t that funny.

Mr. Teicher: Oh, you’re original. So to echo what Bo is saying, the upfront is just the culmination of what you do for 52 weeks. Yes, these conversations do take place all year long.

The amount of manpower and time consumption behind these is enormous. It can’t possible happen in a three-, four-, five-week period of time. These are programs that are sold-in throughout the year that really deepen or make the partnerships with our advertisers even broader.

Mr. Cesa: I agree. It goes on 52 weeks, but as soon as we know what new programs we’re going to launch, we start the conversations at that point, and a lot of that takes place in the fourth quarter, and certainly at NATPE.

We have very good and meaningful in-depth conversations with advertisers in a relaxed atmosphere well before the starting gun goes off for the upfront.

TVWeek: How important are new shows in terms of generating enthusiasm and interest in syndication in general? Do you need lots of new shows to keep the advertisers interested and excited about the category?

Mr. Cesa: It’s a phenomenon that things are taken for granted because they’ve been around a long time. But when you look at the incredible success that our programs have had in syndication over the years, it’s staggering. Some of the most successful programs in television’s history have been in syndication and running 15- and 20-plus years. That’s one thing I think gets taken for granted too often. We constantly remind advertisers of that, as I’m sure my colleagues do as well.

TVWeek: Anybody think or feel like their new shows are getting particular traction with any specific categories?

Ms. Argentino: It feels as though the automotive category is particularly interested in exploring new opportunities, maybe dayparts, that they might have neglected in the past. So I hope we can look forward to daytime as a place for the automotive category to grow.

Mr. Teicher: Of course we’re excited about the new show we’re bringing out, [“The Dr. Keith Ablow Show”]. You know, it’s that time of year when we all get excited, enthusiastic about our programming.

We brought [Keith Ablow] around to meet lots of advertisers in New York and Chicago, and the reception seems good. So we have good clearances, what appears to be a good host-now we just need a good show and people to watch it … like everybody else who’s launching a new show.

TVWeek: OK, I’m not going to ask if the upfront is broken, but I am going to ask if you have any predictions on how it’s going to unfold. In terms of where you want to be when the money starts being [committed], do you want to be in the front of the line or are you guys content being toward the back of the line, after the broadcasters and the cable guys have started to cut their deals and determine their general price levels?

Mr. Teicher: Nobody controls when they buy. No seller controls when they buy. So no predictions from here.

Mr. Cesa: It is up to them. They have greater purview than anybody, because everyone-cable, network and syndication-are in there talking to them all year long, and they know where the market’s at, know what their needs are. They’ll basically tell us when they want to move.

TVWeek: Does anyone have anything they want to bring up germane to what the buyers are going to be looking for when it comes time to spend money on syndication?

Mr. Hirsch: The very word “syndication” is sometimes problematic for buyers. I would encourage any buyer, planner, client reading this to remember the following: We don’t sell syndication, we all sell programs that happen to be distributed through a method called syndication.

If we can get over the hangup of that word and realize that there are a lot of terrific programs that all of us have to offer with terrific opportunities-in terms of running commercial pods, in terms of retention, in terms of having programs that are on five days a week [and may be] much more TiVo-proof than programs that are only on once a week.

If you look at the programs that we have, if you look at the ratings and the demographic deliveries that our programs have, and if you take in commercial retention in all of its forms and
get past the word syndication, I think we’d all be better off … and advertisers would be able to reach their clients in a better way and make more profit.