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12 to Watch: Rino Scanzoni

Jan 29, 2007  •  Post A Comment

There could be big changes in the upfront ad market this spring, and if there are, Rino Scanzoni is likely to be right in the middle of them.

Last year Mr. Scanzoni became chief investment officer for GroupM, which owns media buying agencies MindShare, MediaCom and mediaedge:cia. In that post, he will gather intelligence and set strategy for the group when it comes to big issues such as whether or not to adopt commercial ratings as the way TV ad time is bought and sold.

And given his outspokenness, he’s likely to have an impact on the rest of the industry as well.

After last year’s upfront, in which the threat of advertising dollars moving to the Internet and online video helped create a buyers’ market, he began to calculate what this year’s market will bring.

“I think everyone is trying to figure that out. I don’t know if anybody’s really sure where it’s going,” he said.

Some things he is pretty sure about. Take commercial ratings. “I have no doubt in my mind that within the next six to 18 months the entire industry is gong to be moving to average commercial minute ratings,” he said.

Commercial ratings would measure how many people are watching the spots advertisers buy, rather than how many people are watching the network’s shows.

GroupM joined the broadcast networks in asking Nielsen Media Research to create a commercial ratings system last summer and major and minor controversies have followed.

Some other agencies favor commercial ratings with no delayed viewing on digital video recorders included. Others would prefer to see ratings of individual commercial pods or even individual spots. Cable networks and syndicators have balked at the early efforts and want the industry to wait until Nielsen is able to provide numbers for them that are as accurate as those it provides for broadcast.

“It might be a situation where it might have to be rolled out, and broadcast might be in a better position given how they distribute their programming to be able to initially make that move,” Mr. Scanzoni said. “And then they might be followed by cable and syndication, where you’re dealing with a little bit more complexity and some issues that need to be resolved.”

Mr. Scanzoni agrees that having more granular ratings of individual commercials would be better for the industry. “The problem is the current system is completely impractical. The numbers are just not stable enough,” he said. “If the numbers are not stable, how are you going to conduct commerce on it? That’s the thing that people are not thinking through. If you’re going to use something as a currency, it’s got to be something that’s somewhat stable, projectable and manageable.”

Commercials ratings are also important because it’s a way to deal with those commercials being watched on DVRs. “The programs that people want to be in most, that drive the business, are the ones that are getting recorded the most, so we’ve got to deal with that issue,” he said. “That is a major, major challenge for this business and I don’t think the answer is putting your head in the sand and saying we’re going to stay with the current system.”

As the upfront approaches, Mr. Scanzoni thinks the market is more in balance than in last year’s buyers’ market. Ads bought now in the scatter market cost at least as much as they did during the upfront. Last year when scatter prices were lower than in the upfront, advertisers had less incentive to lock in spending plans for the year in the subsequent upfront. While spending is still growing slowly at best, scatter prices signal a healthier market, he said.

But some pundits have been predicting the death for the upfront as the main way TV commercials are sold. Indeed, more business is being done outside the upfront, turning ad sales into a 52-week-a-year business.

“Our position is you do a deal when the right opportunity comes along. It doesn’t have to happen during a specific traditional time frame,” Mr. Scanzoni said. “I think the days when everyone is going to wait for the gun to go off are behind us.”

But don’t expect him to be fishing in late May and early June.

“Having said all that I still think the majority of the business will probably, at least for the next couple of years, still be done in that spring to summer time frame.”