Ad Buyer: Time for Fall Season to Go

Dec 16, 2007  •  Post A Comment

If the Writers Guild of America strike lasts well into next year, pushing the networks to abandon their traditional upfront presentations and their fall season program launches, the industry would be better off.
That’s the surprising opinion of a top media agency executive, Rino Scanzoni, chief negotiating officer for Group M. The Group M stable includes three of the biggest media agencies on Madison Avenue—Mindshare, Mediaedge:cia and Mediacom—and buys hundreds of millions of dollars in airtime for its clients annually.
While Mr. Scanzoni is clear that in the short term the strike is not good for advertisers, he said that if it keeps the networks from unleashing their annual torrent of new shows come September, “It would be the best thing for the business.”
Launching several dozen new shows in September “reduces sampling and increases program failure,” Mr. Scanzoni said. “I think if shows were launched throughout the year, we would have more successful shows and it would be less expensive to produce those shows.”
Advertising still could be bought and sold on an upfront basis in June, he said, even if pilots are not available at that point, Mr. Scanzoni said.
“At the end of the day, what we’re buying is a future GRP [gross ratings points] contract with certain stipulations about what the overall quality of the schedule needs to be,” he said. “All of those things can be articulated into a contract, without necessarily knowing exactly what every show is at any point in time in any given week, because, you know what, we don’t know that now.”
But media veteran Aaron Cohen disagrees.
I don’t think there are advertisers who would want to simply throw money down on the table on a what-if basis,” said Mr. Cohen, director of national broadcast at Horizon Media and a former national sales manager at NBC. “Broadcast has never been just about total ratings points. It’s always been based on programming, content and opportunities to do things with programs. … Do you really want to commoditize a medium and just buy ratings points without any values? I don’t think anyone’s really interested in having that happen.”
Mr. Cohen said the networks are still working on their second-quarter 2008 schedules. Until those are set, some networks are not ready to begin selling scatter time in the second quarter. With markets tight and prices soaring, Mr. Cohen said he’d like to put his clients’ money down early.
“It pays to be a little ahead of the game,” he said, but “I can’t force them to do business when they’re not prepared to discuss specific programming.”
Mr. Cohen, whose independent agency was a holdout against turning to commercial ratings in the most recent upfront, said the new system is partly responsible for the high prices in scatter. Although the broadcast networks were unwilling to do deals on any basis other than commercial ratings, Horizon did program ratings deals with most cable networks and syndicators.
“We did better because we held to the live basis for this year,” Mr. Cohen said. “The only thing [the major agencies] impacted for their clients by going to C3 was the extraordinary high prices in the scatter market they’re now facing.”
In that strong scatter market, and with its ratings lower than expected, NBC ran out of prime-time commercials to provide to clients as make-goods and had to pay $10 million cash to a handful of marketers who wanted their ads in the fourth quarter. NBC had a big backlog of make-goods dating back to the second quarter.
“This represents an extremely small portion of NBC’s business and accommodates the changing needs of our clients’ marketing plans,” the network said in a statement. “NBC is working with its clients to come up with creative solutions in a new sales environment created by a new business metric and changing consumer behavior.”
Mr. Scanzoni, who opened the upfront with NBC Universal with a deal that set commercial ratings as the standard, said he wasn’t aware of any Group M clients getting cash from NBC. But he noted that in a tight environment, giving cash back to clients who paid low prices last year could be good business if those ratings points can be sold to advertisers paying higher rates now.
While $10 million is small relative to the $4 billion in ads NBC Universal sold during the upfront, giving money back to advertisers is symbolic of continuing audience erosion facing the broadcast network.
As the strike continues, members of the WGA have been reaching out and meeting with media agency executives to explain the writers’ point of view, according to a report last week in the Jack Myers Media Business Report.
“The strike is a huge issue of advertisers,” Sarah Fey, CEO of Carat US and Isobar, told the Business Report. “It seems like the networks are intent on burning their own house. And ours. Not only that, but it also appears that the industry press, and of course the news channels, won’t cover the writers’ side fairly because of politics. They are now talking to people like me because they want us to know how dire the situation is.”

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