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Pilot on Mission at NBCU

Apr 6, 2008  •  Post A Comment

Giving advertisers an early look at its broadcast prime-time schedule for next season is just part of NBC Universal’s effort to remake the way it sells advertising.
Mike Pilot, who joined NBC Universal as president of sales in 2006 after spending his career at other units of parent company General Electric, has been working to focus the ad sales organization on marketers’ needs and the ways NBC Universal’s media assets can reach their customers.
That work complements the new programming being developed by Ben Silverman, who is going through his first upfront as co-chairman of entertainment at the company.
“We have embarked on a mission to get closer to the customer,” Mr. Pilot said.
The model of putting out shows and selling commercials served the network business for about 50 years, but now advertisers want new ways to use video content to help sell products.
“Clients are saying they want us to help sort this out, and they don’t seem to care where the ideas come from,” Mr. Pilot said. “We want to be the best marketing partner we could be to our advertisers.”
According to some media buyers, those efforts are paying off.
“NBC is more user-friendly and easier to do business with,” said Charlie Rutman, CEO of MPG North America. “The difference between selling the stuff you have and applying the stuff you have to meet client objectives is not just a change in words—it’s an attitudinal difference.”
When fourth-place NBC was the dominant network, its ad sales staff was sometimes thought of as arrogant, waiting for advertisers to call because they had to be on the network’s top-rated schedule, especially its must-see Thursday night lineup, which included “Friends” and “ER.”
But when “Friends” went off the air, NBC’s ratings tanked, followed by its ad sales and pricing. NBC’s upfront sales tumbled from a record $2.9 billion in 2004 to about $2 billion in 2005.
Last year, Mr. Pilot started the upfront with a bang, opening the market with a $1 billion deal with GroupM that was the first to use the new commercial ratings as currency and the first to include all of the media company’s assets across broadcast, cable and the Web. The broadcast network last year finished the upfront with about $1.8 billion in broadcast ad commitments, unchanged from 2006.
When Mr. Pilot came in, he knew one of GE CEO’s Jeff Immelt’s corporate priorities was to improve sales and marketing efforts to drive organic growth at all its units. He also found out that NBC’s ad-sales staff wanted to learn a new way of doing business.
NBC set up a series of what were called “innovation meetings” with agencies and clients. The meetings covered topics such as advanced advertising technologies, new metrics and new research capabilities, without directly aiming to create sales.
“It was the beginning of a more open and continuous relationship,” Mr. Pilot said, contrasting it to the transactional relationship buyers and sellers have—and will continue to have—in the upfront and scatter markets. “Outside the transaction cycle, you have a chance to do better things.”
Mr. Pilot also set up what he called a content innovation team, which creates custom content and pod-busters for clients. One example of its work was touted last week during NBC’s meetings with buyers. That piece, an animated version of American Express spokeswoman
Beyonce Knowles, was created by the artist who draws the prescient paintings on NBC’s “Heroes.” It is meant to bridge the gap between that series and an AmEx commercial.
Mr. Pilot created a new structure for his organization, with senior executives put in charge of key areas, such as network, cable, digital and Spanish-language.
“It had been convoluted. We cleaned that up,” he said. “We structured the organization the way the marketplace sees us.”
New support systems and training were put into place to ensure that all of those groups collaborated to provide advertisers with solutions that include multiple NBC properties.
“We need to be great in each area, but also able to sell across those platforms,” he said.
An enterprise marketing team, headed by senior VP Debbie Reichig, was formed. Its job is find potential audiences for clients over all of NBC Universal’s assets.
“Who are you trying to reach? Here’s where they live on our properties,” is how Mr. Pilot summarized that pitch.
Since Mr. Pilot took over, the size of the cable and digital sales staffs has increased, and there has not been much turnover.
That’s fine with Mr. Pilot, because NBC’s sales staff had “been very good at managing the relationships that move the dollars,” he said.
“The relationship aspect of what we do together is really key, because of the tremendous volume of material we deal with and the changing circumstances both on the client side and the network side,” he said. “What you have to rely on is the spirit of what you’re trying to do together, and that’s when relationships really come into play.”
New training to help the sales team understand their customers’ needs and the platforms on which they are selling ad inventory was forced by changes in the industry, Mr. Pilot said.
Mr. Pilot also brought in Jay Moore from GE corporate, who had designed a sales-training program that Mr. Pilot had gone through before joining NBC. Mr. Moore now reports to Mr. Pilot as VP of NBC Universal and learning leader. He’s created a new sales-training program for NBC sales staff.
A computerized customer relationship management system was put in place that enables salespeople in one area to reach out to other areas to help fill a customer’s need.
The sales compensation system also has been changed. In addition to being responsible for bringing in a certain amount of sales, salespeople are being given incentives to come up with revenue-generating ideas and for collaborating with other NBC units. The collaboration can be tracked and can result in incremental earning opportunities for the sales staff, Mr. Pilot said.
When he arrived at NBC Universal, Mr. Pilot found that he inherited six different order-taking and ad-trafficking systems that didn’t interact. He brought in people from GE to create a single system that will seamlessly invoice and steward all of the commercials bought from NBC Universal.
NBC Universal’s research operation also was added to Mr. Pilot’s portfolio to help him deal with the question from buyers: “How do we combine programming, marketing techniques and technology to get messages out to the consumer?”
“Research is right in the center of that discussion every day,” he said.
Much media buying is still done to accumulate ratings points, and networks with high-rated shows will pull in higher ad revenue than low-rated networks.
But as another upfront approaches, Mr. Pilot believes that over time, offering higher-quality solutions will translate into a greater quantity of business.
“There are improvements we can make in how we collaborate with the advertisers and with the agencies that are independent of the programming that we put on any of our channels,” he said.
When both the programming and marketing organizations are firing on all cylinders, you’ve got the best of both worlds, he said.
Indeed, while big hits can change everything, most of what both the networks and media buyers do is a game of inches; a more open sales operation can help NBC, said MPG’s Mr. Rutman.
“When you’re operating on the fringes, you’re looking for things that can tip the scales. This is a big area of scale tipping,” said Mr. Rutman. “What you want to have is every possible thing working in your favor, and then it’s in the hands of the gods.”

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