Cobbling Together a Target Ad Audience

May 4, 2008  •  Post A Comment

NBC Universal is hoping a new approach to advertising sales will extract premium pricing in this year’s upfront ad market by packaging viewers who are watching its shows across various media.
The initiative started by ad sales chief Mike Pilot aims to create the kind of mass reach broadcast networks used to be able to create on their own.
Now NBC Universal is taking the specific target audience an advertiser is trying to reach, finding those individuals across the company’s broadcast and cable networks, as well as the Web, and putting a marketer’s message in front of them.
“As viewership continues to fragment and as the viewer becomes harder to reach, marketing campaigns become harder to design, harder to coordinate, harder to implement and activate,” Mr. Pilot said. The goal is to “bring the entirety of the NBC Universal portfolio of assets to the advertiser in one package.”
Over the years, networks have formed units designed to foster cross-platform sales, such as Disney’s Unlimited Unit or News Corp.’s News One, but they were not always helpful to advertisers.
“In years past, it was, ‘Let’s throw this in the mix because someone wanted to generate revenue,” said Shari Cohen, president and co-executive director for national broadcast at MindShare, which is discussing a deal with NBC Universal. Since then, most media sellers have improved their approach, she noted.
“They’re developing a better understanding of our clients and their products and have a better understanding about how to utilize their assets to compliment that,” Ms. Cohen said.
NBC is ranked fourth among the broadcast networks in the key 18- to 49-year-old demographic. Its ratings have fallen 9% this season, which was disrupted by the Writers Guild of America strike.
Last year, NBC registered advertising commitments of about $1.9 billion during Mr. Pilot’s first upfront, little changed from the previous year. The network’s price increases were smaller than its competitors’.
Getting Out Early
NBC Universal moved quickly this upfront season, announcing its programming schedule five weeks earlier than normal to encourage marketers to integrate their products and messaging with its shows.
“NBC has taken a different path in this upfront,” Ms. Cohen said. “They do have a lot of assets and I feel like they’ve got their act together as it relates to how to best strategically use those assets.”
NBC Universal has set up internal systems to encourage the sales teams at its various units to collaborate. It also has set up an enterprise marketing team, which is charged with finding out what a client is hoping to accomplish with a campaign, which audiences it is trying to reach and how best to deliver those viewers.
“It’s designed so that we hear in a very, very detailed way what their target audiences are,” said Senior VP Debbie Reichig, who heads the marketing unit. “So we hear all of the particular attributes and lifestyles and mindsets and brand objectives, and then we come back here and we do a ton of research on our content across everyplace, and so we can actually put together sort of a virtual network just for them.”
As an example, Ms. Reichig said one such virtual network would reach women by combining content from “Today,” Oxygen Media, Bravo Media and iVillage.
The unit uses a mixture of syndicated data and some proprietary research. In two cases it has conducted primary research for an advertiser whose target was so obscure the network didn’t have any data.
“When you put all of our properties together, we reach almost every person in this country in a month, and so we reach every psychographic category,” she said.
All of this effort comes at a price, Mr. Pilot said.
“This approach really is for larger clients who are looking for greater impact.” Mr. Pilot said. “These discussions take more time, more effort, more creativity, more resources on both sides to activate and execute. They need to deliver more value or they’re not worth doing.”
NBC expects to get a premium price for all of the media involved in this type of deal, he said.
“We’ve got to resist allowing these new ideas to be cranked through the same old CPM [cost per thousand] machine,” Mr. Pilot said. “We’ve got to demonstrate new value and we’ve got to realize that new value.”
While NBC Universal executives say clients have told them they’re willing to pay more for this kind of custom targeted approach, buyers aren’t as gung-ho.
Valuing Innovation
“That doesn’t sound reasonable to me at all. With declining audience and the notion of paying more for less, they all collectively need to do this to remain viable,” said Ms. Cohen. “The ability to be innovative is what is going to keep dollars with them. The value of their innovation is going to be recognized by the amount we spend with them, not by paying a premium.”
NBC Universal also is looking to create new metrics to measure campaigns across various media. At this point it can measure gross impressions, or the number of times viewers see a piece of content.
“We’re actually working very closely with several different suppliers out there to work on algorithms to get total audience measurement on an unduplicated basis,” Ms. Reichig said. “Hopefully we’ll be announcing something soon about that.”
NBC Universal will be running a number of cross-platform marketing efforts during the Olympics and will be researching their effectiveness in a number of ways. But for now, the company is aiming at the upfront and is counting on its new approach to pay off.
“Going out early absolutely has put us in a position of having very specific conversations with clients about shaping upfront deals,” Mr. Pilot said. “And those will come through the agency buying process when the market starts to move. But the deals will be shaped and come through the process intact.”


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