1977. 40 years ago. Jimmy Carter is president of the United States. Atari releases its first home video console in the U.S. Elvis Presley dies at 42. Egypt recognizes Israel. A gallon of gas is 65 cents. New York City is thrown in the dark for 25 hours in an electrical blackout. The Commodore PET computer is introduced at CES. The first “Star Wars” movie is released. The Clash puts out its first album. The Concord makes its first commercial flight between London and New York. Soccer great Pelé retires. “Three’s Company,” “Eight Is Enough” and “The Love Boat” debut on TV. Donald Trump turns 31 and marries his first wife, Ivana. “Rocky” wins best picture at the Oscars. “Oliver’s Story” and “The Thorn Birds” dominate the best-selling book lists. The Yankees beat the Dodgers in the World Series. The Raiders top the Vikings in the Super Bowl. Kanye West, Tom Brady and Psy are born.
And an 18-year-old college student, Lyle Schwartz, going to Hunter College in New York, loves playing baseball. It turns out that his sister works at Simmons Market Research, and they are looking for a few players to fill out their company baseball team. She recruits Lyle. A big selling point is that they can drink beer, both during the game and after the game. Lyle says he drank less than most of his teammates, and loved playing second base and then right field. He says he wasn’t a bad hitter either.
To be a part of the baseball team, there was one catch. You had to work for Simmons. So Lyle started working there a few nights a week. It turns out he liked it. So much so that he eventually joined BBDO and then Y&R. In research. He was on his way to a storied career.
A year ago this week Alexandra Bruell wrote in The Wall Street Journal about a major change at WPP’s GroupM ad-buying unit. Rino Scanzoni, a former TVWeek Media Buyer of the Year and “the GroupM ad-buying veteran who influences tens of billions in media spending each year, is moving out of his role as North America chief investment officer,” Bruell wrote, adding, “He will become executive chairman and CEO of GroupM’s addressable TV group, Modi Media, as well as its barter group, Midas Exchange.”
Bruell continued, “Lyle Schwartz, GroupM’s managing partner for research and marketplace analysis, is becoming president of investment in North America, taking on media buying and negotiation responsibilities across TV, digital, radio, print and local media. Mr. Schwartz has worked closely with Mr. Scanzoni, but he’s known more for his experience in research and analytics than TV network negotiations.”
Those on the selling side of the table give Schwartz, now 58, high marks in his new position, and among those we polled confidentially to help us select our 17th annual Media Buyer of the Year, Schwartz was clearly the hands-down choice. “He’s smart and believes the better we become the better vehicle we are to help sell his clients’ products,” says one veteran network seller. Says another seller, “As we focus more and more on data, having someone like Lyle now as a buyer is a distinct plus.”
TWeek’s Chuck Ross began our interview with Schwartz by asking him to respond to a prediction Schwartz made a year ago:
TVWeek: You told Brian Steinberg a year ago in Variety: “Maybe 2017 will be the year we can buy programs across devices.” How disappointed are you that that really didn’t happen?
Lyle Schwartz: I think from a technological standpoint we are very close. There is a lot of testing going on on what can and cannot be done. So we’re moving in the right direction. I’d like it to be moving faster. I think there will be opportunities next year to buy what I call device-agnostic ratings. I think we’re going to get a lot of learning from that.
The issue today, all too often, is that most of our media is based on the device. So, for instance, even in print, we talk about the printed word on a paper, or in a magazine. But these brands live well beyond the printed renditions into other vehicles.
We need to understand that people want to interact with the content, not necessarily just the device. And I believe that what you don’t monitor, you can’t measure. And what you can’t measure, you can’t monetize. And unfortunately, in this world, if things don’t get monetized they cease to exist over a period of time.
So I still believe that current content, whether it be in video format or in a branded print vehicle, or audio, it’s still extremely powerful for our clients.
TVWeek: Let’s focus on video for a moment.
Schwartz: Sure. It’s really important for consumers to get what they want, where they want and how they want — what I call choice, control and convenience — at a particular cost. We need to look at how the consumer is interacting with this video and get permission to put our ads in there, in order to allow this content to continue to proliferate. Having it measured by one method allows me to look across these devices and either re-aggregate them or look at the components and figure out what the value is so that I can put a price against it on behalf of my clients. It’s all about putting the consumer in the middle.
TVWeek: And then I assume that you, as many media agencies do, add various other data to concoct your own secret sauce to benefit your clients.
Schwartz: For many years we’ve been using return path data, which gives us a tremendous sample, and we overlay sales data, or client-first and third-party data. Then, instead of showing my cards to the networks, or other video providers, or print providers, I use all the data I have at my disposal. So I understand what I want, when I want it, and how I want to get it on behalf of my clients. In this situation, my client is the one I want to keep happy by getting them more impressions against their most valued consumers, as they define them.
At the same time I have to maintain certain pricing because I still have to be able to benchmark, and look at different rates of change. So as the industry buys off of many of the demos, there is a lot of comparability there.
TVWeek: It seems to us that on the other side of the table the sellers are coming up with ever more services as they scramble, in a very competitive environment, for your clients’ money. For example, Turner and Viacom and Fox are working on Open A.P. And that’s just one example. Other networks are joining together to offer other products. Does it get confusing sometimes who is offering what?
Schwartz: It doesn’t get confusing because technically that’s what they pay me to know. And I have a tremendous team behind me, whether it be the video buyers or our crack research staff, who keep me on top of all this. Because yes, there is so much going on.
For example, you mention Open A.P. With that the participating networks are basically going to allow the industry to create these non-demographic targets. Let’s say people who own a car but lease it for a certain amount of time. They will be able to dimensionalize it within their inventory. But it’s only across the properties owned by those three companies. I am blessed, being with WPP, which has a plethora of data, of being able to work with my clients to define that. So I know the value, not the networks. But for a smaller agency or client who doesn’t have that expertise or the money to get that information, Open AP is an asset.
However, once you go to a behavioral-based target and away from a demographic, you change your base, so you lose your historical base. And in TV, losing that legacy is almost anti-religious.
On the positive side, we are now seeing networks under different ownership working together. This is something relatively new. I say it’s a good thing because it should bring in a lot of new thinking and innovation. My hope is that those in traditional TV and those in non-traditional TV will stop looking at each other and thinking what the other guy has that they don’t, and instead provide us with some commonality of measurement so we can decide, where is the most efficient place we can place that first dollar.
We need a consistent method and approach of putting these numbers together. And I might see some data that the next fella doesn’t. So it makes it hard to use it as a baseline currency.
TVWeek: I love the business mantra KISS, or Keep It Simple Stupid. Does the data needed for the most efficient media buying today, in 2017, preclude using KISS as a mantra?
Schwartz: I think it’s important that to the industry, to our clients, we keep it as simple as possible so they understand why we do what we do and how we do what we do. In other words, what it means to them. But behind the scenes, the work can be complicated. Our data has to be reputable and projectable. Our analysis of whatever the data is should be consistent, and it is.
Besides KISS, the other acronym you hear in business is SWAG, which is Scientific Wild Ass Guess. Without good data you get more SWAG than KISS.
TVWeek: Thor is another project among multiple networks. Could you please tell us about it.
Schwartz: Sure. It’s an approach wherein some networks are working with a third party to show the effectiveness and efficiency in driving sales and other metrics for national TV. Again, I think it’s a positive move. My clients all have their own and do a lot of these things. Realistically, we should be doing it across all media simultaneously, making sure we are putting money in the best place at all times. Thor is a nice step, but I think we need a much more holistic approach. Though I commend the networks involved for doing it.
TVWeek: Tell us about this holistic approach that you see is needed.
Schwartz: Clients need to work internally, or with third parties, or with their agencies who have the capabilities, to really understand as many of the different dimensions of the communication as is possible. So network TV would be a component, digital video (even from the same company), in-store communications, promotions, discounts, geographic and other variables, all have to be looked at together. Because I don’t think one announcement makes the sale. I think it’s the long-term viability of building brands. You build a brand and then the brand can survive and grow and give you permission to do so much more.
TVWeek: When TV is everywhere, as it is today, what kind of challenge is that for an advertiser?
Schwartz: What we have to make sure is that we have the permission to put our messages in many places. For instance, if someone is watching a 30-second clip, we really don’t have permission to put five minutes of commercials in there. If someone wants to watch prime-time programming at 2 in the morning, they should be able to do so. The consumers have the right to see it, and the creators have the right to get paid for it. That’s the trade-off.
TVWeek: Isn’t one of the problems for advertisers right now that there isn’t a particularly easy way for them to be attached to content across all devices? For example, a client might have a spot right before or after James Corden does his “Carpool Karaoke” with Beyonce on his show, but when millions more watch it on YouTube your client isn’t connected with it.
Schwartz: Well, if I want to be part of the repackaging of the content, there are multiple ways of doing it. Perhaps I can somehow get an integration into it — that while James is in the car he’s also using my product. Or perhaps I could sponsor it on YouTube. Today I’d have to go separately to YouTube to do that, but there may come a time when I’m buying a package on the long form and I also get a certain amount of spins on the short form. I still need to get a certain amount of reach, and I have to consider that there are different people watching it on YouTube than on Corden’s show. And the price point has to be right. And the content on both has to mesh with what the client wants.
TVWeek: Is targeting really the Holy Grail? I’ve been having discussions with media people since the 1980s about how targeting seems just beyond the horizon.
Schwartz: You have to be careful about targeting. The danger is over-targeting. You want to target a group of people who are large enough that if you are able to get them to consider your product, the group is large enough to allow the product to be viable and grow. You also want to make sure you are targeting people who can use the product, because then you are cutting out waste, and it’s more efficient. But I think it’s only one component of the entire communication. So addressable can be part of the communication, but not the only part.
TVWeek: Historically you come from research, but now you are the top investment executive for GroupM. Tell me about that transition.
Schwartz: I started off in research, but I was most often tagged as a business researcher. So I always looked at the numbers not just for the numbers’ sake, but what they meant, and how the numbers impacted what my client was doing. I remember doing a presentation about 20 years ago at a media company and saying, “If you ask me what the top 10 rated programs are, I’ll tell you I don’t have a clue. If you tell me the top 10 programs that a certain client wants, I can talk for hours.” Because that’s what I was focused on. And as I evolved, I started working more and more with clients in answering their questions. So whether it was telling them who goes to a certain type of movie, or who buys certain types of products — these were things that excited me because I was able to impact our clients’ business.
And it changed the conversation. It was not about “what are you buying,” but it was about “how can you help me grow my business?” Many years later Rino [Scanzoni] and Irwin [Gotlieb], when they joined GroupM, opened up a vast knowledge to me. They are really closet researchers. They like numbers. They know numbers. We melded. It was a tremendous learning experience for me to see how they approached the marketplace.
The difference between myself as a researcher and Irwin and Rino was that they worked in relationships in terms of, “All right. It’s $100 million, plus or minus.” As a researcher I would say, “It’s $100 million, that’s it.” So there was a lot of learning involved, and they took a lot of time and effort to teach someone like myself how to do this.
And then I have to give credit to the Kelly Clarks of the world and the Brian Lessers, because they, along with Rino and Irwin, saw that data was becoming more and more important, and how to utilize that information to give clients an advantage was key. [Clark is GroupM’s global CEO and Lesser was, until recently, GroupM’s North American CEO.] It was almost like they were all creating an avenue for me. Did I ever think I would be in this position today? No. You grow up in this business and you might think, what will I be doing next year, and then the next thing you realize, you’ve been in this industry for 30 years. It’s been magnificent.
And now non-traditional media reports in to me. It’s like I’ve opened a candy store. There’s just so much opportunity. And being a researcher, I always go back to, “Let’s make sure the numbers are right. Let’s make sure we are approaching things from the right direction, and let’s make sure that what we are doing is in the best interest of our clients.” I’m always trying to make sure that everything we do makes a better environment for my clients and for the industry. Because the future has yet to be written, and the minute I understand everything about today, tomorrow it will all be different.
TVWeek: Are you concerned that so much viewing today is done at places such as Netflix and Amazon, which are both ad-free?
Schwartz: The concern there is with what we call the non-reachables. But we had that with the HBOs and Showtimes of the world in the past. Models evolve, and we have to evolve with it. At some point, there is a belief that some of these programmers that don’t take commercials will take sponsorships. Or we might have to go back to the future, and start producing programming and then be aligned with the programming. There are tremendous opportunities all over, and I don’t think you can close your mind to anything.
TVWeek: That’s interesting. Of course when TV first started the advertising agencies produced the programming for the networks. Could this evolve today to where the agencies might produce a certain number of pilots for some programmers?
Schwartz: The hard part is the economic model. We have to solve the measurement issues so we can monitor and monetize properly, and then maybe that economic model could come back. The economic model might not be on traditional linear TV, but on non-traditional. And they could be the same players, but it would be a slightly different approach.
TVWeek: Isn’t one of the reasons for the success of Netflix or HBO because, plain and simple, people don’t like commercials?
Schwartz: But if you look at the Super Bowl, how much time is spent on the game versus talking about all the commercials — and a lot of the commercials are shown on the Internet before the Super Bowl and get a tremendous following …
TVWeek: But isn’t that the exception?
Schwartz: But I think if you make an event out of a program, it might not be. Then people will want to watch. I think the other part of this is that the media planning community does a tremendous job in identifying the consumer — the behavioral aspects, the psychological aspects. And the media buying community does a great job finding the right environment, and they get the content fit.
And then what do we do? We send the same commercial to everybody. Sounds kind of crazy, doesn’t it?
So the message needs to change as well. If there is more relevant creative, if the creative is of a certain level, I think that people won’t be upset as much with it. I also think that’s where you get to addressability. If it’s done right you can actually create environments where the message is really talking to a person with such relevancy that you can reduce the commercial load, which would make the TV show writers really happy. Give them an extra two minutes in a 30-minute program and they are ecstatic.
So if the ads are more relevant to the consumer, it’s less intrusive. And if it’s less intrusive the audience stays with it more. And there’s always a chance for the advertiser to be more efficient and effective, for the media company to make more revenue, and then they can produce quality programming.
I know we always talk about Netflix and HBO and the like, but we are also talking about a certain quality of programming. That’s the issue. It’s the quality of the programming. And it’s really hard to do with networks putting on so many hours in prime time every week.
TVWeek: So to get better commercials it sounds like you are saying we need media and creative to remarry on the agency level.
Schwartz: I don’t know if they need to marry, but they need to work closer together. It depends on the client and the approach. They need to communicate better.