Media planning has long been comprised of equal parts art and science. But lately, ad agencies have shifted the balance toward science through the use of optimizers-computer programs that use Nielsen viewing data along with cost and qualitative variables to help get the most buck out of advertising's bang.
The need for optimization programs has paralleled the proliferation of television venues. When agencies were only confronted with a handful of choices-three networks and a smattering of emerging cable franchises-planning was relatively simple and intuition was the main tool necessary to assess which combinations of programs and time slots would deliver the best mix of target audiences.
In 1980, for example, when a national TV buyer had fewer options to choose from, the total number of TV schedule combinations was about 1,024, according to media consultant Erwin Ephron. By 1998, Ephron estimates that media buyers would have to select from more than 1.125 quadrillion scheduling combinations to construct a media plan.
Faced with such a Herculean task, since 1997 advertising agencies have been using optimizers to sort through the myriad choices available and deliver the largest number of targeted viewers at the lowest cost. For the most part, audience-reach optimizers are employed by only the largest ad agencies, such as Leo Burnett, Grey Advertising, TN Media, and TeleVest, because of their high cost. (While the software program itself is relatively cheap to license-$30,000 to $40,000 a year-the cost of the necessary Nielsen data is $300,000.)
With an optimizer, a planner can, for example, input a budget and the program will choose a schedule that delivers the largest reach for the money; or the planner can input a reach goal and the program will plan the schedule for the fewest advertising dollars. Since the first uses of optimizers scheduled on the basis of pure audience reach, without distinguishing between such qualitative issues as prime-time or daytime, cable or broadcast TV, their results favored cheaper options, such as cable and syndicated programs.
And those results were evident last spring during upfront buying for the 1998-99 TV season, when marketers invested more than $10 billion in TV buys. Steve Heyer, president and COO of Turner Broadcasting System, believes that the use of optimizers to increase reach contributed to the shift of half a billion dollars to cable.
While some agencies embrace the "greatest reach" approach, others have begun incorporating qualitative factors into optimizing programs. "If every agency used the same [quantitative] optimizer program, then everyone would come up with the same set of solutions," says Steve Sternberg, senior vice president/director of broadcast research at TN Media. "We use a [qualitative] system that optimizes a viewer's exposure to the advertiser's message." These programs incorporate qualitative factors, and assign a greater value to reaching viewers who are not simply the right demographic targets, but who are known to be more loyal, or attentive to the programming and advertising they see.
In 1996, ad agency DDB Needham was one of the first to begin buying media based on the composition of "loyal" viewers in various TV schedules. DDB's system, known as OnCore, uses Nielsen data to find which target viewers watch three out of four episodes of regularly scheduled programs, and places ads to reach more of those viewers.
TN Media has developed a more sophisticated system that factors in loyalty, attentiveness, and the "holding power" of a show, which is represented by the amount of time target viewers spend watching it. TN also inputs variables such as clutter (the amount of advertising time contained in a TV program), as well as research on viewer attitudes toward specific program genres.
And recently, Nielsen Media Research introduced a syndicated system called Quad that analyzes the composition of an audience not simply on the basis of demographics, but on how regularly and closely viewers watch a program. Quad divides a show's audience into four segments: "Gold Card" viewers watch most of every episode; "Silver Sliders" watch some of every episode; "Occasionally Committeds" watch most of some episodes; and "Viewers Light" watch some of some episodes.
Nielsen executives say Quad allows advertisers to get a better picture not only of how involved each type of viewer is in the show, but how involved the viewer is in the advertising within the show.
"If you think about it, frequency is really a surrogate for loyalty, and duration is really a surrogate for attentiveness. By looking at the frequency and duration of viewing, we can determine how involved viewers are with what they're watching," says Paul Lindstrom, a vice president at Nielsen.
Among the initial findings from the Quad analyses is that high-rated shows such as network prime-time programs deliver the greatest concentrations of loyal and attentive viewers. It's no surprise that the networks are pleased by this. "High ratings are a proxy for attentiveness," says Horst Stipp, vice president/director of social research at NBC.
Arthur Tatnell, senior vice president/director of media information and technologies at Bates USA, concurs: "Basically, all this qualitative research is reinforcing the notion that there is some reason behind the high CPMs [cost per thousand viewers] we've been paying for broadcast prime time."