TV optimizers are the highest expression of technology in media. They search the immense Nielsen TV ratings database for daypart or program combinations that increase target reach (or reduce the cost of buying it). Optimizers came to sudden prominence in 1997 as an important element in the Procter & Gamble Co. review for TV agency of record. But 1997 was the right time for optimizers for other reasons.
Recency, the idea that advertising works with people who are ready to buy the product, was establishing target reach as the priority planning goal for advertisers. Prime time, the reach daypart, was becoming too costly for many of its brands, forcing them to buy reach through dispersion in cheaper dayparts--while fragmentation had already created a chaos of dispersion alternatives, far beyond the ability of a buyer with a notepad to handle.
Enter optimizers. The special-purpose tools for sorting it all out.
The first optimizers to arrive, Supermidas X*pert and SpotOn, were developed overseas and modified for the more complex U.S. market. They were promoted by the P&G agencies (Televest, Starcom Worldwide, Zenith Media), which had been forced to invest in them, and soon became an essential, but costly, new business tool.
MEDIA BUYERS RESIST
Priced at $20,000 to $50,000 a year, plus the cost of data and setup, larger agencies bought them. Today, there are only 30 or so agencies with reach optimizer programs but they place 80% of national TV dollars. In short, optimizers are a tool at the top.
That's where they started. P&G brought in optimizers for buying, linked to the idea of tactical planning. Here buyers use optimizers to create the TV mix as they negotiate the buy. The idea is to buy reach more cheaply by negotiating around high-cost dayparts and suppliers. This "optimizers for buying" approach has not caught on.
It requires buyers to learn optimizers--an assignment they resist. It makes buying cumbersome--especially with the time pressures of the upfront. Reach and CPM goals are not always compatible. The highest reach for a budget may come in at an uncomfortable CPM. And it messes up compensation by shifting some planning duties to the buying agency.
Using optimizers in buying means changing things, so they have been happily shipped to planning.
PLANNERS EMBRACE OPTIMIZERS
Nielsen's limited software and high pricing made optimizers a planner's dream. Optimizers opened a door to the Nielsen Television Index database and provided unlimited custom analysis for a single fee. Planners and researchers discovered they could afford to learn more about TV with these tools. They could investigate complex viewer targets. They could examine co-viewing and circumstance of viewing. They could study the viewer and duplication patterns of programs, dayparts and networks and determine how many targeted rating points in a venue is enough for a brand. And how many are too many. Because of optimizers, large agencies have learned more about TV in the past three years than they had in the last 30.
Unless Nielsen software improves vastly, agencies will continue to use optimizers as much for analysis as for optimization.
THE NETWORK RESPONSE
Optimizers were introduced as a threat to the broadcast networks. They weaken daypart planning, forcing sellers to compete on cost-per-reach-point. This hurts low-reach dayparts such as daytime and helps low-cost dispersed venues like cable.
At first, the networks responded by trying to use optimizers to reach-package their own inventories but soon discovered that no seller controls enough inventory to be a "must buy" for reach.
They now have shifted their efforts to measuring "exposure value"--each group arguing a slightly different case. The volume of exposure value research being showered on TV buyers in anticipation of the upfront is unprecedented.
* The broadcast networks are using a program interest measurement Nielsen calls "quads," which is a tabulation of program episodes viewed (loyalty) and telecast minutes viewed (interest) to show the greater value of higher-rated programs.
* CAB has sponsored a Nielsen Media Research commercial recall study comparing broadcast with cable.
* American Movie Classics has commissioned a "clutter study," designed by Myers Research and executed by PreTesting Co., to show differences in commercial recall when typical six-position pods are compared to isolated commercials.
* The Weather Channel hired ASI to study commercial recall, TWC vs. broadcast.
* Tandemar Research is fielding a "quality rating points" study that uses near-coincidental recall to measure commercial attention by program.
Our cup runneth over.
The optimizer legacy
Optimizers have helped restrain rapidly rising TV costs by encouraging advertisers to use all of TV. Yet prime-time CPMs were up 14% last year.
Optimizers have almost gotten us out of the trap of budgeting by daypart, which has in the past driven up the price of TV. They have shown advertisers that reach is the product of dispersion, not high ratings. But perhaps most important, optimizers have tied planning more closely to buying. They have shown the value of knowing the market price when planning a buy. And the value of understanding reach when buying a plan.
Buyers have learned to think more like planners because today what they buy is as important as how well they buy it. And optimizers have pushed buyers and sellers to try to measure the exposure value of different kinds of TV.
Where have optimizers gone? There has not been an optimizer revolution. No Robobuyer, forever changing the balance between Good and Evil. But optimizers are very much with us in the form of smarter buyers, smarter planners, better tools and many of the right questions.
Mr. Ephron is a partner in Ephron, Papazian & Ephron, New York (firstname.lastname@example.org). This article was adapted from a presentation to the Association of National Advertisers 2000 Television Advertising Forum.