What's Wrong With How We Buy National TV

TV Execs From Both Sides of the Table Candidly Discuss What National TV Buying Should Be, and How to Get There

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NEW YORK (AdAge.com) -- When the upfront finally moves this year, the seven executives who joined Ad Age for a roundtable discussion April 23 will each play a key role in the direction it takes.

Linda Yaccarino, exec VP-chief operating officer for Turner Entertainment ad sales/marketing and acquisitions, and Mel Berning, A&E Networks' exec VP-national ad sales, will spearhead the ongoing efforts to buy cable networks, specifically TNT, TBS and A&E, at a price more equivalent to that of the broadcast networks, now that they have ratings on par with network prime time. Joe Abruzzese, Discovery Networks' president-ad sales, and Dave Cassaro, president of Comcast Network ad sales, will make a case for why targeted cable networks such as Discovery, TLC, Animal Planet, E! and Golf Channel offer more value to advertisers looking for a more lifestyle-oriented media buy.

Photo: Christopher Lane

RIGHT MESSAGE, RIGHT TIME: (From l.) Donna Speciale, Andrew Hampp, Sean Cunningham and Dave Cassaro

Calling their respective bluffs will be Donna Speciale, chief investment officer of Publicis' MediaVest, and Kris Magel, exec VP-national broadcast director at Interpublic Group of Cos.' Initiative. The media buyers acknowledge broadcast's legacy role as the foundation of many brands' media budgets while still challenging their cable counterparts for better metrics and accountability. And Sean Cunningham, CEO of the Cable Advertising Bureau, will be equipping his network partners with new findings from a $3.5 million multiplatform media-consumption study about DVR and online TV viewing.

The following is an excerpt of their 90-minute discussion with Ad Age reporter Andrew Hampp and MediaWorks Editor Ann Marie Kerwin.

Ad Age: There's a lot of buzz this year about what the cable story is vs. broadcast -- why cable's continued growth in share of ratings means more dollars shifting and a higher CPM. How will that play itself out from a pricing standpoint this year? We'll start with the networks. Ladies first.

Turner Nets
Comcast Nets
Cabletelevision Advertising Bureau
Linda Yaccarino: Everybody's still in demand-assessment mode right now. But if you look at the continued migration of rating points in TV, if you're going to separate it by broadcast and cable, it would be continuing to go to cable, but also continue just to go to good TV. So your assumption would be that the dollars would follow, and if you add in the dynamic of the stressed economy, that the dollars should follow at an accelerated pace this year because of the efficiencies.

Joe Abruzzese: You're in the futures market with the upfront. You're buying next year. And the question I have is: Who will be in better shape a year from now, six months from now, broadcast or cable? And that's what's on everybody's mind. We have a good story. I mean, certainly with [Jay] Leno moving to 10 o'clock, that's not helping the broadcasters. The transition to digital probably doesn't help the broadcasters. And the migration of rating points seems to continue.

Donna Speciale: But let's just make a point about dollars, because we're all assuming that there will be lots of dollars in the upfront marketplace.

Kris Magel: Nobody's assuming that.

Ms. Speciale: I don't know if this is a year that you're going to see a flood of dollars going to cable, because budgets are going to be so off, proportional, to what's in the market.

Mr. Magel: We all recognized this growth. It's really not hard to see. The line chart is pretty obvious. So I don't think there's any surprise that dollars are going to shift from broadcast to cable this year or any other year. In the past, however, until very recently, the wholesale shift hasn't occurred because, frankly, those advertisers that have tried to do that and have done that, a lot of clients have seen significant business declines when they've done that. So they're afraid to give up something that they have seen impact their business when they took it away the first time. Now we believe that's diminishing.

Dave Cassaro: So what I heard was that a lot of advertisers who moved a lot of money out of broadcast into cable had bad sales results. Can you name one?

Mr. Magel: Mitsubishi. They had a terrible year, the following year, and they were back in broadcast a year after.

Ms. Speciale: It all is about the balance and the strategic balance as we get to this inflection point of the market. No one's saying abandon it. But I, for one, have never been in one meeting where a client has said moving their money to cable has deteriorated their sales results. But that's exactly what I think many in this room are focusing on. But it's taking their plan and putting the right message in the right program at the break at the right time -- very, very particular. Especially in the case of big cable, when you have the reach that a lot of big cable has, and you can marry it with the ability to be nimble, and do marketing and sponsorship. Quite frankly, broadcast does it, too, in a good way, but on a very sporadic basis. With the efficiencies doing it that way, I can't even think of one occasion that I ever had a client differentiate the results between broadcast and cable.

Photo: Christopher Lane

WHO WILL PAY FOR INTEGRATIONS?: (From l.) Dave Cassaro, Kris Magel and Mel Berning

Ad Age: Every year, when we report on the upfront, and there's still 10% to 15% ratings drops at the broadcast networks, we still hear them say we've got high single-digit CPM increases. Why are they still commanding price increases on diminished supply?

Ms. Yaccarino: History has proven, actually illogically, that you keep your parking spot. Whether it's fear, whether it's habitual, whether it's just in the DNA, that those weeks in May and June, it's this ritual that happens, and the price has become so exaggerated. If over the last five years you see over a 30% decline in ratings and over a 30% increase in CPM, there has to be some type of seismic shift, and that means saying no.

Ms. Speciale: We have to change the dialogue, because I kind of feel like it's cable or broadcast, and I just think we're buying national TV completely wrong. Let's start talking about behaviors. Let's start talking about more narrow targets. Why do I have to go buy you on adult 18 to 49, and then you just give me this hodgepodge of programming? Why can't I come to you and say, I want my male 18 to 24 who does this? And you may come to me and give me a whole slew of content that skews towards that target that I want to reach.

Sean Cunningham: Are there any of you who wouldn't do that?

Ms. Yaccarino: We don't have the metrics, but we have to figure out how to get there.

Ms. Speciale: This is why everybody loves digital so much, because it's so accountable, and it's more narrowcasting, and we can really get in. That's what we now need to start getting nationally.

Mr. Cunningham: In terms of targeting, marketers and agencies know so much beyond age/sex demographics about who they want to talk to, how they want to talk to them, what their unique favorites are, behavioral insights, what's the environment in which you can approach them and change their mind. And we don't have the precise census metrics that go down and that can measure things like mind-set and specific target behavior, but what we have again is the ability to look at a genre, and then within the genre, the type of programming to make some of those marriages.

Ad Age: What about all these new technology companies that are seeking to help you prove the efficacy of commercial creative?

Ms. Yaccarino: We've worked with a lot of technologies, including our own TVinContext. But one of the things you're hearing across the board [is], well, do you want to scale it? There has to be some type of consensus moving forward. But everyone has their isolated pods or their creative innovations. But one thing we're missing: We need [marketers and agencies] to partner, too. Where's the conversation that says, two upfronts ago we agreed to C3. And when I hand you a 6 rating for "The Closer," I'm putting at risk my entire network, because I'm not sure what your creative is going to deliver.

Mr. Magel: Are you really that worried about how many commercials perform across the entire freaking hour?

Ms. Yaccarino: How could you ask that question when the networks have taken on the burden of the creative performance of your commercials that we have no control over?

Mr. Magel: How many positions are going to your network promos?

Ms. Yaccarino: A lot less than they used to do.

Mr. Magel: I know. But how many?

Ms. Yaccarino: Twenty percent.

Mr. Abruzzese: Kris, let me jump in here for a second.

Ms. Yaccarino: Wait. Let him answer the question. I want to ask about your creative.

Mr. Magel: Our clients are doing a fantastic job with the creative.

Ms. Yaccarino: They are?

Mr. Magel: All of my clients' creative is very effective.

Ms. Yaccarino: But these are the same clients who didn't do well on cable.

Mr. Magel: You're talking about an average of ... how many commercial minutes an hour are on TNT right now? Probably 12 minutes or 15 minutes an hour?

Ms. Speciale: OK, stop. Stop, stop, stop. C3 -- here's a good thing that we actually changed a metric. We actually went somewhere. There was a lot of back and forth on whether we should start, and should it be two months later, or MTV didn't want to do it that quarter, and everything was going on. But the good news is, finally, we moved the Titanic, and we went to C3 to get a little bit more accountability. I'm not saying C3 is the end-all-be-all. It was a good step. Now, I don't disagree that there are creative issues that need to be addressed. But if we sat here and made every single issue perfect, we would never have gotten to C3.

Photo: Christopher Lane

NEED FOR SCALE: Linda Yaccarino

Ad Age: Another thing we're hearing with the rise of branded entertainment and the networks adding more infrastructure to accommodate integrated deals is the idea of the reverse upfront, which Unilever did last year. Is that something that makes more sense?

Ms. Speciale: We're seeing a continuation of interest, which is give me reach with relevance -- whether it's based in a scripted drama or it is a custom microseries or a custom commercial. But it really is increasing a much more holistic look at their whole communication plan.

Mr. Berning: You raise a really interesting point, though, about the appetite for taking on the cost of some of these integrations, the ability to pay a premium for unusual executions in branded entertainment. Because I sense, in a lot of places, there is some pull-back in terms of how many resources people might be willing to commit to this. And in terms of who's going to bear the cost of all of this.

Mr. Abruzzese: Clients have never said to me, "I just want it for cheaper." They say, "give me a good idea." And the most positive things that have happened, there are clients who say, "here are my five brands." And they've been so open about it. Here's who we're trying to reach. What have you got? Come back to me with something. It makes you smarter. It makes you think a little bit. And those deals are the ones that don't get cut. Our solutions group is probably 20% of our billing. And that's the most stable part of our company. But we work really hard for that. We can't take any more than that because we have so much ... it's our resources.

Ad Age: We're trying to get to a point where you can buy by audience, by program, whether its on TV or online. How far in the evolution are we of being able to actually track the audience and sell against consumption?

Mr. Berning: The stuff we've seen from Nielsen's three-screen study is great. That's the first time any of us are able to look at it from a single sample, and a lot of fascinating things are coming out of that.

Mr. Cunningham: We've been listening to the one-woman, one-man survey of their 24-year-old activity, and they're sitting there, and they're giving equal attribution to every screen. And what we found from a $3.5 million study, a landmark study that Ball State did, the video mapping study, is that right now in our evolution, even if you look 18 to 24, even if you look 18 to 34, you're talking about 4.5 hours of TV consumption and two minutes of internet video. Two.

Mr. Magel: The problem is there's a lot of anecdotal information around, a lot of bad information. And that, many times, contradicts what are really the facts. So ... the uncontrovertible facts are that we are making progress. The car may be moving, but we've got a lot of things going on. And it's progress. It's real good progress. And you know what? It needs to be better, because with the amount of money that people are spending on it, because it works, we need to prove it out a little bit. That's all.

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