In its New York office, which pulls in nearly all its national TV advertising dollars, Walt Disney Co.'s ABC Television Network will divide itself into four teams with leaders who will have overall responsibility primarily for eight major media-buying agencies. Together, the agencies-Aegis Group's Carat North America, Bcom3 Group's MediaVest Worldwide, Cordiant Communications Group's and Publicis Groupe's Zenith Media Services, Grey Global Group's MediaCom, Interpublic Group of Cos.' Magna Global, Omnicom Group's OMD USA and WPP Group's MindShare and Media Edge-control 90% of the TV ad dollars spent with ABC, according to network executives. All other New York office agencies will also be assigned to one of the four teams. The shift is effective Nov. 12.
"To me it is the ideal structure in today's world when you have a handful of buying groups. This puts the customer first. And anytime you put the customer first you are in a position to win," said Dan Rank, managing partner of OMD USA.
This move pushes to the forefront a cross-platform sales model. These slower developing deals, which have increased in frequency, enable advertisers to buy multiple TV dayparts along with radio, Internet, print, outdoor, theme park and film tie-ins.
In June, Disney struck a one-year $30 million cross-media deal with Toys `R' Us, its biggest cross-media deal to date (AA, June 18). But that's small compared with the wins of rivals: Viacom's Viacom Plus announced a $300 million deal with Procter & Gamble Co. (AA, May 7), and News Corp. News Corp. One snagged a $100 million deal with Tricon Global Restaurants (AA, June 4).
ABC's existing structure-similar to most other networks-is to have individual daypart divisions, such as prime time, daytime, kids and news, reporting directly to the president of the network advertising sales group. Each time a media agency strikes a deal, it must have separate conversations with each daypart division.
Increasingly, the daypart-by-daypart structure has become problematic-especially evident in this past June's upfront advertising sales market. For the first time, virtually all media agencies put most of their budgets up for negotiation at the same time-prime time, day, news, kids, and for some networks, sports. In addition, dollars spent in the scatter market-or quarter-by-quarter short term TV buying-are now negotiated this way.
With ABC's new model, a media agency will have one or two senior executives to go to for whatever dayparts it wants to buy. Reporting to each team leader will be six account executives to handle areas of kids, daytime, news, prime time ABC Unlimited and ABC Internet.
"This allows us to form and forge deeper and more meaningful relationships which will result in us understanding the prime core objective of the individual clients and brands that those agencies represent," said Mike Shaw, president-advertising sales and marketing, ABC Television Network.
"This gives them access to [cross-media deals] on a daily basis, rather than what is a much more convoluted set of meetings," Mr. Shaw said. "Because the nature of the business has become so short-term lately, our ability to turn on a dime, and put some time together in a relatively quick fashion, is now available to advertisers."
ABC's effort is in part a response to the pricing leverage of media agencies, which have gained clout through consolidation. In the early '90s, CBS put in place a similar structure with teams headed by leaders assigned to specific agencies. Mel Karmazin, now president-chief operating officer of CBS parent Viacom, abandoned that approach in 1999 and shifted the emphasis back to account executives, a system still in place today.
ABC's move also shows how the network is trying to revive its fortunes. ABC suffered this past upfront buying season, pulling in just $1.7 billion, down from the $2.3 billion the previous year. While the network was No. 2 in overall dollars brought in, it did suffer the largest year-to-year drop compared with other networks. One problem for ABC was a 20% drop in its adults 18-to-49 ratings. Virtually all four major networks felt the pinch, with pricing dropping anywhere from 3% to 9%.
ABC's new structure will split the former sales group in two: one group made up of the four sales teams focused on clients (advertisers and agencies), and the other focused on pricing, planning and revenue analysis. This second group will also have close ties to Stuart Bloomberg and Lloyd Braun, co-chairmen of ABC Entertainment Television Group, for efforts such as product placement in the network shows.
ABC will have four VP team leaders, who will also head up prime-time negotiation. Each of the teams will have account executives for prime time, daytime, news, kids, ABC Internet and ABC Unlimited, its cross-platform advertising division.
The team leaders are still to be named, but will report to new Senior VPs Gary Montanus, formerly senior VP-Disney Kids Network, and John Caruso, former VP-prime time, ABC. Both will report to Cynthia Ponce, now exec VP-general sales manager, formerly senior VP-news. Bill Bund, senior VP, ABC Unlimited will also report to Ms. Ponce, who will report to Mr. Shaw.