Westinghouse CEO wants to go right to advertisers
CBS' new owner has an ominous message for ad agencies: The network is going to deal more directly with advertisers.
"I think we've gotten into a buy-sell auction relationship" with agencies, said Michael Jordan, chairman-CEO of CBS parent Westinghouse Electric Corp. "Instead of thinking of the media buyers as our customers, it's really the sophisticated advertisers who should be the people we should be working very closely with."
AGENCY EXECS' RESPONSE
Agency media executives agreed with Mr. Jordan's point--made last week in a keynote speech at the annual Schroder Wertheim/Variety conference in New York--that the network should develop more marketing ideas, but they believe CBS should still go through the agencies.
"You won't find a big argument from anyone in the advertising business that a network should start thinking marketing," said Page Thompson, U.S. media director at DDB Needham Worldwide. "Their problem is that they're calling on buyers, not planners. The buyers and the network sales staffs have developed this [low cost-per-thousand] mentality."
PLANS THAT `FALL FLAT'
CBS and the other networks have implemented plans to deal with planners, Mr. Thompson said, but "they just put one person on it and it falls flat on its face."
Agreed Jon Mandel, senior VP-director of national broadcasting at Grey Advertising: "I have no problem with CBS going to a client. But the client is going to then ask us, and we're still going to impact the buy. The problem with CBS is their programming. Get their programming fixed and they will get bought."
The dilemma Mr. Jordan faces is one that has haunted CBS for years: Its audience skews much older than the 18-49 demographic still coveted by advertisers.
Mr. Jordan, who spent 18 years at PepsiCo earlier in his career and is comfortable with marketing issues, said his chances of convincing a "media buying head of an agency" that CBS' older audience is a valuable asset are about as great "as my jumping as high as the other Michael Jordan."
That belief led to his conclusion that CBS must work more directly with advertisers to develop marketing programs.
REASSURING THE AGENCIES
After his speech, Mr. Jordan told Advertising Age: "We're not trying to ease out the ad agencies or the media buying groups."
But he also reinforced his earlier point, saying that for example, "We have had this long-term relationship with Procter & Gamble, and you get a lot of ideas having lunch with [P&G Chairman-CEO] John Pepper, who's a friend of mine."
During his speech, Mr. Jordan also added a controversial twist to the reason advertisers were willing to pay a premium to buy into CBS' NCAA finals coverage.
"What you probably don't know," he said, "is that advertisers don't pay us that money at CBS because they think it drives greater brand recognition and greater sales. They buy our advertising so they can get in-store promotion and display support."
That's only partially true, said Mr. Mandel, who added: "I would suggest that Mr. Jordan spend more time with the advertisers and the agencies."
Mr. Thompson was less generous: "That is absolutely not why advertisers buy the NCAA. Advertisers buy it because of the audience it reaches, the impact it brings to our advertising in recall and association with the top event. But if you try and sell the NCAA on [just marketing promotions] and don't think there is any value in the NCAA in generating awareness and reaching target consumers, you're going to miss the boat."
Copyright April 1996 Crain Communications Inc.