Turns out, the most attractive aspect for marketers are often those type of plums that media companies came up with as a way to justify selling a package of media properties held together by nothing more than a corporate name.
The mammoth multimillion dollar cross-platform deals Big Media hoped consolidation would reap haven't quite materialized-a fact punctuated by Chairman Sumner Redstone's weighing a move to split Viacom's assets into two companies. While his proposal is driven primarily by financial motives, it does beg the question of why cross-selling never delivered on its promise.
Viacom Plus, which made such monster deals as a $350 million buy from Procter & Gamble Co. in 2002, brings in less than $600 million a year, or 4% of Viacom's revenue, according to several insiders familiar with the division. (Viacom Plus executives said it's well north of $600 million.) As one senior media-buying executive put it: "If you were an alien dropping in from another planet and read the trade press here, you'd think those cross-platform deals in big media companies accounted for 90% of all ad sales. But really, less than 10% is done on a cross-platform basis."
"Cross-platform buys are driven by consumers. So we can do a cross-platform buy that includes CBS and a Time Inc. The consumer doesn't care or know who owns the assets,"said Charlie Rutman, CEO of Carat USA.
Media buyers want to pay less for these deals, and media sellers want to charge more. The solution? Come up with brand integrations that marketers only get if they place enough of their budget with your company. Mel Berning, who is now head of ad sales for A&E Television, worked major cross-media deals for Kraft and P&G as former president-U.S. broadcast at MediaVest USA. "It's really about creativity and how creative these organizations can be, not necessarily how big they are but how creative they are," he said.
Under Mr. Redstone's plan, Viacom executives said it will continue to be a one-stop shop, selling assets. Co-Chief Operating Officer Tom Freston would lead the cable and movie assets while Co-Chief Operating Officer Les Moonves heads the broadcast networks, radio and outdoor assets (see chart above). Viacom Plus Exec VP Lisa McCarthy will continue to report to both.
But analysts and media buyers are left wondering how, exactly, Viacom will align two separate companies behind one of these deals when each is answering to a different part of Wall Street. And the reality is, marketers have figured out how to get branded-integration deals without the cross-platform sellers.
"You just have to know to ask for it. Those in the marketplace negotiating know to ask for it," said David Sklaver, president-East Coast operations at KSL Media.