As the most mature TV advertising marketplace, the U.S. has prided itself as having the most sophisticated TV planning and buying systems.
Europe-particularly younger TV markets-and the Asia-Pacific region, however, claim to be more advanced. Executives there argue their buying systems were developed around state-of-the-art information technology.
OLDER, BIGGER MARKET
With myriad viewing options and about 96 million households, there's no doubt the U.S. market is older, bigger, more competitive and vastly more complicated than perhaps any other TV market.
But there recently has been a growing recognition that it no longer is the most sophisticated, especially in the management of TV schedules.
That awareness has created an opportunity for media services featuring new-to-the-U.S. systems, including Carat International's "optimization" effort. These Europe-born data-modeling structures provide clients with information that feature deeper insight than is generally available and, in at least one instance, can tie a media plan's effectiveness to a brand's bottom-line performance.
"The essential media planning problem is allocating a scarce resource, dollars, to achieve a maximum communication effect. That's the simple definition of optimization. And we now have computers to help us to do it," says Erwin Ephron, a partner of media consultancy Ephron, Papazian & Ephron.
While the systems can be a boon to optimizing advertising budgets against advertising goals, Mr. Ephron notes that the key to their success is in knowing "what it is you want to optimize. Are you optimizing the reach of an advertising buy? Or, are you optimizing the reach against a set number of frequencies?"
OPTIMIZERS SET THE TABLE
In overseas markets, optimizers determine how the final schedule will look based on the number of spots needed to achieve a plan's goals, the costs of buying the spots and the actual audience delivered by those spots, says Joanne Burke, director of worldwide media research for New York-based Carat MBS, a unit of Carat North America.
Carat is one of the leaders in not only optimization system, but in bringing such operations to the U.S.
To understand how these systems operate, one must first understand the differences in how TV plans are developed and executed in the U.S. and overseas, Ms. Burke says.
In the U.S., she says, many "disconnects" occur between the creation of a plan and the ultimate purchase of a TV schedule. The resulting schedule often may look nothing like the original.
In overseas markets, Ms. Burke says optimizers determine how the final schedule will look based on the number of spots needed to achieve a plan's goals, the costs of buying the spots and the actual audience delivered by those spots.
"You have to envision it as the old game of connect-the-dots," she says. "To execute the plan, you need to connect the right combination of spots. What the optimizer program essentially allows you to do is to connect the spots."
While most of the Carat units use optimization systems, the media-buying network has its own internal consultancy and research and development company, known as Carat Insight.
That unit was created specifically to develop new systems for measuring and tracking the effectiveness of not just media buys, but advertising campaigns.
The first level is a proprietary system called Carat Research Awareness Model, which enables Carat's media planners to track the awareness curve generated by ads.
By altering media schedules, Carat planners can manipulate the shape of this curve to control the peak of advertising awareness and see how long it is sustained.
The system also enables Carat to determine when creative wears out and needs to be replaced, and at what point continued media spending begins to generate diminishing returns.
A second system known as Foretel is based on a proprietary study that periodically surveys TV viewers to determine which shows and advertising placements generate the greatest level of attention for media buys. Carat conducts the surveys three times a year in the U.K. and has similar studies in other markets.
"We've got a big database now of what shows people pay attention to. Our media plans are based on buying against the shows people are paying attention to," says Blackett Ditchburn, deputy managing director of Carat Insights, London.
The last and perhaps most sophisticated system in Carat's arsenal is Carat Track, a proprietary economic modeling system that enables Carat media planners to identify all of the variables influencing a media plan's effectiveness. Carat Track measures the effectiveness against profit-related measures, such as sales results.
Carat recently acquired U.S.-based Media Marketing Assessment, which provides similar models in the U.S., and is believed to be integrating it into its media-planning systems.
Although optimization systems may not be as publicized as high-profile media topics such as TV program ratings, there appears to be definite interest in them.
Agencies competing for Procter & Gamble Co.'s TV buying assignment, currently under review, have been instructed to develop a plan for implementing an optimization system in the U.S.
Optimization systems first began in the U.K. when that nation's TV ratings authority, BARB, began giving third-party analysis companies access to its raw respondent-level data. Today, there are two popular off-the-shelf optimization systems used in Europe-Super Midas and X*pert.
The systems essentially work the same way, modeling raw TV data to determine the optimum mix for a given brand's needs. X*pert tends to be more daypart-oriented, while Super Midas is more program-specific.
Carat MBS is not the only agency in North America to develop optimization systems. Leo Burnett Co.'s North American Media Director Bob Brennan spent the last two years traveling to Burnett outposts worldwide, studying the best practices of media systems overseas with a plan of integrating them into the U.S.
"I had a real U.S. bias that we're at the top of the game-that is, that we are not. Many more markets around the world are more sophisticated than we are," concedes Mr. Brennan.
As a result, Burnett is believed to have become the first agency to implement an optimization system in the U.S. The agency is working with the Super Midas system.
Though Burnett's optimization system is operating in a rudimentary form compared to the level available in Europe, Mr. Brennan says the agency will upgrade the system as more detailed data on TV audiences become available from Nielsen Media Research.
Whatever ultimately evolves in the U.S., it's unlikely it will look exactly like the systems in Europe and other overseas markets.
For one thing, the U.S. TV marketplace is fundamentally more complicated, with many more TV buying options and styles of doing business. The U.S. marketplace also does not currently have the same access to respondent-level rating data.
But Nielsen hopes to have such detail available in early 1998. If that happens, the so-called optimizers could see their business potential mushroom.
"Most agencies look at media as a component of advertising. What we're doing is