STATIONS & PLANNING;TRAVERSING NEW TERRAIN;AFFILIATION SWAPS SHAKE UP NEGOTIATIONS, ESTIMATES NEGOTIATIONS GROW MORE INTENSE; GUARANTEES TIGHTER

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The deal between New World Communications Co. and Rupert Murdoch's Fox network last spring was the TV industry equivalent of a great earthquake: the ground shakes and the landscape changes. Today, planners are still trying to navigate through the terrain left in its wake.

The agreement, in which New World moved its eight strong, big-market TV stations from the Big 3-primarily CBS-to affiliates of Fox, set off a chain reaction of network affiliation shifts. That has completely disrupted the national and, in many cases, local TV markets-making planning difficult if not impossible.

To date, affiliate switches have affected or will soon affect markets totaling about 40% of U.S. TV homes. In some markets, like Baltimore, every network station has swapped its affiliation.

This planning task might be somewhat mitigated, if all the swaps were apples to apples in their type of affiliation-switching from one Big 3 network to another, for example. But as in the case of the New World stations, some are switching from historically stronger affiliations to presumably weaker arrangements and vice versa.

The problem for many media planners and buyers is that few, if any, sellers see it that way.

"We have to make projections based on a realistic expectation of audience delivery. But the problem is that stations involved in a new affiliation all thought they would do better than they did before. Mathematically, that can't happen," says Peggy Howard, exec VP-corporate media director of Ackerman McQueen, Oklahoma City.

"I would have to say that most stations believe they have some upside, or at least they will remain the same," acknowledges Swain Weiner, VP-general sales manager of sales rep Katz American Television.

Ms. Howard says the disparity between what some stations and buyers have been projecting can be enormous, with discrepancies of as much as 30%.

"In a case like that, we try and use our best judgment in factoring the numbers downward. In those instances where we have done that, we have done very well," she says.

Most of the newly affiliated stations are reluctant to give away much of their upside, since advertisers don't pay extra for bonuses but usually get a ratings guarantee.

More significantly, the leverage in negotiating those estimates appears to be on the seller's side, because of a steady and increasingly tight national and local TV ad marketplace.

As a result, many stations are offering buyers tighter audience guarantees than they normally would, in exchange for accepting their higher ratings projections.

"Normally, they will guarantee that you will post plus or minus 10% on what you bought," says Betsy Burgeson, director of broadcast negotiations at Martin/Williams, Minneapolis. "In a lot of cases, especially in metered markets, stations are willing to guarantee you point for point."

While the extra insurance helps alleviate some fears about buying in the most volatile markets, that still won't help an advertiser get delivery on its media plan if makegood time, issued to an advertiser if the guarantee isn't met, comes after the period when the buy was scheduled.

Hence the need for extra scrutiny of local ratings, particularly in non-metered Nielsen markets that rely on the quarterly, month-long sweeps diary reports for their ratings estimates.

Although there has been one major sweeps conducted since many of the affiliation shifts transpired, it occurred in February and is considered anomalous because it's compared with the year-before period that included CBS' Winter Olympics coverage. Media buyers and sellers are eagerly awaiting the results of the recently concluded May sweeps, due shortly.

"The May book is the acid test for everybody," says Mr. Weiner.

In truth, buyers and sellers agree the volatility will be long term as other market affiliations change and as stations tinker with their programming-with some stations adding newscasts for the first time.

But Ms. Burgeson believes buyers should be particularly cautious about schedules placed to run around the actual switch period.

"The viewer confusion is most intense during the first three to four weeks. A lot of people just get sick of trying to find what they want, so they turn off their televisions. If you can avoid those weeks, you're better off achieving your audience projections," she says.

But that kind of flexibility may not be easily achieved, especially in a virtually airtight spot TV market.

Still, the name of the game is estimating and projecting. When the May books arrive, most markets still won't have much more than a snapshot-in-time to gauge their audience volatility.

To compensate for that, media planners are developing unusual systems for factoring the performance of non-metered markets, based on comparisons to the 33 Nielsen metered markets with overnight TV ratings. Some buyers are basing estimates in non-metered markets on the results from metered markets similar in size, demographics and region.

"It's not the best tool, but in some cases it's the only tool we've got," says Howard Nass, senior VP-corporate director of local broadcast at True North Communications' TN Media unit.

Mr. Nass says the process has wreaked havoc on TN's planning and buying department, and he estimates the extra steps have increased the agency's spot buying man-hours by 10%-to-20%.

Adds Ms. Burgeson: "It's increased the number of rounds of negotiation. The stations want to discuss every number. I would say in some cases, it is taking as much as three times longer to reach an agreement."

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