As TV's prices soar, big buyers try new things

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Here are three seemingly unrelated events.

* First, a rumor that swirled around the Association of National Advertisers conference hotel in October: The last :30 in next January's Super Bowl had just sold for $3 million to a dot-com -- roughly double the going rate.

ABC's head of sales, Marvin Goldsmith, said the rumor was "wrong on both counts. It wasn't a dot-com and it wasn't the last unit."

* Then, a mystifying announcement from Unilever: Henceforth, media strategy will lead the advertising development process.

Will lead? Since when does media lead anything?

* Lastly, an inscrutable statement from Procter & Gamble Co.: Agency compensation will be based on brand performance and will be media neutral.

Media neutral? Since when do P&G agencies dream in anything but living color?

These seemingly unconnected events chart TV's bumpy future. Like land in the Hamptons, it has become too dear for the natives. P&G and Unilever, the marketers that invented slice-of-life, see a time when they won't be able to afford it anymore.


On this bleak canvas, the two announcements make perfect sense. Media strategy must be set before creative work begins or Unilever brands will get TV commercials -- regardless of the final media plan.

P&G's performance-based compensation tells the agency "TV won't make you rich and famous anymore." Indeed, thinking TV when the brand is going elsewhere will cost you -- because TV concepts translated into other media make less sales-effective advertising.

Unilever and P&G are pushing different buttons and telling their agencies the same thing. Take other media more seriously because we can't continue to spend most of our budgets in TV.

The networks will argue TV is a demand-priced medium. That current pricing-levels will drop in a cooling economy and bring packaged-goods dollars roaring back.

Perhaps. But don't bet on it.


For decades, TV has been the cheap bread of advertising, so abundant that other media were condiments. The real threat to TV is this: If packaged-goods brands are forced to use other media, they will learn to use other media, and mix of media will become a more effective alternative to mostly TV.

This is not a discontinuity. The growing interest in media-mix is simply another stage in the transformation of advertising that began five years ago with "recency" planning.


When "recency" established reach as advertising's primary media goal, prime time had already become too costly for most brands. Fragmentation and optimizers suggested a different path. Advertisers could buy reach, cheaper, through dispersion. Media-mix is a continuation of that dispersion strategy, expanded now to other media.

But the decline of TV has been the whip for more rapid change. In the face of strong demand and shrinking inventories, the networks have raised prices and added commercials. Both make TV less effective. Advertisers know this and want options.


The movement of major dollars to other media is becoming evident and the pace will speed up when media-mix optimizers arrive. Two are already in the works from SuperMidas and IMS, and hidden in the SuperMidas specs is another wake-up call. The agency "A list" for media-mix are TV, magazines and the Internet.

Smart agencies foresee the "mass-media-ization" of online -- the re-introduction of the banner as a standard advertising unit -- as in TV :30, magazine color page, Internet banner.

Online advertising sellers realize they blundered when they bet their future on the value of interactivity. This positioned the banner, their most plentiful cash crop, as a means -- something you click on to go somewhere else -- and gave little value to the banner exposure as an end-in-itself. They have been playing catch-up ever since.

Click-throughs work well for cherry-picked advertisers on prime real estate (a bank banner on America Online's personal finance page is dandy). But those are exceptions. Interactivity is not a good ad-sales model for Internet sellers because prime real estate is scarce, and run-of-site click-throughs average far less than 1%.


A TV exposure model for selling banners based on old-fashioned targeted rating points (TRPs) -- targeting, reach and frequency -- is attractive to sellers and seductive to buyers. What mainstream media shop wouldn't kill to steal Internet planning and buying back from the ponytails?

So three seemingly unrelated events and the Internet chart the bumpy future of TV. It once was the cheap bread of advertising. Now the big guys are saying they can no longer live by bread alone.

Mr. Ephron is a media consultant and partner at Ephron, Papazian & Ephron, New York.

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