Starcom, Discovery Strike Minute-by-Minute Upfront Deal
Broadcast Networks Expected to Be Finished By Week's End
NEW YORK (AdAge.com) -- With the broadcast upfront expected to wrap up by week's end, and at least one major agency completely finished writing business with all networks, the first cable deal of the upfront has already been struck.
Starcom and Discovery executed the first minute-by-minute upfront deal across the group's 11 main networks, which include the Discovery Channel, Animal Planet, TLC and The Science Channel. The deal was the first to be based on exact-minute ratings provided Nielsen All Minute data, which became available to the industry at the end of May, and is the second transaction between Discovery and Starcom this year following a similar minute-by-minute deal for Discovery HD in early May.
'Make 'em sweat'
On the broadcast side, several parties on the agency and network sides believe business will wrap up by week's end. At least one major agency has written all its business, with several midlevel agencies getting ready to wrap up once clients have agreed on the most advantageous cost-per-thousand viewer metrics.
One buyer said CPMs, or the cost to reach 1,000 viewers, from ABC are higher than the 8%-9% reported earlier, in the 10%-12% range, with CBS and Fox still lingering in the lower double digits as well. Both Fox and ABC are expected to secure the majority, if not all, of their fourth-quarter inventory by week's end, with Fox haggling with some agencies for higher audience guarantees for mid-season shows such as "24." As one buyer put it, "My preference would be to sit on it and make 'em sweat."
Two buyers confirmed that while the CW is likely to wrap up early next week, its CPMs are currently in the high double-digits, thanks to the value the network is trying to prove in having the only African American-targeted shows on broadcast TV, despite a relatively low share. The studios and retailers are expected to secure their inventory first, said one buyer, with the rest of the categories to follow.
Automotive, retail and movies, the categories widely regarded to be the most affected by live-plus-three metrics due to the time-sensitive messages in their ads, are said by several buyers to be more open to the time-shifted negotiations as well. (Live-plus-three means viewers who watch the ads as many as three days after they air through use of a digital video recorder.)
More granular data have been requested by many marketers in recent upfront negotiations to more accurately reflect who's watching their ads. In broadcast prime time, the preferred metric this year has been a live-plus-three rating that includes average program minute data plus three days of time-shifted viewing. For the Discovery suite, a minute-specific approach made the most sense.
"Marketers expect a far greater level of accountability from their agencies and advertising partners than ever before, and we are thrilled to offer Starcom's clients the first opportunities across our top-quality platforms, backed by the most accurate data available," said Joe Abruzzese, president-ad sales, Discovery Communications. "In this way, we are taking a significant step forward in offering advertisers increased assurances of the value of their partnership with Discovery's brands and programs."
Added Starcom USA President-Chief Activation Officer Chris Boothe, "All of Starcom's performance, secured deals and research firsts in this space -- including minute-by-minute, TNS, TiVo and beyond -- have shown that more precise and accurate data is extremely advantageous to our marketers," he said. "We need to be able to approach different partners in different ways to find solutions to more specific client business objectives, and as such it's important that forward-thinking partners like Discovery can provide us with such precise, client-specific audience accuracy and accountability."
The deal also comes after a ratings upswing for the Discovery Channel, which scored a high-rated hit with its "Planet Earth" mini-series this spring, part of a total 10% increase in ratings among adults 25 to 54 over the previous year.
Christine Olson, VP-media director at Starcom, said Discovery was very familiar with the minute-by-minute capabilities prior to their deals with Starcom. "They'd done their homework on their end, so it's natural for us to come together to a place where we're all moving. So we thought, why not do this together at the forefront? The [data] also aligned really welll with our clients and what they were asking for."
Neither Ms. Olson or Mr. Boothe could disclose the marketers attached to the deal at the time, but said they were marketers who traditionally buy ad time on Discovery.
Mr. Abrusseze said the deal with Starcom accounts for a significant portion of his networks' overall inventory, with the rest of his upfront negotiations not likely to wrap up for another week or two. He said he is still speaking with clients to determine their preferred metrics, with commercial ratings, engagement and even program still being batted around as possible options.
Discovery's head of research, Beth Rockwood, said the live-plus-three measurement favored in broadcast prime could also have some significant application for certain Discovery programming. She said 10% of the audience for this spring's "Planet Earth" mini-series watched on a time-shifted basis.
"We are able to look at the average commercial minute, and everybody agrees it's fair to be paid for at least a portion of the time-shifting," she said.