Viacom, CBS Ax Cross-Company Selling

EXCLUSIVE: Viacom Plus Will No Longer Deal With Broadcast Net's Inventory

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NEW YORK ( -- CBS and Viacom are giving up joint custody of Viacom Plus.

Dealing only with Viacom assets
Finding it tougher than expected to straddle the cross-selling unit across two publicly traded companies after the split of CBS and Viacom almost a year ago, the unit will no longer sell across CBS properties and will instead focus solely on Viacom's assets, according to a few buyers familiar with the plans. Though the unit will still exist, it will orchestrate deals only across Viacom's various platforms, which include cable TV, online, gaming sites and events that target almost every demo from kids to baby boomers.
Exec VP Lisa McCarthy
Exec VP Lisa McCarthy Credit: John Filo

When Viacom split into two separately traded public companies in January, much of the talk revolved around whether it signaled the end of the cross-media deal. But Viacom Plus emerged intact. According to public filings, the unit's executives would remain employees of the new Viacom, but would be required to consult with CBS for all personnel decisions, and CBS would reimburse Viacom for 50% of the cost of compensation and benefits for Viacom Plus employees. The filings also said that either CBS or Viacom could opt out of support for Viacom Plus with six months advance written notice to the other.

Lisa McCarthy
Shortly after the split, the group announced an eight-figure pact with Masterfoods that spanned 24 assets across CBS and Viacom. Exec VP Lisa McCarthy told Ad Age at the time that buyers needed to know her group "still had the knowledge and access that we had in the past."

A Viacom spokeswoman had no comment, and Ms. McCarthy did not return calls. CBS also declined to comment.

At the time of the split, buyers seemed to feel that it was business as usual. But one buyer said lately there has been a bit of tension between Viacom Plus and the on-the-ground sales people for CBS. The buy-side consensus was that moving the unit to a single public company made more sense.

"I love working with them, so from that standpoint, I'm disappointed," said Peter Gardiner, partner-chief media officer, Deutsch. "But the good part is it won't be the cloudy mess of CBS is one company, Viacom is another."

What about CBS?
It's still unclear whether the changes will benefit marketers whose multiyear contracts with Viacom Plus include CBS assets and how those deals will be handled moving forward. For a few advertisers who counted on the unit to pull in big pieces of CBS, it could be problematic. But, Mr. Gardiner said, "a lot of deals we did with Viacom Plus didn't include CBS, so the various band of [Viacom] assets, if pulled together by smart people, could be a very good thing."

Added Mark Gibson, assistant VP-advertising at State Farm: "Regardless of how they want to operate their business units, there's always a benefit when we can see a seamless opportunity to integrate the buy. You create more impact and ultimately get a better share of spend. We've used [Viacom Plus] and we like it."

Unit's early success
Viacom Plus was formed in late 2000 as a way to drive incremental ad revenue through cross-media deals after the merger of CBS and Viacom. And, for the most part, it worked. One of its most touted successes was with Procter & Gamble Co., with whom it did a monster $350 million deal in 2002. Several of P&G's more momentous TV ad deals -- including its first-ever Super Bowl spot in 2004 and its "Survivor" brand integrations -- came through Viacom Plus. In fact, P&G spent at least a quarter of its measured media in 2005 on Viacom Plus assets, not including CBS's radio and outdoor properties, according to TNS Media Intelligence.

At the time of the split, the unit was estimated to be contributing about $600 million, or 4%, of the Viacom's total pre-split revenue.

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Jack Neff contributed to this report.
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