NATPE '98: OPTIMIZERS MAKE SYNDIE BUYS MORE EFFICIENT: NIELSEN MEDIA RESEARCH DATA ALLOW AGENCIES TO COMPARE BUYS
One of the buzzwords these days is optimization, a computer-generated strategy for media buying. And the new buying systems could generate more revenues for syndicated programmers.
"If you're optimizing cost-per-reach to make your buys more effective, syndication will do well," says Kate Lynch, U.S. research director, Leo Burnett USA, Chicago.
Optimizer programs -- already popular in European markets -- use precise viewer profiles to help advertisers determine where they should be buying time.
The concept caught fire in the U.S. after Procter & Gamble Co. required all agencies, including Burnett, to devise some type of optimizer system to be eligible to compete for its $1 billion media review.
COMPARISONS EASIER TO MAKE
At the same time, Nielsen Media Research began to make respondent audience level data available. Broadcast data became available at the beginning of 1997; cable and syndication data only recently came out.
Before those data were available, optimizers were difficult to implement.
Now an agency can create an optimizer program based on a variety of targeting parameters. For example, many buyers expect the most common system to reflect a cost-per-reach buy.
Ideally, buyers will be able to program-in respondent level data about the national network broadcast shows, cable and syndicated fare -- and compare them.
"It [an optimizer system] takes away the barriers between syndication and network," says Julie Kantrowitz, senior VP-media sales for Warner Bros. Domestic Television Distribution. "Anything that makes this business more accountable is definitely a step in the right direction. We have high-rated shows that deliver very important audiences, and I think planners will see that it makes sense to purchase syndication vis-a-vis a network schedule."
Cable and syndication are expected to fare well against broadcast in this arena because they are usually less expensive on a cost-per-thousand basis. Advertisers that are focused on optimizing reach and unconcerned about dayparts -- and other factors -- will probably be more likely to buy cable and syndication.
This is especially true, executives say, if all one is doing is optimizing reach and deciding that a rating point is a rating point is a rating point, regardless of when and where a show is on.
MORE THAN NUMBER-CRUNCHING
"That means that `Xena' in syndication and `Seinfeld' on NBC and `Seinfeld' in syndication are all going to be automatically analyzed and compared by your optimization system," says David Marans, senior partner-media research director, J. Walter Thompson USA, New York.
Mr. Marans cautions that the system is not merely a number-crunching exercise.
"The planners will be able to put values on programs, dayparts, and such. So they'll be able to weigh other factors, such as the daypart it airs in, such as commercial clutter, such as ratings size and so on," says Mr. Marans.
Meanwhile, Time Warner's Turner Broadcasting Sales has been presenting "Media at the Millennium" to agencies. Its premise is that planners and buyers can meet their reach goals by substituting some cable programming for lower-rated broadcast network shows.
The Advertiser Syndicated TV Association says that syndicated programming could be substituted.
"You probably can [substitute some syndicated shows for network ones]," says Barry Fischer, Turner Broadcasting Sales' exec VP-marketing and research. "The issue is that as long as you disperse your announcements in a lot of programs, across a number of viewing sources, you are going to build reach."
Mr. Fischer says that as broadcast shows get lower ratings, reach increases on an all-broadcast buy.
"This is because if you keep trying to buy the same number of [gross ratings points] in smaller shows, whether it's in broadcast or cable, you can buy your reach. The thing is, to do it in broadcast, there's a tremendous cost," he says.
That's more good news for lower-cost cable and syndication. The issue is a complicated one, and advertisers still want to understand the differences between syndication and network buys.
For example, from the perspective of a media buyer, what is the difference between watching "Seinfeld" on Thursday night on NBC and then watching a different episode on the syndicated "Seinfeld" later that night?
"If you have eight minutes of commercial time in prime time, and 11 minutes per hour equivalent at 11 p.m. during the syndicated episode, every research study has shown that is a damaging environment for the message," says Mr. Marans.
Mr. Marans says there are other factors as well: "For example, the audience that is available in prime time versus late fringe is different in terms of heavy viewers versus light viewers. This we know from our own research, and it's a factor a client might want to factor in.
"The facile answer is that a `Seinfeld' is a `Seinfeld' is a `Seinfeld,' " he says.
He adds that JWT will put in other factors in its optimizer system to differentiate programs in different dayparts and by elements such as commercial clutter.
For certain agencies, optimizers might not change buying habits. The difference is that more accurate information will be analyzed by the computer, not the buyer. But Mr. Marans offers a caveat.
"Optimizers can be used in a completely wrong way if you just let the machines spit out the information. You can say you want a lot of reach, or frequency, and program your optimizers such, but that's not enough," he says.