Crossroads for cross-platform deals

By Published on .

To advertisers and agencies, media companies are looking more and more like supermarkets. The big question is: Who's getting the better deal, the shopkeeper or the customer?

A media mammoth like the newly approved AOL Time Warner might be likened to the Albertson's of the industry, its shelves abundantly stocked with competing TV stations, radio channels, print publications, Web sites, content providers and even syndicators, all under one roof. Theoretically, an advertiser like Procter & Gamble Co. could metaphorically wheel a cart down the aisles and pick out the products it needs to nurture its family of brands.


In the biz, they call this "one-stop shopping," "cross-platform selling" and "integrated marketing." That means marketers now can place most of their advertising through one media company, rather than sprinkling their dollars among a slew of independent storefronts. Media giants are using cross-platform pacts to snare a bigger share of multimillion-dollar ad budgets, though the marketers doling out those dollars aren't necessarily enjoying bulk discounts from the deals.

At a venue like NATPE, this trend means an agency executive could visit a media company's syndication booth and end up being offered a variety of opportunities in other media outlets as well.

The big media companies are starting to launch internal "cross-platform services" designed to help marketers decide where they can place their ad dollars within these superstores.


The first service on the scene was Turner Broadcasting System's Solutions Group, which claims to have put together 50 cross-platform deals since it was launched in 1994. CBS Plus was formed in 1998 and was recently renamed Viacom Plus after Viacom acquired CBS; it claims to have put together about 14 deals. Walt Disney Co.'s ESPN ABC Sports, which focuses on sports marketing, was created in 1999 and claims about 15 cross-platform sells. ABC Unlimit-ed was formed in 2000 and announced its first deal in Novem-ber.

"The basic premise has been to use all our assets to solve a marketer's problems or to meet its objectives," says Joe Mangione, senior VP for Turner Broadcasting's global client Solutions Group. "What that means is that this is not just aggregation of media-it's looking for creative solutions in terms of programming, promotion, marketing programs that allow us to integrate the marketer's message and get it closer to the consumer than just a 30-second spot."

Turner operates 17 media companies, while parent AOL Time Warner runs about 150 operations in TV, radio, publishing, video, cable and satellite, film music, and new media.

"There's virtually not a home in America that we can't touch in some way, shape or form," Mr. Mangione asserts. "We can marry a client's needs to assets within Turner Broadcasting and then we go work closely with our counterparts and colleagues at Warner Bros. or Time Inc. and to see how we can integrate their assets and properties into a deal."

Those assets grew, and greatly expanded in the online arena, with the merger of America Online and Time Warner, Mr. Mangione says.

The benefits for a media company are obvious: the numbers. Cross-platform deals allow big media to corral and ride the multimillion-dollar ad budgets of giant marketers. The benefits to advertisers, however, are not so apparent. There are no bulk discounts available in the arrangements.

"It's not about discounts," Mr. Mangione says. "It's about bringing incremental value to a relationship. This is about us bringing the right, smart ideas to the table."


"We are looking for communication value in these deals," says Mickey Marks, exec VP-general manager of Creative Media, New York, who recently arranged a cross-platform pact with Beck's North America's Beck's beer at ESPN ABC Sports. "You need to go into it looking for values, but these are not monetary-they are strong communications values for the client's brand. We are trying to form alliances with media brands for our clients."

Irwin Gottlieb, CEO of WPP Group's MindShare, does not agree that there is a lack of bulk cost savings.

"If you are the seller, you are trying to package stuff in a way that you can extract more for the inventory. Or you package certain things that are harder to sell with other things that are easier to sell," he says. "If you are the advertiser, you are looking to put together inventory across multiplatforms and get it at a lower price, not at a higher price. In any buyer-seller relationship, one side is looking for more and the other side is looking to pay less."

TV-based media companies have always worked almost exclusively with media agencies, while AOL and many other online companies have sales organizations that deal directly with clients. Will mergers between new and traditional media companies and the cross-platform selling services they will offer eventually supplant the role of the media agency? Will clients be able to work directly with media companies to develop integrated plans, thereby avoiding the commissions paid to media agencies?

"No," Turner's Mr. Mangione says. "Agencies play a critical role in this. Their creative strategies help us understand what the client's needs are. And we are ultimately going to negotiate the media deal with them to make sure it is efficient for their clients, too."


The job of media companies' cross-platform sellers is not an easy one. First they must persuade media agencies and their clients that these integrated packages are a benefit. Secondly, and perhaps more difficult, they must persuade internal divisions within a media company to work together rather than individual units greedily pursuing ad dollars on their own.

"One of the things that has delayed the maturation of these cross-platform sales organizations is resolving the internal issues," Mr. Marks says.

One ABC executive, who requested anonymity, believes the most senior executives at media companies, such as Walt Disney Co. with its ABC Television Network, need to send a message to all their divisions to make sure they work together. He says Disney Chairman Michael Eisner is doing just that.

Executives at ABC Unlimited are so confident they can resolve internal conflicts among their division ad sales chiefs, while also convincing advertisers of the viability of the cross-platform model, that they say cross-media selling will become a major piece of national TV advertising.

Most Popular
In this article: