Old Medium Learns New Tricks
NEW YORK (AdAge.com) -- One of the first deals made in this year's upfront TV advertising market is for a show with no traditional, 30-second commercials. MediaVest has bought all the sponsorships in the CW's new Sunday-night trends program, "CW Now," for the entire year.
MediaVest clients, including top advertisers Procter & Gamble, Wal-Mart, Kraft, Masterfoods and Activision, will be integrated into segments of 'CW Now.'
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The network plans to air "CW Now" without commercial interruptions. Instead of buying spots, MediaVest clients, including top advertisers Procter & Gamble, Wal-Mart, Kraft, Masterfoods and Activision, will be integrated into segments of the show dealing with topics such as what's hot in music, beauty and fashion to reach the fickle 18-to-34 demographic.
The agency's embrace of a show without commercials reflects the changes wrought on the TV advertising market by digital video recorders, which let viewers fast-forward through spots. Networks and advertisers are turning to product integration and sponsorships as ways to connect with consumers.
Shift in measurement
A shift this year in how audiences are measured -- focusing on how many viewers watch commercials rather than shows -- is giving networks fresh incentive to look for new forms of TV marketing and adjust commercial breaks to keep viewers tuned in.
"This was the perfect opportunity to take an innovative approach to really connect with our 18- to 34-year-old consumer, but not through the traditional commercial pod," said Donna Speciale, president-investment and activation at MediaVest. MediaVest has been working on nontraditional ways of delivering ad messages on TV.
"This is now the ultimate test: bringing it to life and working with it for the next year and bringing a new type of ad model to the forefront," Ms. Speciale said.
At last year's upfront, CW touted "content wraps" as a way advertisers could keep viewers tuned in during breaks. Sponsors are integrated into the wraps, which are bits of interstitial programming that appear during commercial breaks. According to the CW, as many people watched the content wraps as the shows themselves.
The network aired about 20 content wraps last year. About six of those were a format MediaVest created for its clients called "CWH: C What's Hot, Happening and Hip."
"CW Now" grew out of that format. As part of the deal, the show will be co-produced by the CW, the producers of "Extra" and MediaVest's branded-entertainment division. "CW Now" focuses on celebrity gossip, fashion and lifestyle trends for young viewers -- the ones who are getting harder to reach because of their DVR usage.
Ms. Speciale declined to provide financial terms of the sponsorship, but said it is separate from an overall upfront deal for other programs on the CW.
"I think it means we're innovative and willing to try new things with our advertising partners," said Bill Morningstar, exec VP-ad sales for the CW. "The world is changing, and we're trying to get ahead of the future."
He said the network and MediaVest had been talking about the show since development meetings in March, but a deal didn't come together until after the CW's upfront presentation on Thursday.
Buying won't start right away
Most buyers last week said the move to commercial ratings means most ad buying won't start until after Memorial Day, when the new ratings will be available. Those ratings probably will form the basis of ad deals this year, network executives and ad buyers said.
"Anyone who is looking to commit their clients' money before the official numbers are released at the end of the month by Nielsen is a little silly," said Bill McOwen, director of media investments for MPG.
Last year, the market was hung up for weeks because the networks wanted to count DVR viewing and clients did not. In the end, advertisers committed to about $8.4 billion in commercial spending.
Counting DVR playback
This year the networks are more insistent on counting DVR playback, and the availability of commercial ratings should make the process smoother because ad buyers will be able to tell their clients they're paying only for viewers who actually see their spots.
"This year there is a measurement available of people who are truly watching the commercials, and that looks pretty much like it will be currency," said Jon Nesvig, president of ad sales for Fox.
JoAnn Ross, president of ad sales at CBS, said her network was basing its pricing on ratings that include live viewing plus three days of delayed viewing. Mike Shaw, president of sales and marketing at ABC, also thought live-plus-three would be the most popular currency.
But not all advertisers are sold on the new system.
Still prefer live
Mark Kaline, global media manager for Ford Motor Co., said he wasn't sure he was comfortable with commercial ratings that include DVR playback. "I'd like to get as close to live as possible," he said.
Mr. Kaline said he would be seeing how much the price of commercials changes as more playback is included.
A single ratings stream isn't likely to be best for every client, Ms. Speciale said. "No one should say I have to be in that box or doing what everyone else is doing," she said. "It's got to fit the client's need."
But one network executive said while the difference from one data stream to another for a client would be small, for a network, it could spell the difference between a profit and a loss.
Time for transition
With live ratings down sharply this season, partly because of faster-than-expected DVR penetration, there is likely to be little difference between commercial ratings plus playback and live program ratings, according to David Poltrack, executive VP of research and planning for CBS. That makes this year a good time to make the transition, he said.
Waiting out the networks was a successful tactic last year in keeping media price increases relatively small. While the networks this year expect clients paying high prices in the last-minute scatter market to move more money into the upfront, buyers still expect overall spending to be flat to down as clients spend more of their money on new media.
Several buyers said many of their clients have not yet provided them with media budgets. "There's no need to rush," one buyer said. "This way we're buying closer to the fourth quarter, which is when it should be."
Important part of media mix
In their upfront presentations in New York last week, ABC and Fox stressed that TV is still a very important part of the media mix. "The most important decision you're going to make this year is how much television you're going to buy," Mr. Shaw said.
But the networks also know that clients want more than old-fashioned commercials from them. "You're looking for a media partner who is foremost a marketing partner," said Mike Pilot, president of sales at NBC Universal. "You're looking for a more upstream, collaborative, two-way relationship, where we understand your marketing goals and you have more insight into ours. You're looking for new ideas, better metrics, more accountability and a seat with the creatives."
Mr. Pilot is new to the TV business, having joined NBCU from the equipment-finance division of parent GE only five months ago. His message was well-received. "He did very well," said Irwin Gotlieb, CEO of GroupM.
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Jon Lafayette is a reporter for Crain Communications' TV Week.