Spot by the Year
TVB wants to help stations sell local time in annual packages
By Steve McClellan -- Broadcasting & Cable, 5/2/2004 8:00:00 PM
TV stations are experimenting with a new way to sell spot advertising through the Television Bureau of Advertising. The strategy is simple: sell local advertising time in the same way that advertising is sold in the national upfront market
Individual stations now typically hawk time in quarterly commitments, while national advertising is sold in yearly packages at guaranteed rates months in advance. Under the plan, TVB will serve as the sales agent for spot time sold in this year's upfront market—a handful of deals for now.
TVB President Chris Rohrs acknowledges that the plan will be anything but easy, given the coordination required of advertisers, agencies, stations, and rep firms. But, if companies decide it makes sense to buy spot advertising as part of a network upfront purchase, say station executives, there's no reason half of their national spot inventory—which would amount to an estimated $6 billion—couldn't be sold that way in future years.
If the pilot plan works, TVB would likely turn over the role to existing reps and not a single centralized sales source, says Jim Beloyianis, president of the Katz Television Group. For the buyers, that could mean dealing with seven separate entities instead of one sales department. But that's worthwhile, he argues, from a "leverage and reach perspective."
According to Rohrs, several agencies and advertisers have been receptive to TVB's pitch, although he declined to identify them, citing their competitive concerns.
The TVB floated a similar plan about three years ago, but it was shelved, in part because advertisers, networks, and stations were content with traditional selling methods. But now the time may be right to introduce another upfront alternative to buyers who were frustrated with last year's double-digit price hikes for network TV.
The cost of network advertising has soared to the point that many ad campaigns for a particular product on the networks run just six or eight weeks at a clip versus 39 weeks a decade ago.
With spot time, advertisers can also buy audiences and dayparts not available from the national networks, including time slots around local news.
Also with spot, advertisers can target specific markets, which may just be the strongest sales point, says Rohrs. "The research shows that every brand and every category has a distinct geographic footprint to their best sales opportunities without exception," he says. "It's not that you just put more weight into your best geographies. You do it in such a way that adds weeks of [advertising ] activity into your high potential markets."
Among TVB member stations, the reaction is mixed. One key difference for stations: They would now be required to offer upfront advertisers guarantees—in writing as part of the buy—for a minimum audience level within a target demographic. Stations typically don't offer formal guarantees but usually offer some remedy if a show underperforms.
Alan Frank, president of Post-Newsweek Stations, supports the TVB effort to get stations into the upfront market, which is conducted in June for ads that will be placed in the next TV season. "Spot TV shouldn't be last" on the buyers' shopping list, he says.
In fact, many stations already sell full calendar-year deals with major automakers like GM and Ford and big retail chains like Sears.
Steve Grubbs, CEO of PHD, an ad agency in New York, says he already buys spot TV this way. "I'd like to see the network upfront market run on a calendar basis as well."
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