Down the Road
Initiative's Spengler on TV's ad future, product placement and lost opportunities
By Allison Romano -- Broadcasting & Cable, 9/26/2004 8:00:00 PM
Four months after a whopping $9 billion was committed to broadcast-network prime time advertising, Madison Avenue finds out if it's getting a bang for its billions. While media buyers and clients anxiously chart ratings, B&C's Allison Romano checked in with Initiative Media's top buyer, Executive Vice President and Director of National Broadcast Tim Spengler.
A few weeks into the fall season, what's hot and what's not?
Nothing is a terrible miss or a huge hit, but it's early. The WB has started out nicely. A huge promotional platform is no guarantee of success, à la last year's World Series on Fox or the Olympics on NBC. We need to wait a couple of weeks.
Does it help to stagger premieres? Some shows don't debut until early October or November.
The days of 11 channels are over. There are too many options for viewers. To get maximum sampling, there is no way to premiere them all in a week. [Staggering] is the best way to give shows a chance.
Some networks, like Fox, are rolling out programming year-round. Are viewers—and your clients—ready to buy a 52-week season?
We applaud looking at 52 weeks as one year. But based on what we saw this summer, original programming doesn't necessarily equal success. You still have to develop something worth watching. What's in vogue for summer might not play well in fall. Some things might have legs all year.
Won't year-round programming disrupt the upfront cycle?
I'd like to see upfront moved to a calendar-year basis. Our clients would have more budget information; the networks might know more about performance. Then they could sell with less change.
The Apprentice isn't as strong as in its first season, and The Benefactor and Next Great Champ are struggling. Are viewers losing their reality appetite?
It's not a problem with reality. Copying a successful show does not work, regardless of genre. It could be a medical drama or an urban twentysomething cast show. One show may be successful. That doesn't mean the ones that follow will.
So the 30-second spot isn't dead?
You still want a full sight, sound and motion sell mixed with hyper-branding opportunities, like product placement. Those [The Apprentice, Survivor] are can't-miss, TV-proof brand opportunities. We call them TiVo-busting ideas.
Mark Burnett wants millions for product placement in his shows. How do you put a dollar value on these deals?
There is some science, but there has to be a gut feel. What will it do to move your brand? You can look at exposure and value of time within the show. We do track short-term sales after the show. You have to think through benefits before you say it is not worth X, compared to what I'd pay for a 30-second spot.
What are examples of well-done and effective product-placement deals?
At Initiative, two favorites were the AOL "Running Man" activation in high-profile entertainment and sports properties, like the World Series, and the "Coors Light Nightcap" on ESPN's SportsCenter last season. From other agencies, AT&T's "Phone a Friend" on Who Wants To Be a Millionaire and Coca-Cola's integration in American Idol.
Some analysts predict digital video recorders (DVRs) will surpass 15 million homes next year. As penetration grows, how are you redirecting your clients' media plans?
I don't think we'll rely as much on television in the future. There are other mediums, like Internet, outdoor, radio. Today, television is the most powerful medium, but five years from now, the media mix will be different.
Several advertisers, including Mitsubishi, say they're pulling money out of broadcast prime time. Is this a gathering storm or a negotiating ploy?
Some clients are serious. If they are successful with other advertising and there's no detriment to sales and brand perception, more will follow. But if they see a negative effect, they'll come back with their tail between their legs.
Does this represent a bigger problem with broadcast advertising?
The move away from six-network prime time is a reality for advertisers. It's based on a cost differential that's out of whack. We're not recommending that the majority of our clients move away from broadcast. But there is a price/value relationship. Each year you have to question it. This year, advertisers questioned it to the tune of about $600 million of lost opportunity to the Big Six.
Ad-supported cable sometimes out-delivers broadcast for audience share, but the CPM gap is widening. Can cable achieve parity with broadcast pricing?
Cable is out-delivering in aggregate, but it's comparing 60 networks vs. six networks. Go network by network to compare. Cable brings opportunities, but there are other issues. The broadcast networks have more first-run programming, less commercialization, and the commercial pods are significantly shorter. For the cable networks to expect equal [treatment], we'd like to see equal ad opportunity or value.
Will syndication siphon off more ad dollars?
Syndication is a little more challenging. It has fewer time periods available.
First-run hits like Dr. Phil and Ellen make a lot of money. So do popular off-nets like Friends , Everybody Loves Raymond, Jeopardy! and Wheel of Fortune. Both cable and syndication give themselves a better shot at success by taking risks with first-run programming, but not without possible revenue losses.
Is it true some broadcasters and cable channels are must-buys?
You can't walk away from some networks. Certain male brands have to be on ESPN, but the degree could be examined. For certain teen brands, they have to be on MTV. Certain endemic brands have to be on an HGTV or a TLC.
What do clients want?
They look for break-through, standout ideas that deliver ROI [return on investment]. And they want it for less.
That's hard when the networks want to hike rates every year.
We have to be smarter about planning, find a willing partner and what marriage brings the best results. Then we have to be smart in negotiations. I only ask that advertisers reward agencies that do that, not just say, "That's what I pay you for."
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