Advertising and Marketing

Buyers Turn to Data Firm for Better View of Market

SMI to provide stats on cable, other media 7/18/2011 12:01:00 AM Eastern

After an upfront in which cable networks were able to grab
big increases in both price and volume-an unusual combination-media buyers figure
having more information about the market could help level the playing field in
future negotiations.

To put that market intelligence together, most of the major
media buying agencies are working with an Australian data company called SMI
(Standard Media Index), which plans to set up shop in the U.S. later this year.

Sue Fennessy, SMI's
Global CEO, has established an office in New York, but said she wasn't ready
yet to share details of how her U.S. operation will work.

On its Website, SMI
calls itself an independent source of advertising expenditure data. It says
subscribers receive SMI's
monthly data and reports only days after the month's end, creating a new level
of confidence for advertisers.

In Australia, SMI
collects data across all media from all media buyers. "Australia's major media
agencies have embraced SMI
as it is the first trading metric able to be utilized across all media," the
site says.

Fennessy says SMI
aims to be a global business dealing with global data. "If you look at any of the
big media companies, whether it be CBS, Viacom, Google, I think everyone's
interested not just in the U.S., but in how developing markets are tracking:
India, China, Brazil, Russia," she says. "Agencies have global clients, so from
our perspective, we're very much a global data business. It's all about
intelligent application of data globally."

Nevertheless, SMI
recognizes that the U.S. is a huge market, and not just because of its size. "I
still truly believe it is the center of the universe. So many global clients
are driven out of there. It gets interesting because we're about capturing
global trends," Fennessy says.

There are other outfits in the U.S. offering different sets
of media data. SQAD gathers data from clients to generate its NetCosts product,
which tells subscribers how much marketers are paying for commercials. Nielsen
and Kantar Media generate spending figures based on estimated prices for
commercials.

"I generally think we need better data in our sector,"
Fennessy says. "There's some great data sets out there. We're only a piece of
the puzzle. I absolutely understand that. But our vision is about creating
standardized coding. It's about getting real clarity and timeliness on the
shifts that are happening in the marketplace and making that more meaningful
for the media owners as much as the media agencies."

Fennessy says that with the media environment becoming more
fragmented and chaotic, the need for consistent data is increasingly
imperative. In Australia, she says there were 6,100 media vendors in 2007.
Today there are 11,800.

"We're looking at similar growth rates in the U.S.," she
says. "And what is really fascinating is we're used to just analyzing our
silos, so broadcast or cable television, local spot. But actually, cable networks
are now competing against digital networks. So, the competitive landscape has
shifted and what SMI
is allowing people to do is see the real competitive landscape and what that
looks like and how that's shifting, the rate of those shifts and then having that
data to make better business decisions and respond and react and plan around
that."

Fennessy insists having a clearer picture of the industry
will help all of its constituents. "At the moment, globally and even at a local
market level, we're operating to a certain degree with the lights off," she
says. "Bloomberg was built on the foundation that transparency, or a level of
transparency, fuels investment and fuels innovation. And we are based on a
similar foundation."

The prospect of buyers merging their market data doesn't
seem too frightening to at least one cable network sales executive. While
having a more accurate grasp of total demand in the market might help buyers,
other variables remain under the control of the sellers, including how much inventory
they intend to put into the market and the changes in the commercial load
within individual programs.

And not everyone thinks a level playing field is a great
idea.

"I don't see any benefit of it," says Rino Scanzoni, chief
negotiating officer for GroupM, which he estimates has more than 30% of the
cable TV Market in the U.S. Scanzoni says GroupM is able on its own to estimate
total demand.

"For me to provide my data so that five other agencies get
data that they don't take the time to generate on their own, why would I want
to do that? I'm only giving a competitive advantage to somebody that clearly
doesn't have it now."

The figures will also be based on what happened in the past,
and Scanzoni says he's interested in what's ahead. "Dwelling on the past is not
the way to drive incremental value," he says.

Fennessy says GroupM is already a partner in other markets.
And even without its data, SMI
will be able to put together pretty good data on the U.S. Market.

"If you have 40% or 50% market visibility, you have a really
good trend line upon which to make decisions. And that trend line doesn't seem
to change whether it's 45-50% of market or if its 90-95% of market data; the
trend line is the same as long as the source of data is variable-it's not all
coming from one source."

Fennessy adds that in the current landscape, cable competes
not just with broadcast but with digital networks. "What SMI
is allowing people to do is see the real competitive landscape and how that's
shifting and the rate of those shifts, and then having that data to make better
business decisions and respond and react and plan around that."

Fennessy insists having a clearer picture of the industry
will help all of its constituents. "At the moment, globally and even at a local
market level, we're operating to a certain degree with the lights off," she
says. "Transparency, or a level of transparency, fuels investment and fuels
innovation."

The prospect of buyers merging their market data doesn't
seem too frightening to at least one cable network sales executive. While
having a more accurate grasp of total demand in the market might help buyers,
other variables remain under the control of the sellers, including how much
inventory they intend to put into the market and the changes in the commercial
load within individual programs.

And not everyone thinks a level playing field is a great
idea.

"I don't see any benefit of it," says Rino Scanzoni, chief
negotiating officer for GroupM, which he estimates has more than 30% of the cable
TV Market in the U.S. Scanzoni says GroupM is able on its own to estimate total
demand.

"For me to provide my data so that five other agencies get
data that they don't take the time to generate on their own, why would I want
to do that? I'm only giving a competitive advantage to somebody that clearly
doesn't have it now."

The figures will also be based on what happened in the past,
and Scanzoni says he's interested in what's ahead. "Dwelling on the past is not
the way to drive incremental value," he says.

Fennessy says GroupM is already a partner in other markets.
And even without its data, SMI
will be able to put together pretty good data on the U.S. Market.

"If you have 40% or 50% market visibility, you have a really
good trend line upon which to make decisions. And that trend line doesn't seem
to change whether it's 45-50% of market or if its 90-95% of market data; the
trend line is the same as long as the source of data is variable-it's not all
coming from one source."

E-mail comments to
jlafayette@nbmedia.com and
follow him on Twitter: @jlafayette

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