Buyers Turn to Data Firm for Better View of Market

SMI to provide stats on cable, other media

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."

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