Currency

GroupM Agrees to Use C7 In Upfront

Giant agency strikes measurement deal with Big Four networks 6/02/2014 01:53:00 PM Eastern

GroupM has agreed with the Big Four broadcast networks to do a major portion of its primetime entertainment ad buying for the 2014-15 television season using C7—live-plus-seven-day viewing—as the negotiating currency.

Network executives have been pushing for C7 because they want more delayed viewing counted when adding up the impressions advertisers get with their programming. Sources familiar with the situation say GroupM, which includes media agencies Mindshare, MediaCom, MEC and Maxus, has agreed with CBS, Fox, NBC and ABC to buy advertising for its clients in programming on those networks using seven-day viewership rather than the current three-day viewing. But pricing and volume is still to be negotiated.

While some random upfront deals were done between networks and assorted agencies in the last upfront using C7, this would be the first time that a sizable portion of upfront advertising is sold using seven-day viewing.

GroupM did not respond immediately for comment, but two weeks ago, chief investment officer Rino Scanzoni conceded in a Wall Street Journal interview that while media agencies have pushed back on the broadcast networks’ insistence of moving to a C7 metric, he does see the business moving to C7. He said it would be “a matter of working out the economics initially to make the transition one that’s acceptable to both sides.”

Apparently, that has been worked out between GroupM and the four broadcast networks. Spokespeople for NBC would not comment, while spokespeople for ABC did not immediately respond. Both CBS and Fox confirmed that the networks did agree to do C7 deals with a “major agency” but did not identify that it was GroupM. Fox also acknowledged doing a “limited number” of C7 deals during last year’s upfront.

With delayed TV viewing on the rise, the broadcast networks over the past few years have been pushing for a move to C7 from C3 so they could better monetize their viewership when selling advertising. The broadcast networks have argued that marketers are getting lots of free viewership in the fourth- through seventh-day window. Meanwhile, advertisers, particularly movie companies and retailers, have said because of their need for more immediacy in reaching viewers, viewership in days four through seven are less valuable.

In these latest deals between GroupM and the broadcast networks, sources familiar with the situation say the networks might have to offer some kind of discount pricing for marketers in categories where immediacy is more important. However, the bulk of the clients in categories where immediacy is of less importance would buy with an altered metric.

Said one person familiar with the situation, “You can’t use C3 cost-per-thousand pricing with C7 viewing data, so all that needs to be adjusted.”

However, sources said GroupM came to market with the adjusted C7 data, as have some other agencies including Carat. Sources said WPP agencies Starcom and MediaVest are still opposed to doing deals using a C7 metric and are looking to stick with C3 for their clients in the current upfront negotiations.

This move to C7 from C3 and the negotiations that have been taking place to switch the currency may be one of the reasons why no major upfront ad buying deals have been consummated at the broadcast networks yet. It has apparently taken time to negotiate this move from C3 to C7, and actual ad buying would most likely begin starting this week.

CBS Corp. president and CEO Les Moonves has been a major proponent of the move to C7 for several years. As far back as Nov. 2012, in an earnings call, Moonves said, “As we move forward, we will make it a priority to get paid for all the viewing that is going on across our shows, including DVR viewing beyond C3.”

A month later, he called C3 measurement a “stop gap” that would eventually yield to C7 and predicted by mid-2014 C7 would become a reality. He was right.

Moonves said during the most recent TV season that the network had two major advertisers, who he didn’t identify, that had done deals with the network using the C7 metric.

Fox, who has been negatively impacted by additional DVR viewing perhaps more than CBS, has also been aggressively pushing for a switch to C7.

In his talk to advertisers during Fox’s recent upfront presentation, the network’s ad sales president Toby Byrne said, “We need to have a meaningful discussion about C7.”

(Photo Credit: Left: Fox's The Last Man on Earth, Fox; Right: ABC's Selfie, Eric McCandless/ABC)

March