Turner Wants to Change Its Relationship With Advertisers

Focus shifting from CPMs to greater return on investment

Why This Matters

WHY THIS MATTERS
As tech cuts traditional viewing and creates new marketing options, media firms are seeking new ways to generate ad revenue.

The television advertising business is changing, and at last week’s Consumer Electronics Show in Las Vegas, where the future is often on display, Turner Broadcasting talked about the new relationship it is planning to have with marketers and agencies.

At a time when traditional ratings are mostly falling, selling a dwindling number of impressions hardly seems like a tenet of a growth industry. Digital advertising, despite issues of viewability, robot audiences and questionable content including fake news, has nonetheless been growing fast, surpassing TV, according to many estimates.

But there have been a number of recent studies showing that TV has a unique ability to reach massive numbers of consumers and that improving forms of measurement show that commercials remain effective at selling stuff. That effectiveness is being bolstered as media companies embrace data in order to create branded content and better target messages.

Turner, like others in the TV business, has already started to move away from selling their ad inventory based on broad demographics that define viewers simply by age and sex and shifting to consumption behavior. But now they think it might be time to shift from selling eyeballs to getting paid based on marketing results.

Ignition Keys

At CES, Turner unveiled Turner Ignite Sports, a companion to Turner Ignite, a unit that creates data and content solutions for ad clients. Ignite was unveiled last year in Vegas.

Turner Ignite Sports is designed to form longterm marketing partnerships with clients and provide access to events, intellectual property and talent, production capabilities and distribution.

Will Funk, executive VP of sales and property sponsorships for Turner Sports, will be in charge of Ignite Sports.

“We saw the need based on a kind of meandering path to get to where you want to be as a sports marketer,” said Funk. Marketers who want to be involved with a sports property need to hire a traditional ad agency, a media agency, a talent agency to engage players and personalities, and a production company, he said. On top of that, you need to work with a property rights holder, such as a league, and a finally a publisher, to push out the content and messaging.

“We felt there was a better way to do that, an easier way for clients to accomplish all of that with one-stop shopping,” Funk said. “And we can provide all of those services and save them money on fees that they’re paying multiple agencies right now across the board and deliver an integrated solution direct between our internal resources, an agency and the client.”

Turner has the rights to many attractive sports properties, including the NBA, March Madness and Major League Baseball, plus its own intellectual property such as Bleacher Report. Distribution would not be limited to Turner channels and web properties.

An example of the kind of thing Turner Ignite Sports will be able to put together is the March Madness Music Festival. During last year’s NCAA men’s basketball tournament, AT&T, Coca-Cola and Capital One each owned one day of the outdoor concert series. It reached nearly 180 million fans across TV, digital and in-person over the course of the tournament. The 2017 edition of the March Madness Music Festival will originate in downtown Phoenix March 31-April 2.

All of that is very different from selling spots.

“What we’re saying to them is: ‘Listen, this is starting to get traction,’” said Dan Riess, executive VP of content partnerships and cohead of Turner Ignite. “We have to talk about a different kind of relationship between us and our partners, which goes from transactional media company with some added solutions to really looking at us as an always-on strategic partner that has an ongoing daily relationship with these folks, and that’s a big change.”

The traction comes from having results to point to from hundreds of TV targeting projects, 300 branded content jobs and nearly a hundred social distribution deals. “We have replaced over 140 traditional ad pods on our traditional TV networks with branded content exclusive pods. And we’ve done that across every single network,” Riess said.

“It doesn’t mean we’ll be moving away from the upfront. It means the upfront is one point in time in what I would call an always-on, ongoing relationship,” Riess added.

This Year’s Model

“I think we have an aspiration to deliver and be paid on results. I think that ultimately is what a marketer cares about,” said Michael Strober, executive VP of client strategy & ad innovation and cohead of Turner Ignite. “They’re more focused on the ROI than they are on impressions. We have historically been operating under a CMP model that has to evolve. We’re not there. We’re building a path to do that.”

Turner’s not alone trying to focus on results. “We now have the analytical tools and database resources to provide advertisers with measures of the actual sales results generated by their messages,” CBS research guru David Poltrack said at an investors conference in December. “I have been, and continue to be, a passionate advocate of the movement away from just ‘counting the house’ to this more holistic approach of the value of television advertising.”

Turner’s Strober acknowledges that the shift is a change in philosophy as much as anything else. “We feel we have a lot of value in the services we’re providing as well as the franchises we can attach brands to,” he said. “But we feel very strongly they deliver tremendous value because they’re brands that people care about, franchises that fans are passionate about.”