Having Fun and Success With NumbersGroupM's Rino Scanzoni is changing television with his insistence on better analytics 12/12/2008 07:00:00 PM Eastern
Two years ago, Rino Scanzoni, chief investment officer of media holding company GroupM, became—somewhat reluctantly—the public face of advertisers' and media agencies' efforts to push for revised Nielsen ratings for TV commercials.
While a change in TV marketers' currency would have been big news that year, Scanzoni's shift to focusing on the performance of TV commercials wasn't a spur-of-the-moment thing. It had started more than 20 years before, when buying TV commercials for advertisers was thought to be akin to race-track handicapping.
Back in the late 1960s and early '70s, TV buying was about picking new shows—hopefully at small, under-the-radar prices—and then watching the ratings race ahead. “Back then, you could make huge swings by picking the right shows,” Scanzoni says. 'You could over-deliver [by a lot]. It was much more about arbitrage: 'Do I buy now—or later?'”
Nixing an initial flight of fancy to become a TV director, Scanzoni moved into media buying. After two introductory media agency jobs, he landed in 1978 at Benton & Bowles, which became DMB&B. There he learned a new way of thinking from his boss, media guru Irwin Gotlieb, now chairman of GroupM, the holding group for four media agencies.
“Irwin would never allow someone to be called a 'buyer' as a description of their job,” Scanzoni says. “We were really investment seekers; we were looking to find long-term opportunities.”
Gotlieb, who formed and ran TeleVest (the television buying and planning arm of DMB&B) and then MediaVest, has always been fixated on market analytics, research and computerization. All of that perfectly suited Scanzoni and his economic analysis background.
“The best way to put it is: If I were a client and there was money that needed mining, there is only one person who really could do that task,” Gotlieb says of Scanzoni. “He is very focused on the big picture and the micro-picture.”
DMB&B, TeleVest and MediaVest had powerful TV clients, including Procter & Gamble and Kraft Foods, pushing the agency to be more creative.
Scanzoni's initial successes, in the early '80s, were in striking long-term, low-priced deals with new broadcast competitors. His first triumphs came in buying time in what would be two of syndication's biggest hits—Wheel of Fortune and The Oprah Winfrey Show—buying for big daytime advertisers like P&G and Kraft. “We looked at Wheel of Fortune when it wasn't even a national show,” he says. “We looked at its substantial improvement in the time period and its lead-in. We wound up investing in a big way for many years.”
Next was the new Fox network. “We felt very strongly there was room for another network, especially one, at the time, that was targeting young males,” Scanzoni says. “We structured huge long-term deals for Kraft and P&G before the first show was on the air.”
There was activity in cable as well. “We even did 10-year deals for clients at MTV,” he says. Similar multiyear deals were made at USA Network and TBS.
“The old model was in picking individual TV shows,” says Mel Berning, executive VP of advertising sales and marketing for A&E Television Networks. “What Rino and TeleVest did was pick successful media companies.”
Scanzoni's current title, chief investment officer of GroupM, reflects what he and mentor Gotlieb have always believed—big TV advertisers should be in it for the long term.
Size doesn't hurt in getting people to listen. GroupM's clients account for roughly 30% of all TV advertising business. But Gotlieb says the groundwork was primary: “The analytics were built first, housekeeping tools were built second, and then business took off.”
This worked for Scanzoni. “One of the Rino's greatest strengths is that he could take two minutes to size up the market, do the mental math, put his numbers down and do the deal,” says Berning, who worked for Scanzoni at TeleVest.
Two years ago, this long-term strategy escalated for Scanzoni, when he and Lyle Schwartz, managing partner, director of broadcast research and marketplace analysis for GroupM, sensed that clients needed a new currency for their investment strategy. Weary from commercial zapping by consumers, as well as fast-forwarding of commercials by DVR users, GroupM pushed for the so-called “C3 ratings”—commercial ratings plus three days of DVR playback data.
But this wasn't going to happen with long-winded industry panels, Scanzoni believed. It would come because of GroupM's influence. “We were in the position to drive this,” he says. “Significant change never comes about by huddling and trying to get everyone to agree.”
On the eve of the upfront advertising marketing in 2007, GroupM announced, with NBC Universal, an $800 million upfront deal that spanned not only NBC Television Network but its cable channels as well, using the new method.
Up to that time, Scanzoni had never disclosed a hint of any TV deal. But another agenda was needed here for other media agencies to get on board with C3. He turned opportunity into reality.
Almost eight years ago, Scanzoni had a different kind of opportunity—not for his clients, but for himself. He stopped working for one year. “I left MediaVest on Dec. 31, 2000, and started with Mediaedge on Jan. 2, 2002,” he says.
This was mainly due to a non-compete clause in his MediaVest contract. “It allowed me to travel without any guilt,” he says. “Not many people [can] take a year off when they are in their late 40s.” Scanzoni skied 70 days that year.
This involuntary sabbatical fits his profile. Three words describe Scanzoni: “science,” “fortitude” and “contrary.”
“This is clearly a business that is art and science,” he says. “You have to take the emotion and hearsay out of it—actually do your homework—and then have the intestinal fortitude to follow your heart. Generally opportunities exist when people are doing the opposite.”