Focus on the 4 big themes - Jason Nebenzahl - MD - PHD
Date: 03/12/2012 | Comments
Focus on the four big themes....
As we are still in the midst of trading/negotiating for the year ahead, I often reflect that conversations focus on too many of the wrong things. As a reminder, roughly speaking, the television spot trading market is down about 6-7% from 2011 to 2012 and about 33% from 2008 to 2012. In this context, as an industry, we need to continually behave more progressively.
What we should be focusing on is the four key themes that come up more than any other in our business at this time. Call these ‘buzz’ words, a natural evolution for the media industry, it does not matter how they are labelled; while we all do them differently, those of us doing well are using all of them to varying degrees in how we approach our businesses and how we help our clients succeed. They are:
Since this is a TV forum, I shall focus on TV; what I talk about below is not a problem monopolised by TV, but TV can still be a good bellwether for our industry and so will get my focus.
Marketplace dynamics have forced an evolution in Irish TV over the last few years. We can all agree that it is important that good quality Irish content continues to be produced and so in an environment where investment money is limited, stations have needed to be more inventive. Advertising funded programming and integrated sponsorships that reach far beyond stings have become a necessary source of revenue and have served to strengthen the relationships between clients, agencies and media owners.
Over the past few months, all of the major broadcasters have announced their trading policies for 2013. One of my own frustrations is that while the bulk of the money derived by TV stations is through ‘spot’ advertising, the teams involved in negotiating this space have frequently not approached 2013 based on ‘Accountability’, ‘Creativity’ or ‘Integration’. There is a slight disconnect between day-to-day trading conversations and the progressive behaviour that is key to the future of Television in Ireland.
This is not to say that there are not some really progressive conversations around certain clients/brands (we have done cost-per-acquisition deals, shared risk deals and some really strong integrated campaigns, as have others in the market), but where the bulk of the money is still spent, spot advertising, these elements have not widely featured.
Scour what the finest media minds in Ireland have written or spoken about over the past year and I challenge you to find speeches where one of these key principles was not highlighted as being at the heart of the very future of our business. Yet, when it came to TV trading for 2013; the conversations were initially about one thing; price.
Roughly speaking, inflation for TV is being sought in the region of 3-10% with obvious negotiation to take place based on share (like a rose, by any other name it still smells the same), volume, quality etc. This is against a backdrop of market decline. Those close to our industry know that this inflation is because of significant audience decline on a number of key Irish stations, especially since the digital switchover. This audience decline, taking supply out of the marketplace, naturally leads to inflation.
Yet this level of inflation, however necessary and sensible based on a CPT trading model, runs contradictory to the rest of the media marketplace. Such an environment should present a prime opportunity to change the trading conversation and better promote television. Unfortunately, for the most part, with notable exceptions on key clients, this progressive commercial approach does not exist when those leading TV trading for the major broadcasters are primarily focused on airtime management.
Instead of bringing in ‘Accountability’, ‘Creativity’ and ‘Integration’ into the immediate conversation; they are left to feature later; treated as extra or enhanced elements and not core to each specific trading deal. Our clients know the market is down and we tell them that media owners want it to go up. We tell them that advertising is a necessary investment for their business, but we do not build this accountability into most of our negotiations. We emphasize the importance of creativity to create distinction and yet we do not allow for this during most negotiations. We talk about the absolute necessity of integration in all communication and yet in our TV negotiations, we primarily focus on TV spot price. 2011 CPT, 2012 CPT, 2013 CPT. The computer says that this is the CPT so this must be the CPT.
And yet, media owners also talk the same progressive language as media agencies. Dual screen viewing, multi-media meshing, content is king and engaging audio/visual communication as the heart of any strong marketing campaign have been the focus of all presentations over the past few years. Dynamism is at the heart of the conversation whenever you talk to the major broadcasters.
However, there continues to be this amazing disconnect between spoken behaviour and spent behaviour. The vast majority of money goes towards traditional ‘spot’ advertising and yet the very approach by TV stations to isolate this from the dynamism of the communication conversation means that TV spot advertising is becoming increasingly commoditised.
In the economic cycle, a widely available commoditised product tends to decrease in value. This decreases price as people are not willing to pay more for a commoditised item. The way that TV is monitored, assessed and especially audited has exacerbated this commoditisation. And yet TV stations are looking to increase the cost of the part of their business that is becoming commoditised and do not regularly enough bring in the dynamic elements to offset this, during this, the most important time in the TV trading year.
But all is not lost. We now work more closely in ‘partnership’ with media owners which means that we no longer shout down the phone to get what we want, we talk like adults and occasionally friends. Video is becoming more and more ubiquitous and while there will always be a market for user generated content, exceptional video content can and should be led by traditional broadcasters. While video content distribution will rapidly evolve beyond the traditional TV set, broadcasters should have significant reasons to be optimistic due to the proliferation of video.
In addition, Ireland continues to have outstanding potential as a media marketplace. We have global leaders headquartered here, a sophisticated, media literate population and even with a stagnated economy we serve as a good commerce barometer for brands; making Ireland an ideal environment to test marketing strategy.
There is so much potential to engage with TV stations through our big four themes; ‘Accountability’, ‘Creativity’, ‘Integration’ and ‘Partnership’ it is such a pity that too often; we get bogged down on the commodity of trading when progressive behaviour can be more consistently at the heart of yearly conversations. Once again, it is a bit too late as March is already approved, but maybe next year we can do things a little bit differently.
Jason Nebenzahl Managing Director - PHD
Jason is a cum laude graduate of Colgate University and has an MBA with honours from The Michael Smurfit School of Business at University College Dublin. Jason’s media career in Ireland began with Initiative Media in 1999 before leaving in 2005 to help launch OMD into the Irish marketplace. In 2008 Omnicom decided to launch PHD in Ireland and Jason was appointed to lead this agency as Managing Director. In his time at Initiative Media, OMD and PHD, Jason has been hands on at leading a range of prominent, challenging and diverse pieces of business such as Unilever, Fáilte Ireland, Kraft/Cadbury, The Irish Times, Power of One (Ireland’s energy efficiency campaign) and countless others.