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MarketMakers

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Everyone, it seems, has a fish story. It so happens, though, that Dick Hobbs has one that's true, and he's got the fish hanging on his wall at Leo Burnett to prove it.
This particular fish is a 48-inch muskie he caught in a remote lake in northern Ontario not too many summers ago.
With very little prodding, Hobbs will tell you he caught this 33-pounder with a 6-pound test line, which is a little like bagging an elk with a butterfly net. And he will tell you that patience - above all else - helped him to surmount this obvious shortcoming.
Patience is a big virtue to Hobbs, senior vp/media services at Burnett and a fixture in its media department for 30 years. But while he may see patience every time he looks in the mirror, others see determination and resolve and a diligent, unremitting style in pursuit of the best deal. One might imagine that because Hobbs and his staff spend about $200 million a year on syndication, the deals come pretty easily. But one should know that it's just as easy - in some ways easier - to spend $200 million poorly in the market than it is to spend it wisely. By all accounts, Hobbs spends it quite wisely.
It is no surprise that the buttoned-down Hobbs, after three decades at Leo Burnett, has come to embody the essence of the agency. (How could it be otherwise with conservative clients like P&G and McDonald's?) But he also has his distinctly Hobbsian traits. He is straightforward, hard-working, plain-spoken and, of course, patient.
'I would like to think that my style, as well as the agency's, is to work with syndicators, to attempt to do a friendly business-like negotiation and do one that is reasonably satisfactory to both parties,' he says. 'I don't think we ought to be characterized as rock-bottom-take-it-or-leave-it kind of people. An adversarial position or conflict is not in the interests of either of us.'
Hobbs usually answers his own phone, which contributes to his self-professed image of accessibility. 'Among his strengths is that he will always tell you what he is thinking and why,' says a veteran syndicator. 'He won't give you the silent treatment like you sometimes get from others.'
Not that Hobbs and his staff are pushovers. They use their clout effectively, typically by going into the market and spending in one lump sum. Hundreds of millions of dollars can be released within days, sometimes hours. The effect on the market is daunting because prices fluctuate wildly on the basis of how much, and where, Burnett spends.
For syndicators left out of a big Burnett buy, the consequences are chilling. Without a piece of a Burnett buy, a syndicator might find the pricing on his own property sagging precariously. Without a financial vote of confidence from Burnett, a syndicator knows he's got big problems.
Hobbs, of course, is well aware of this power. Consequently, he avoids trashing syndicators, or even genres, at least publicly. Oh, he will say some things are not quite right. For instance, he says this of one disturbing trend: 'Over the last six months the daytime talk shows have become more controversial than they were historically, but because of the recent influx of one-hour action adventure shows, maybe there isn't going to be a substantial increase for available time for that genre.'
Hobbs also disdains any notion that he or his staff pick shows based on gut instinct. Rather, he says, 'You've got to ask yourself a lot of questions (about a show). Is this a new idea or an old one? And if it's new, does it seem to have some appeal? More importantly, for our advertisers' point of view, what is the content like? Is this the kind of place we'd want to run our commercials?' Sounds like an eminently reasonable - and patient - approach.
Alison Danzberger, Foote, Cone & Belding.
Some negotiators like to think of themselves as conciliators: A deal isn't a deal unless everyone is happy.
Some like to think of themselves as human pile-drivers: A deal isn't a deal until they're happy. You might say Alison Danzberger of Foote, Cone & Belding is such a dealmaker. After all, that's the way she sees herself.
Nice? Pleasant? Conciliatory? 'I'm really not when it comes to syndication,' she says matter-of-factly. 'I don't want to be friends with everybody because I have a job to do. And we're pretty outspoken about the issues.'
And how. Danzberger, senior vp/director of national broadcast for FCB, says the 'issues' of syndication - clutter, pod protection, 'spins' and program quality - are troubling to many buyers.
'You can think of an awful lot of reasons not to buy syndication,' she says. 'But as an agency, we have supported it long before I got here, and we've continued to do that. It's a frightening thought when you think that at one point, $6 billion was being thrown back into the network marketplace.' Barter syndication, she says, 'is a balance.'
The 'balance' at FCB comes to around $100 million in barter expenditures for advertisers like Colgate-Palmolive, Campbell's, Mattel, RJR Nabisco, Dial, Frito-Lay and Clorox (FCB has the syndication AOR assignment for each.) As such, the agency, along with Danzberger and her staff, is a heavy hitter in barter. 'We try to increase our leverage as much as we can,' says Danzberger. 'We believe in shutting out (a syndicator) if they are not cooperative.'
Danzberger honed her take-no-prisoners style on the network level, spending four years in network sales at ABC before joining FCB in March 1989. Before that she did stints in media departments at Young & Rubicam, Ogilvy & Mather, Ketchum, and Benton & Bowles (where she began her career).
While her self-described negotiating style is 'tough,' her approach to buying a program is, for all intents and purposes, common-sense. 'All of the people in this department watch a lot of television; they're encouraged to,' she says. 'Aside from doing that and from studying the numbers . . . we constantly remind ourselves that we are not mainstream USA. Just because we personally like a show doesn't mean that it's going to work. So we're constantly assessing the mood of the country when we assess whether a show is worth spending money on. Even if it is a 'low' genre, that doesn't mean that it can't be successful.'
Nevertheless, Danzberger doesn't necessarily like what she sees on the eve of NATPE.
'The big thing we're looking for in syndication are programs that reach some of the more difficult demos, like men and teens. (But) I think we're certainly seeing the pressures on suppliers to produce programming at a lower cost. So we are not, for example, all that enamored of the number of soft talk shows that are coming out.'
Bob Silberberg, Backer Spielvogel Bates.
It's been said that to be a truly well-rounded TV negotiator, you must have worked the other side of the street - TV sales. After all, how can you know all the tricks of the trade unless you've used them yourself a few times?
Bob Silberberg, it is fair to say, knows all the tricks. For years, he was a top sales executive at ABC and, briefly, at CBS.
But Backer Spielvogel Bates' executive vp/national broadcast also has a qualification unlike any other top TV negotiator: He was once part-owner of a syndication firm.
Silberberg, you might say, has worked three sides of the street. He knows barter syndication and syndicators cold. He also knows the games they play and the problems they face. It is this knowledge, he says, which informs his negotiating style.
'I honestly believe a deal is good only if both sides think it's a good deal,' Silberberg says. 'You can be hard-driving but you have to let them walk off with their sidearms and horses. It's a long-haul business.'
But this even-handed style is balanced with a sense that the syndication business has problems - problems which, he says bluntly, can hurt the advertiser. 'Not everyone in syndication exudes the same level of honesty that they do in network (sales).'
Silberberg and his national broadcast staff, headed by senior vp Susan Rowe, spend just under $100 million in syndication for clients like Miller, Wendy's, Hyundai and Carter Wallace, which makes BSB one of the largest buyers of barter in the country.
Size, of course, has its advantages - like clout - but there are problems, too. 'When you force deals, or negotiate too hard and make it (impossible) for someone to make a profit . . . you get people trying to force things,' he says. 'It's like putting a size 12 foot into a size 10 shoe. Because barter is only supported by advertising dollars, some syndicators do strange things, like spin (spots, the practice of running commercials outside a purchased show). A lot of these things don't get thoroughly investigated, and they slide by.'
Silberberg joined BSB in 1991, after three years at CBS as vice president in charge of news, daytime and children's sales. Most of his sales career, however, was spent at ABC, where he started as an assistant sales manager in daytime in 1966. When he left the company 20 years later, he was a senior vice president and general sales manager in charge of all primetime programming.
He left the network to become part-owner of Syndicast, which was best known for D.C. Follies, a weekly half-hour satire about politics. But the firm's ad revenue dipped just as the entire network TV economy soured, and the company was sold (and later folded).
Silberberg says the experience left him with a belief that other small-to-midsize syndicators are facing a crisis over the next few years. Barter shows, he says, 'just by their very nature don't get treated the same way as (cash shows) by stations. Stations don't lock in time periods, except for certain syndicators, so that when you go to buy these things they're all over the place and require a lot more scrutiny.
'What's happening now is that the big guys (like Paramount and Warner) get bigger and the small guys have to become more niche driven,' he says. 'But when these syndicators become more niche driven it means they've got to lessen their reliance on barter because advertisers are not really looking for a 2 rating. With the shoestring stuff, you can have the greatest idea in the world, but without the backing, you're not going to make it.'
So what's going to make it? Silberberg is not sanguine about the prospects for most shows on the market: 'Maybe I'm getting jaded, but it's not very exciting anymore. The biggest leap forward was in the direction of some of these hour shows (like Deep Space Nine). But I look at this other stuff, and it just doesn't excite me that much.'
Rino Scanzoni, DMB&B.
Some people in the business describe DMB&B's negotiating team in less than complimentary terms. The members of the squad, they say, are like bats. They only seem to come out at night.
For critical upfront negotiating sessions, DMB&B's team might show up at a network's headquarters at 10 p.m., ready to do business. Some believe the peculiar nocturnal habits arose because the agency's staffers prepared for negotiations so exhaustively during the daylight hours. But others suspect DMB&B uses the tactic because late night is a good time to wear down an already weary sales staff.
Whatever the truth, there is a mystique about DMB&B's negotiating style. In fact, that style is more prosaic than mysterious. It's both research-intensive and highly intelligent. It is also domineering. Very domineering. DMB&B, foremost, believes in controlling the marketplace; not the other way around.
One of the chief architects of the DMB&B style is Rino Scanzoni, senior vp/national broadcast for DMB&B USA. Queens born and bred, Scanzoni has been at the agency for 14 years. He has also worked at BBDO and Ted Bates, where he began his career in 1976.
Scanzoni is a big gun in the syndication business for the simple reason that his agency spends more than any other: about $200 million, 90% of which is agency-of-record assignments.
'Our responsibility,' he says, 'is not to go out and buy time for our clients. Our charter is to go out and manage these dollars. There is a significant investment and our job is to advise them where the opportunities are, what the trends are, and what the value of the programming is.'
'Portfolio' is a key word in Scanzoni's vocabulary. 'We are very analytical,' he says. 'We try to get a good feel of where the marketplace is going so that we can advise (clients) accordingly and tell them what kind of balance they should have in their portfolio.'
The DMB&B style, as personified by Scanzoni, endows great trust in research. A custom-tailored computer system, for example, allows negotiators a way to analyze various permutations of a TV buy, based on various hypothetical marketplace models, like ad revenue increases or declines.
It also stresses absolute control - a value no doubt shared in large measure by blue-chip clients like P&G and Kraft General Foods. At DMB&B, 'control' can mean, for example, getting in on the ground floor of a show that seems promising.
Sometimes the agency wins big - like the time it bought a multiyear position in Wheel of Fortune and Jeopardy before rates soared (indeed, DMB&B has been in on the ground floor of virtually every top 10 hit in syndication). Sometimes it comes up short - like buying a big chunk of time last year for You Bet Your Life.
The agency, however, never loses. Because of a complex negotiation that DMB&B designs for each of its syndication buys, the agency is 'made whole' if a show stumbles. As Scanzoni puts it, 'if certain programs fall short, whether in clearance or ratings, there are appropriate mechanisms to adjust (the value).
'There are going to be failures - no doubt about it,' he says. 'You can't bat 1.000. But if you're batting .850, then that's pretty good. If you can get adequate protection on the other 15%, then you're batting 1.000.'
DMB&B, of course, uses it clout to get these deals (what else is clout for?). But Scanzoni is sensitive to any suggestion that the agency uses its muscle to get what it wants. 'We don't impose one way of doing things,' he says. 'There's no doubt that we use our leverage. That's what we get paid for. But I hope we do it in a fashion, in terms of a partnership.'
And what about those future big hits Scanzoni hopes to secure in a 'partnership' at this year's NATPE? 'I think we're in an in-between year,' he says. 'A number of key players are sitting on the sidelines, waiting to see how (the first-run hours) do.'
Verne Gay writes about the television industry for Newsday.
Copyright Adweek L.P. (1993)