NBC has taken numerous public relations body blows for its handling of the Jay Leno/Conan O’Brien prime-time/late-night fiasco. Luckily for Michael Pilot and the NBC ad sales team, it appears the network will avoid being sucker punched by the media agency and advertiser community, who have some $180 million invested between March and May in the now-cancelled The Jay Leno Show.
Still up in the air but being negotiated in the coming weeks is whether advertisers will stay with the replacement programming taking Leno’s prime-time place, or take that cash back and move it to other networks. Ironically, working in NBC’s favor is the continued tightness in first-quarter scatter inventory, which has kept prices high, and would make it costly for advertisers to find the same gross ratings points elsewhere.
At this point, media agencies seem likely to recommend that their clients keep their money in NBC. They point out it was not their complaints, but the complaints of NBC’s affiliates — who felt Leno was not a solid enough lead-in to the late local news telecasts — that led NBC to cancel the show.
Helping matters, buyers added, is that NBC did not oversell the 10 p.m. Leno show by promised inflated ratings; the show was delivering almost exactly the ratings NBC had guaranteed.
Agency execs also said they approve of the new 10 p.m. NBC lineup that begins in early March of Law & Order on Mondays, the new Ron Howard/Brian Glazer comedy Parenthood on Tuesdays, Law & Order SVU on Wednesdays, Jerry Seinfeld’s reality show The Marriage Ref on Thursdays and an edition of news magazine Dateline on Fridays.
Expectations are that ratings will be considerably higher than Leno. Brian Hughes, vp and director of audience analysis for media buying unit Magna, is forecasting that Law & Order will generate a 30-40 percent improvement in delivery of adults 18-49 demo on Mondays; SVU’s bump will be 60-70 percent higher on Wednesday; and The Marriage Ref will deliver a 30-40 percent premium on Thursdays. Ratings gains for Parenthood are expected to be a less significant 5 percent, Hughes said, because Tuesday was Leno’s highest rated night, and because the competition on CBS and ABC is stronger. Also, Dateline’s ratings on Friday could be flat compared to Leno.
More than anything, though, buyers are sticking with NBC for now because of the high-priced scatter ad marketplace is still commanding prices higher over the upfront. “With the scatter market as strong as it’s been, I would think advertisers would want to keep their money where it is, and not take cash back,” said Andy Donchin, evp and chief investment officer at Carat.
“Unless a client has a real pressing need for money back, I think they will stick with NBC,“ added Jackie Kulesza, vp and broadcast activation director at Starcom.
“With the current state of the marketplace, it will be expensive to move [money committed to NBC] to other networks at 10 o’clock,” said Harry Keeshan, evp, national broadcast at PHD. “NBC will work hard to make sure our clients switch their money into shows with audiences they need to reach.”
“Each client situation will be different; some will take credits, and some will want the potential for higher ratings in the replacement shows,” explained Larry Novenstern, evp, director of electronic media at Optimedia. Novenstern said he foresees advertisers keeping their money placed in the Tonight Show where it is when Leno returns in March. “The audience won’t change that much and in this marketplace, you don’t want to take money off the table,” he said.
Pilot, president of sales and marketing for NBC Universal, said he’s happy that buyers and clients have reacted far less negatively than the public backlash. “From the advertising/commercial side, this has not been a major issue and will not be an issue,” Pilot said. “There is a quiet confidence between the media agencies and NBC that we will work this out and will be able to re-express inventory in the new shows and the prime-time daypart that maintains the value each advertiser bought in the upfront.”
Pilot sounds relieved to be returning to a more traditional 10 p.m. schedule. “The tricky part was getting the advertisers to go with a Jay talk show every night at 10,” he noted. “Now we’re going back to familiar territory.”
Beyond re-expressing traditional commercials, NBC also has to work out agreements with advertisers who purchased product placements in Leno. Pilot said some of those product placements were done to work specifically with Leno the personality; he is working to shift those placements into the Tonight show when Leno takes over on March 1.
Clearly, with about $3 million to re-express each night, according to media agency sources, and with dozens of advertisers to deal with, it’s going to be a busy February for the NBC sales staff. But as talks begin with the agencies, Pilot said, “there hasn’t been a rush to the door. It’s been patient and calm discussions. It’s a manageable task, but it has to be done client by client to make sure everyone gets the value they contracted for in the upfront.”
Media agency execs are hoping NBC is successful in the long run whatever programming moves the network makes both for the rest of this season and into next season. They need the competition to prevent ad pricing from rising even higher. “We continue to support more competition among the broadcast networks and need for NBC to be a strong, viable network,” Starcom’s Kulesza said. “NBC can fix their problems. They need to be a player.”