Special Report: Buy the Minute

NEW YORK In nothing else, this year’s upfront promises to proceed like an overheated Rube Goldberg device, with negotiations twisting through an increasingly elaborate snarl of various metrics and currencies, a circuitous progression diverted only by brief forays into the digital space.

At the end of the line, when all the clanking and clamor has died down, what will pop out of the machine won’t be markedly different than last year’s end product: Clients will buy 30-second spots to advertise their products, and the sun, having risen in the east, will shine down on the whole merry tableau.

But before we get to the happy ending––and if you’re on the selling side of the proposition, you should be quite pleased with how things shake out this year––there’s an awful lot of chaffering in store. Having wrapped up their ceremonial presentations to media buyers, the cable networks are now waiting for the broadcast nets to put on their annual dog-and-pony shows, after which the table talk will begin—with each network hashing out deals as deliberately as possible, setting rates and applying currencies based upon the individual needs of their clients.

Any agitated talk about fighting the so-called commercial ratings momentum has died down as the realities of the marketplace have set in. This year, cable doesn’t find itself in so much a Helen Reddy-esque, “You And Me Against the World” scenario, with ad-sales execs taking a unified stand on the currency issue. Rather, it’s more a matter of every man for himself.

“It’s not a solidarity thing,” says Sean Cunningham, president of the Cabletelevision Advertising Bureau. “We all just have to be responsive to the marketplace, and the marketplace is a buyer/seller dialogue.”

At the center of that dialogue is that Nielsen Media Research minute-by-minute ratings data will play a supporting role in the cable upfront. “In talking to agencies and advertisers, we’ve found that some form of that minute-by-minute respondent- level data will be part of some of the negotiations in the upfront,” Cunningham says. “This will be a subject and an issue across a lot of individual negotiations.”

For the most part, the technical issues that plagued Nielsen’s initial trials of minute-by-minute measurement have been cleared up to the CAB’s satisfaction. That aside, there remain a number of questions about the data that won’t be addressable until Nielsen releases its new data streams on May 31.

“As we’re talking about unaudited data, there’s a second part of the equation: unproven processes,” Cunningham continues. “We have to address the industry’s readiness to process that sudden inundation of data at the beginning, middle and end parts of a television buy … There are a lot of unanswered questions that need to be worked out.”

That uncertainty has compelled many ad-sales execs to express a certain wary reluctance about charging into the upfront laden down by a mantle of unfamiliar, untested data. Ultimately, media buyers are pushing for minute-by-minute ratings because their clients are demanding more insight into how their spots are being viewed.

To that end, Mel Berning, executive vp, national ad sales for A&E Television Networks, is working to provide more clarity to his client base by way of a new online tool he introduced last week during the A&E upfront presentation in New York. Berning’s Targeting Toolbox is a Web site that offers A&E’s sponsor partners research data from eight different sources, including IAG and Nielsen’s NPower, Mendelson and Equitrends.

In a sense, it’s a lot like one of those comprehensive printed planning guides updated for the digital age.

The Toolbox site is just one of the ways Berning is reaching out directly to his clients as they head into the relatively unchartered territory of minute-by-minute ratings buys.

A few days after the upfront, Berning said that, while he works with clients to suss out which metric suits their particular needs, certain issues keep rearing their heads.

“To this point, the accuracy of Nielsen Monitor-Plus hasn’t been great,” he says. “We still aren’t always able to detect the difference between when a national spot runs or a local spot runs or when content runs, and that’s presented us with problems.”

Cable also faces the challenge of assessing the value of the previous year’s CPMs after applying the new ratings currency. Ultimately, this year will be one of transition, Berning says.

“The way we work things out in this year’s upfront isn’t necessarily the place we’re going to wind up next year,” he says. “We have to carefully anticipate where it is we want to go next.”

One network that has already taken the ratings leap is The Weather Channel, which last year teamed up with Starcom to execute a handful of deals based on preliminary minute-by-minute data, going as far as to guarantee against its ratings numbers. While the net recently lost its ad-sales boss when Liz Janneman defected to Current TV, executive vp and general manager of TWC Media Solutions Paul Iaffaldano is expected to stay the course as Janneman’s interim replacement.

If it’s unlikely that a significant volume of cable deals will be executed on the basis of the new currency, some ad-sales executives are suggesting that the industry may earn itself a pass in 2007.

“I say cable buys itself a year, and gets to trade on live-only until we really have the data down pat,” predicts one sales chief who oversees a passel of networks. “This year, we’re likely to work in parallel to what broadcast does without intersecting them.”

For some ad-sales bosses, the ratings flap is more of a distraction than anything else, given their relative success in keeping viewers tuned in during commercial breaks.

“My responsibility is to make sure that an audience sees your advertisement and that our networks set up the viewer to be more receptive to the ad,” says Steve Gigliotti, executive vp, ad sales and emerging media, Scripps Networks.

The networks Gigliotti oversees, including Food Network and HGTV, regularly rank at the top of the list of cable channels when engagement is measured. And this past spring, Gigliotti’s team began pitching clients on another new metric: receptivity.

“A function of our engagement success is that our clients get a much bigger lift out of their commercials,” he says.

David Levy, president of Turner Entertainment ad sales and marketing and president of Turner Sports, says he’s had an ongoing conversation with clients to assess the value of the various data streams that will be in play after May 31.

“Once we get the data and we finally have the chance to feel it and live with it, we’ll have a better sense of how to use it,” Levy says. “We’ll go over all the different factors with our clients, but right now I can’t tell you how it will all shake out.”

Preliminary minute-by-minute data have scared up some particularly disquieting inconsistencies, according to Levy. There’s been some “wild differentiation between one week and the next, and we don’t know what to ascribe that to,” he explains. The key for this year’s selling period will be to assess and balance risks on both sides of the table, he adds.

As is glaringly obvious, most likely, the majority of clients are enthusiastic about the steps the networks are taking in anticipation of this year’s upfront.

“We’re encouraged by the dialogue on commercial ratings. But let’s advance it, let’s take a position and say, this is the way that it needs to be to be,” Roger Adams, senior vp, marketing for Home Depot, said during a recent industry confab.

“Let’s build this brand called the upfront and say this is why you need to spend more money here—there are things you can get in the upfront that you can’t get anywhere else,” Adams says.

As the CAB’s Cunningham sees it, the crux of the matter is that television continues to be the most powerful medium through which a marketer can reach an audience of potential consumers; as such, it is in the best interests of all three sides of the transaction triangle to work matters out.

“Our primary selling proposition is that TV is an enormous part of the media plans of the top 200 advertisers,” Cunningham explains.

“TV does an enormous amount of heavy lifting,” he adds. “It all comes down to the fact that we are all here to help advertisers sell more stuff.”