Special Report: Rino Scanzoni

Distinguishing between television marketplace hype and reality is a skill Rino Scanzoni has honed for nearly three decades. But over the past few years, making that distinction has become a more complex process for the man in charge of strategy for the three GroupM media agencies empowered with spending $12.5 billion on national television ads per year.

“When I was at Televest in the late 1990s, it was simply a media-buying agency, and most of the buying was done during the upfront,” recalls Scanzoni, this year’s Media All-Star Media Executive of the Year. “We had no research department. Basically, you just dusted off the previous year’s negotiating strategy and it continued to work year after year.

“Today,” he continues, “that won’t work. Today, media- buying agencies also do planning, and everyone has a research unit. You have to be prepared to go against the flow. You need to come up with a specific negotiating strategy each year that may be very different from the year before.”

Scanzoni’s no longer on the front line of negotiating for clients, in his much larger, more crucial role as chief investment officer of GroupM, which includes the buying shops MindShare, MediaCom and Mediaedge:cia, where he also serves as chairman.

In his role as chief investment officer, Scanzoni is responsible for creating an overall marketplace strategy to best benefit clients through upfront negotiations as well as deals throughout the year. “I no longer negotiate, but I provide the buyers at each of the agencies with marketplace intelligence and an overall strategy with parameters,” Scanzoni explains.

“I am the big-picture choreographer or the orchestra leader,” he goes on. “With my research team, I make projections and set expectations, and then the buyers can work their deals within those parameters.”

During last May’s upfront, it was Scanzoni’s strategy that moved the marketplace. The exec signed off on an $800 million mega deal with NBC Universal networks—a pact initially criticized by his competitors, but one Scanzoni believes best served GroupM clients.

The NBCU upfront deal was the first based on commercial ratings plus three-day DVR viewing (C3), cementing C3 as the new negotiating currency for just about all subsequent upfront broadcast and cable deals.

While the networks and agencies largely agreed that C3 would be the favored metric, it was Scanzoni who pulled the trigger first, thereby setting pricing guidelines for all future upfront deals.

At the time, some of Scanzoni’s competitors criticized the exec for overpaying on cost-per-thousand rates. But with the networks charging as much as 50 percent more for fourth-quarter scatter ads in prime time, it now looks as though his strategy—and his marketplace intelligence—was solid.

“I don’t pay much attention to what my competitors think of me,” Scanzoni insists. “I can’t control what they think. What really matters is what my clients think and what people within my own organization think. And I think, based on what we negotiated during the upfront, our clients are pleased.”

Despite the doubters, Scanzoni most definitely has plenty of admirers among the higher-ups in his own organization.

Chief among them: GroupM’s global CEO, Irwin Gotlieb, who has worked with Scanzoni for 29 years, first at D’Arcy Masius Benton & Bowles and then at its media unit, Televest. Gotlieb left Televest (which later became MediaVest) in 1999 to join WPP Group, where he started its media agency, MindShare. WPP later acquired Mediaedge:cia, forming GroupM.

Scanzoni left MediaVest in December 2000. Then, after a yearlong hiatus due to a non-compete clause in his contract, Scanzoni, in January 2002, joined Mediaedge:cia as president of broadcast, replacing Bob Igiel, who had retired.

“I stayed in touch with Irwin and talked about rejoining him when my non-compete ended,” Scanzoni remembers.

A year into his job at Mediaedge, in 2003, Scanzoni was promoted to chief investment officer, overseeing not only television buys but also print and nontraditional media.

It was Gotlieb who, in 2006, promoted Scanzoni to chief investment officer for all GroupM agencies.

With Scanzoni overseeing buying for all three GroupM agencies, Gotlieb can focus on his many duties as head of GroupM.

“If it was my own money that was being spent, there isn’t anyone I’d rather have managing it than Rino,” Gotlieb says of his longtime colleague and friend. “When putting together his team, Rino gets people who not only know how to do the job, but who also care about doing the job. That’s an important distinction.”

Marc Goldstein, CEO of GroupM North America, adds, “If there’s any individual who has all his ducks in a row going into marketplace negotiations, it’s Rino. Preparation is his biggest asset. He has brought a more analytical thought process across all three GroupM agencies, particularly with his integration of research into the marketplace analysis and media-buying process.”

While he misses the day-to-day rush of front-line negotiations, Scanzoni says he really no longer gets involved that closely in the process.

“I strongly believe that a centralized negotiator for all three GroupM agencies is not the way to operate in this marketplace,” he affirms. “The buyers at each agency understand the specific and individual needs of each of their clients. I just help them go into the negotiations with all the information they need to make sure they can get the best possible deals for their clients.”

Scanzoni divides his time fairly equally between his role as chairman of Mediaedge and CIO of GroupM. His most intense work starts in the late fall and goes through the late spring, just before upfront negotiations in May.

“We begin looking at the marketplace for the following year in the fall of the previous year and it’s a continuous process of trying to determine how things will play out and what strategy should be used for our clients,” he explains. “This year, things are going to be delayed a bit because there is a delay in getting all the C3 data. It is going to take us more time to determine what effect the new C3 currency is having on the ratings and the marketplace.”

One of Scanzoni’s goals is to see how the C3 negotiating currency can be improved going forward.

“While we are using an average commercial rating per show right now, one of the things we are looking at is the difference between commercial ratings within commercial pods during a show,” he says. “And we are examining that for both broadcast and cable programming to see what the differences are there. We are always looking for ways to maximize our clients’ buys. Maybe the next step will be to negotiate using average commercial rating per pod within a show.”

While Scanzoni believes pure second-by-second commercial ratings data would be ideal (something Nielsen Media Research cannot currently provide but other companies are working on), he concedes data that granular will take years to measure and to establish as a currency.

“Nielsen would also have to drastically increase its household sample, maybe as much as fivefold, to make that data more stable,” he says. (Mediaweek and Nielsen Media Research both are part of The Nielsen Co.)

Another possible direction would be mining set-top-box data from TV-viewing households—but even that, he thinks, won’t materialize for at least five years down the road.

“It’s clear that the industry has to begin to provide us with more and more granular data, but that is going to happen in stages that will take some time,” he says.

In the meantime, Scanzoni and his team will continue to bury their heads in data, with the mission of providing the best edge possible for GroupM clients.

GroupM honcho Gotlieb trusts Scanzoni to run his own show. “Irwin pretty much leaves the overseeing of the buying process up to me,” Scanzoni says. “Most of my conversations with Irwin these days are about where we should be taking GroupM going forward—what data we should be going after, what investments we should be making, more long-term business strategy aimed at enabling us to continue to bring in more business.”

Even so, Scanzoni points out, his longtime mentor Gotlieb—still a lover of the television business—sometimes can’t resist throwing in his two cents or inquiring about the negotiating process.

“As busy as he is these days as worldwide head of GroupM, Irwin always wants to know what’s going on,” Scanzoni relates, “particularly during the upfront negotiations. Even if he’s on the road, I usually hear from him every other day at least.”

As busy as Scanzoni himself stays these days with his GroupM and Mediaedge chores, he realizes there’s more to life than knocking heads with the networks. It’s a lesson he learned during his hiatus in 2001. “I’m an avid skier,” he reports. “During my year off, I must have spent about 70 days skiing in the Western U.S., in Canada and in Europe.

“I’m glad I got the chance to do it back then, because I don’t know when I’ll get another opportunity like that,” he adds. “But it did make me realize that work is not everything, and that there are things you need to do outside of work.”