• by Joe Mandese  @mp_joemandese, March 24, 2005

Normally when they are invited to speak before a roomful of the nation's largest advertisers media buyers and sellers are deferential, if not reverential. But on Wednesday during the Association of National Advertisers' 2005 Television Advertising Forum the head of one of the largest TV players snubbed the audience on the issue of "accountability" and a top ad agency executive implied many in the room were "stupid" for not compensating agencies well enough to get the kind of media they needed. Despite the affront, the attendees seemed to agree with that latter assessment, applauding when Rishad Tobaccowala, chief innovation officer of the Publicis Groupe Media lashed out at marketers for not economically supporting media innovation.

"Unless you have really great people you can't get really great work," said Tobaccowala, adding that the way marketers are currently compensating media agencies is "stupid."

While he did not offer any specific client compensation agreements, Tobaccowala implied there is a pronounced imbalance in terms of compensation for new media activities. He said while new media currently represents only 7 percent of actual media spending by Publicis' agencies, it currently takes up 20 percent of their labor and 40 percent of the time the agencies management spends thinking about media.

"Realistically, if we don't figure this out, I don't know what business we're in," a visibly frustrated Tobaccowala admonished the audience.

While the audience seemed to take Tobaccowala's criticisms well, they appeared to chafe when during an on-stage interview Leslie Moonves, co-president and co-COO of Viacom and chairman, president and CEO of CBS, said the networks were not accountable for the ROI of TV advertising.

Asked what the networks were doing to be more accountable to advertisers, Moonves said, "That's not our job."

"I can get someone to the TV show. You have to deliver the product when they get there," he said, citing that the network shows like CBS' "CSI" and Fox's "America Idol" were still the only places where marketers could generate the mass reach of network TV.

"Where else do you get 30 million people all at once," he defended.

Moonves also implied that the network business was not "good," noting that only two networks - CBS and NBC - turned a profit in prime-time last year. Nonetheless, he said he was confident that CBS would reap healthy CPM increases during its 2005-06 upfront negotiations, and implied the network would hold back inventory for the scatter market if advertisers are not willing to pay up.

"We've always bet on ourselves," he said. ""There hasn't been a year when it didn't pay off."

On what seemed to be a conciliatory note, Moonves implied that CBS was open to discussing the issue of "integration charges" with its advertisers, a hidden fee that costs advertisers about $100 million a year on the Big 3 broadcast networks who continue to charge for "labor" associated with integrating commercials into TV programs, even though the whole process is now digital and seamless and no other networks charge for it.

"Oh well, no matter what anyone says, there is still a cost associated with putting these commercials in our shows," insisted Moonves, adding, "We're looking at it. We're willing to talk about it."

Moonves said CBS also is "looking at" commercial ratings, but would not comment on the network's position on the subject, which is also paramount for national advertisers.

On the new media front, Moonves said CBS still hasn't figured out the video-on-demand business model, is trying to work out the branded entertainment model (see related story in today's coverage), and downplayed the significance of digital video recorders, noting, "DVR penetration is still relatively minor. It's 6 to 7 percent of the country."

He said CBS also is beginning to explore ways of utilizing a wide array of new technologies for distributing CBS' programming, including cell phones.

"There's even been talk about doing a one-minute 'CSI'" on cell phones, Moonves told the ad executives. "Someone gets killed the first few seconds. The crime gets solved in the last few seconds."