Fox is in talks with TiVo about testing a new, proprietary technology that would enable advertisers and agencies to replace commercials embedded in programs recorded on their digital video recorders with fresh, time-relevant spots. The plan, which was unveiled Thursday by Fox sales chief Jon Nesvig during a panel discussion at MEDIA magazine's Outfront '07 conference in New York, could prove to be a solution to the concerns of some advertisers about the value of time-shifted TV advertising buys. "As long as that program is on a TiVo, we have the technology in there to have a timely commercial played back," Nesvig said, describing the technology as "time-dependent replacement commercials." Nesvig said Fox has applied for a patent for the technology, which was developed by Fox engineering chief Andrew Setos, but that a test with TiVo is likely soon. He said he was unclear about some of the technical aspects of the new technology, but that he believed it might be a panacea for debate surrounding the relevancy of time-shifted ad exposures, which has emerged as a one of the central debates surrounding Nielsen's new TV ratings streams, especially how advertisers and agencies might use new average commercial minute ratings in this year's upfront. Some marketers, especially ones promoting time-sensitive messages such as theatrical movie releases, or retail oriented ads, have said they don't see much value in paying for ads that are time shifted upwards of seven days later. It is a concern that impacts two of the biggest and top-paying ad categories - automotive and movies - which also happen to be two of Fox's biggest categories. "It will be of value to somebody," Nesvig said of the new time-dependent advertising technology, and he said Fox would likely license it to other networks and technology providers as part of a broader marketplace solution to nonlinear advertising exposures. While Nesvig deferred technical questions to Fox's engineering department, he described the method as one that would send new spots during the wee hours that would replace older spots recorded on a DVR hard drive. "Each morning we can send new commercials to the box, so that whenever the viewer plays it back, a timely commercial appears."
In a surprise move, Nielsen Thursday informed clients that it has restructured its management team, dividing its operations among two key executives - Dave Thomas and Jim O'Hara - who will oversee all client-related and product related activities, respectively. Thomas, who had been senior vice president-strategy and business development, and has long been Nielsen media chief Susan Whiting's right-hand man, was named president of media client services, responsible for all of Nielsen Media Research and Nielsen Entertainment, Nielsen//NetRatings, and BuzzMetrics services, as well as Nielsen's collaboration with Arbitron on Project Apollo. O'Hara, who has been senior vice president-CFO of Nielsen's Media Measurement and Information Group, becomes president of media products, responsible for specific products and groups, including the so-called "Anytime Anywhere Media Measurement" (A2/M2) initiative. The moves follow a the restructuring of Nielsen Co. late last year following its buy-out by a group of private equity firms and the installation of former GE manager David Calhoun as CEO. In that restructuring, Nielsen Media Research CEO Whiting emerged as executive vice president of Nielsen Co., and the No. 2 person underneath Calhoun. In some ways, the elevation of Thomas and O'Hara should not be a surprise. The team effectively took over all of Nielsen's media operations when Whiting took an eight-week leave of absence last summer to adopt two children. It's unclear what the ascendance of Thomas and O'Hara mean for the rest of Nielsen's management team, or whether any key executives left as part of the moves, but all of the media researcher's key managers now report up either through Thomas or O'Hara, with the exception of Chief Research Officer Paul Donato, and Chief Technology Officer Bob Luff, who continue to report directly to Whiting. Among the key executives reporting to Thomas now are of Executive Vice President-Client Services Sara Erichson; President of Nielsen Music and COO East Coast Operations for Nielsen Entertainment Rob Sisco; and President of Film and Home Entertainment Howard Ballon. "While many of our roles within the Nielsen Company are changing, what is unchanged is our commitment to providing you with information of extraordinary value - timely, accurate information you need to succeed," Whiting said in the memo.
This year's TV upfront will operate much like it did a year ago--even in the new growing digital age. Change is coming, but more slowly than media observers want. "You can't blame networks--networks, cable, and syndication--for being fairly comfortable and fairly confident in being business as usual," says Jack Myers, president of Myers Publishing LLC, during a TV panel at MediaPost's 2007 Outfront conference. He says this is especially true "when the traditional models are continuing to work." What stuns Meyers is that the nets not "more radically alter the models of supply and demand and commodization that are clearly moving forward." Myers doesn't think networks are analyzing issues, such as electronic media buying and selling. As for the coming of commercial ratings, panelists complained that networks have it wrong. Marketers want to pay for how their commercials perform, which could mean a lesser charge than for program ratings. Critics counter that unlike TV programs, creative decisions about commercials come from the marketers themselves, so they should be held accountable. "The burden is being placed on the messenger, rather than the creator of the message," says Lydia Loizides, vice president of new media for Paradigm, a entertainment talent agency. Myers adds: "I don't quite understand why the networks are being penalized for commercials sucking." Mike Bloxham, director of research and insight, Center Media Design for Ball State University, says the media should be more sharing with their advertising research to improve creative execution. "The one thing worse than an ad that sucks," said Bloxham, is "an ad that sucks that I see four times in the same hour. They don't have responsibility to their own advertisers, but they have responsibility for their own business." A frequently heard charge: TV sales executives seem to be stuck in the same old issues, like Nielsen measurement. The focus should be on measuring specific consumer results. "What they are doing is creating more micro-data that further complicates the equation, rather than clarifying it," says Myers. "It's a dangerous trend for the networks to be paying more attention to Nielsen for micro-data and not having the research and the funds to do more on effectiveness and accountability." The panelists also believe the Internet's adaptation of a TV model--using 15 seconds and 20-second commercials--is taking a step back. The Internet should be developing its own unique ad model that can better target consumers. "The problem is we are still working with traditional people who are holding onto their jobs and want to until they retire," says Mitch Oscar, executive vice president of Carat Digital. "The younger people, who have a lot of intelligence but not enough business savvy, are trying to understand how everyone can work together." There are some areas of hope for change. Television's marketers are slowly moving toward better creative, as well as better interactivity, when it comes to addressable set-top boxes in some cable systems--boxes that can target advertising to specific consumers. Carat's Oscar said Chase credit card, his client, is doing a second-quarter test on Charter Communications and Time Warner cable systems. "We are going to protect the consumer identity in doing some sort of blind matching for certain demographics. We'll do that with some banner ads on TV, as well as micro-sizing long-form video." With all new digital platforms growing, there is some confusion among creative and media executives, who tend to work in silos when dealing with traditional media. New, improved communication is vital. "It's got to be an economy of scope and understanding," says Oscar. "The possibilities of what we can do." Media agencies need to take the lead in some digital deals, provided "the creative people figure out what we can do." View a full video of this panel here.
Cable ad sales executives may be leery about the viability of commercial ratings at this year's upfront, but many are ready to solve one major advertiser complaint: long, boring-looking commercial pods. Among all national media, cable networks have been plagued with having some of the longest commercial pods. In addition, a large percentage of their "A" positions--the first commercial in a pod--is typically for cable networks' own program promos. All that is set to change. The Comcast group of networks, for example, is looking to sell those "A" positions to advertisers. "We figure the solution lies with the viewer," Dave Cassaro, president of advertising sales for Comcast Networks, told an audience at MediaPost's Outfront Conference. "We want to make the experience better for the viewer," he says. "But you can't rely on one technique." Cassaro says mixing up commercial pod lengths will work well with the original programming efforts of an E! or a Style network. Turner Broadcasting is considering "bit coms" on TBS--short commercials after a program break that have comedians selling a product with a stand-up edge. Linda Yaccarino, executive vice president and general manager for Turner Entertainment Sales, says: "It makes sense to have a funny commercial in a funny program on a funny network." Ed Erhardt, president of customer sales and marketing for ESPN, says ESPN is inking deals in which one advertiser will sponsor an entire single edition of "SportsCenter." Still, many of these new efforts could lead to even more commercial "clutter," says Yaccarino. Yet overall, media agency executives agree that these types of commercial changes are necessary to keep audiences attentive in between shows. Bill McOwen, director of media investments for MPG, says cable needs to do more: "Throw the public a curve ball--have a 50-second or 60-second or two-minute break." Cable executives are ready to work with marketers to create these new efforts, but Erhardt says it needs to be "contextual" with the program--otherwise it doesn't work. McOwen adds: "When I watch television, I notice there is no story being told in the commercial break. That feminine-hygiene commercial that runs next to the automotive spot has people leaving the room." Still, cable executives approach the issue of commercial ratings in the upfront cautiously. "Cable needs to make sure the data is accurate, consistent, and most important, predictable," says Turner's Yaccarino. "We are not there yet." But she added that under the right conditions, commercial ratings would play a role in the upfront negotiations. ESPN comes at the commercial-ratings issue--along with the sometimes-attached metric of DVR viewership--from a different angle, since sports is virtually always viewed live. ESPN's Erhardt says for sports programmers, "the ability to monitor regionalization [of commercials] is pressing. Nielsen is working on this. In sports, of course, we regionalize a lot of our programming. I know that Fox and CBS will have the same challenges with the NFL." Even then, media executives are concerned about back-office research systems that could be overloaded with new data and metrics. Says Larry Novenstern, executive vice president and joint managing director of Optimedia: "I'm a little concerned about overall stewardship, and how many people need to be hired to get these things done."
"It's a gold rush." The phrase reflects both the mushrooming presence of out-of-home networks and the increasing attention from advertisers large and small. The explosion recently drove industry leaders to form their own association, the Out-of-Home Video Advertising Bureau. At the out-of-home video panel at MediaPost's Outfront Conference on Thursday, it was easy to see the value proposition for each sub-category. The industry was united in the medium's reach and possible scope. Cliff Marks, president and CEO of National CineMedia, says that since cinema is part of American culture, it allows advertisers to reach consumers with "40-foot screens, Dolby surround sound, in a lights-down, highly engaged environment." Likewise, Mike DiFranza, the president and CEO of Captivate Media, alluded to the appeal of video in office elevators, which allows advertisers to reach well-heeled workers seeking to avoid eye contact during vertical transit. Jim Deveau, senior vice president of marketing for the In-Store Broadcasting Network, was even more basic: "There is no off button; there is no channel to turn." What's more, IBN video content is "involved in the purchase decision stream," close to the cash register. By investing heavily in their digital infrastructures, all the networks boast a high degree of regional and local target access. IBN, for example, takes content to the level of grocery-store aisles. David Sommer, managing partner of MEC Retail for Mediaedge:cia, confirmed that "local-based targeting is huge," with major brand advertisers like Campbell asking how to get into digital out-of-home. Stephen Diorio, president of Profitable Channels, praised digital out-of-home video's potential to be a "triple threat" of "targeting, national reach and measurability." But there are hurdles still to be cleared, according to Diorio. For one thing, the "ad community is looking for scale" in the networks, which would justify "throwing their creative talent at it." This requires grouping the various out-of-home video networks, which in turn requires metrics that allow measurement across different outlets. The network execs present acknowledged this need, with DiFranza calling for measurement approaches that allow advertisers to "analyze and rationalize the different networks to combine them ... in a critical manner." Putting himself in the advertiser's shoes, he asked: "How do you normalize the ratings count?" Sommer reminded listeners of the useful role media agencies can play. "I don't blame networks for going to clients directly," but the issues of scalability, measurement and coordination suggest a need for third-party involvement, he said. Right now, agencies "are cobbling it together." Beyond the major brands, IBN's Devau said out-of-home digital video provides a unique opportunity for second- and third-tier brands that are often priced out of mainstream TV advertising. By spending their smaller budgets on place-based digital video advertising, they find a cost-effective way to join the "evoked set" of products for a particular category that other brands dominate through heavy spending. Finally, Sommer forecast increasing interactivity between place-based video installations and "small screen" mobile devices carried by consumers. Noting the success of the "Shopping Buddy," which allows consumers to receive personalized offers from grocery-store owners, Sommer mused that similar functionality may soon extend to mobile phones and PDAs, in coordination with video displays.
A day after Betty Cohen resigned as head of Lifetime Entertainment, the company has tapped ABC programming veteran Andrea Wong to take over just weeks before the upfront. Wong has been executive vice president-alternative programming, specials and late night at ABC since 2004. She will hold the title of president-CEO at Lifetime, which includes leadership of the flagship eponymous network, the Lifetime Movie Network and a slew of new media ventures. The announcement came from Anne Sweeney, who serves in one role as president of the Disney-ABC Television Group, and John Conomikes, director of the Hearst Corporation. Lifetime Entertainment is a 50/50 joint venture of the two. "Andrea is a straight shooter who is smart enough to know which challenges to undertake and fearless enough to see them through," Sweeney said. "She is also a true consumer-facing executive, one who understands her audience and uses her experience to speak to them in compelling ways." Wong came to ABC in 1993 and joined the news department's research operations, moving to the entertainment division a year later. She is credited with bringing "Dancing With the Stars" to the U.S.--and developing frequent top-10 performer "Extreme Makeover: Home Edition." Wong's first reality foray at ABC was the one-time smash and still-successful "The Bachelor." "Lifetime is one of the most distinct, powerful and evocative brands on television, and I'm thrilled that Anne and John have entrusted me with the opportunity to shepherd it into the future," Wong said. "I'm especially looking forward to working with the incredibly talented group of people at Lifetime to unearth future growth opportunities that will extend and deepen Lifetime's marketplace dominance." Two years ago, Lifetime was third in the ratings; now it is sixth.
While some leading buyers are clamoring to use commercial ratings in upfront negotiations as soon as next month, an executive who engineers a massive budget said Thursday he'd like to see the industry hold off for a year. Larry Blasius, executive vice president/director of negotiations at Magna Global, hopes this year would serve as a "transition," in which buyers and sellers would both evaluate the new data Nielsen releases in late May--comparing and contrasting the new with historical performances--and avoid rushing into premature deal-making. He cited the nexus between commercial viewing and DVR-enabled ad-skipping as a particular area of concern. "Let's sit back, and see what the data says," Blasius said on a panel discussing the coming broadcast upfront at the MediaPost Outfront Conference. While he favors a "more measured" approached, he will be guided by marketplace demands. "We'll do whatever we think is in our clients' best interest," he said. He declined, however, to suggest specifics, citing client confidentiality. Fox president of sales Jon Nesvig, who joined Blasius on the panel, said he and his colleagues on the broadcast sell-side are keeping an open mind about how the coming release of commercial ratings might affect the $8 billion-plus [prime-time] upfront market. "It's going to take [getting] a handle on what the marketplace is," he said. "All of us on the sales side are willing to look at it." A major question is: which faction of the buy-side will trump the other? Will it be those pushing to use commercial ratings--something clients have lobbied for? Or those in the Blasius camp, who prefer to engage in tests and slow implementation over the next year? A similar divide looms on the DVR issue between buyers and sellers. Both agree they must settle on one standard currency. Will they agree to negotiate on just "live" ratings as they did a year ago, or based on ratings that incorporate some DVR-enabled, time-shifted viewing? "We've got to come together on this issue. Period. End of sentence," Blasius said. Dennis McCauley, another panelist and co-president of sales at Univision, seemed slightly more eager than Nesvig to negotiate on commercial performance: "We're prepared to go whichever way the marketplace goes." Supporting McCauley is some buyers' increased--although slow-moving--interest in Hispanic media. Also, for the first time this upfront, Univision will negotiate off the same general-market ratings as the English-language networks. And it stacks up auspiciously as the "fifth network," topping the CW in the target 18-to-34 demo. McCauley also said his network has high viewer retention during commercials, losing only about 4% of its audience on average. "If people want to go with commercial ratings, we have a great story," he said. He also touched on the reason why highly regarded media veteran Joe Uva was recently named Univision chief executive. "The reason he's the CEO," he said, "is we realize we have this tremendous growth opportunity." Nesvig also expressed general optimism about the market, particularly with the Dow booming and the economy robust, adding that Fox is coming off its most successful upfront ever--estimated at $1.7 billion by Merrill Lynch. The network is in the midst of its most successful scatter market, with still several months to go.
The broadband video market is coming, but nobody knows when it will arrive or what it will look like. The ad model is still up for grabs, and the audience size is anybody's guess. It sounds like a Beckett play; instead, it's an industry reality that generates lively debate. Adam Gerber, the vice president of ad products and strategy for Brightcove, voiced the key point of agreement during the broadband panel at MediaPost's Outfront Conference. Digital delivery systems must be "respectful to the consumer" by enabling content "to flow to multiple platforms" on demand, in a format suitable to each. Rebecca Paoletti, the director of video strategy for Yahoo, concurred, emphasizing the rise of mobile platforms that demand crafting relevant information for consumers. "You have to reach them where they are," she said. Yet a warning was issued against the industry taking a binary "either-or" attitude, positioning broadband video against "traditional" TV. Jeff Marshall, senior vice president and digital managing director for Starcom USA, noted that "Grey's Anatomy" is both a huge broadcast success and one of NBC's most-streamed online programs. It reinforces the need to reach consumers with what he termed "liquid" content: video that can be reshaped in multiple formats suitable for a wide variety of platforms. There were, however, disagreements about the penetration of broadband video verses traditional TV. Matt Wasserlauf, the CEO of Broadband Enterprises, was bullish on broadband, saying the inflection point has passed. "The next great hits are being purposed and programmed for the online medium," he said. Later, Wasserlauf raved that there are "7 billion streams a month," as well as new content sources: "We all take shots at user-generated content, but there's a value to it." Gerber served as a foil for Wasserlauf in the playful dispute that followed, presenting a slower, more conservative model of incremental adoption in the next 10 to 20 years. While "we might have a nice marketplace for two- to-three minute clips now," on-demand distribution of longer-form content will be "a long time coming," he predicted. Gerber pointed to major infrastructure upgrades, as well as the institutional inertia inherent in legacy business models from traditional TV. Despite the attention digital receives, Gerber added that it "doesn't mean there aren't millions of people, 12-24, who watch TV," as demonstrated by the success of "American Idol." "Name me one Internet hit that will drive 70 million viewers to vote with their mobile phones." The panelists broadly accepted Paoletti's assertion that the "number of streams that are monetizable are small." The question becomes: what is the business model in the immediate future? How should agencies and media companies proceed? Here the panelists found common ground, agreeing that broadband video content doesn't necessarily equate to video-only advertising. Jeff Meyer, senior vice president of interactive ad sales for the Scripps Network, advocated surrounding the video with other content, thereby engaging in "holistic integration." Similarly, Marshall asserted that the online community creates opportunities around content to reach consumers. "Is it a five-second video ad, a quick parlor game, a community? It's not just video, or text, or audio." When video ads are appropriate, Marshall said, "they don't want to have the 16 minutes of pod time that's the average" on traditional TV. On this note, Wasserlauf confidently asserted "you can tell your story at any length. You can sell anything in five seconds, 10 seconds; we're going to figure it out." Meyer agreed, noting that it requires "gearing that massive agency machine that created those 30-second spots for years, really well." Gerber, noting the potential of short-form ads when sparingly deployed, says: "When you reduce clutter, you increase the value of the advertising that's delivered." Gerber castigated network executives who refuse to acknowledge this reality, as well as the ability to measure addressable digital advertising relative to traditional TV.