• by David Goetzl , March 23, 2006

Kia Motors marketing chief Ian Beavis, who famously swore off broadcast advertising in a previous job, continued to needle the networks yesterday, warning them to stop bragging about rate increases, which he said makes it difficult for clients to justify the escalating costs to their top management.

Beavis said his CEO grows angry at news reports about how successful networks are at extracting more and more dollars from marketers, leading to greater scrutiny of his company's spending on network television and a potentially lesser budget.

"Except oil companies, no one else boasts about what they're taking from consumers," Beavis said in a provocative address to the Association of National Advertisers' annual television forum.

Beavis, vice president of marketing at Kia Motors America, said he wants to increase his television allotment--but finds it hard to justify, as his colleagues on the financial side are confronted with news about the networks' growing coffers. He said the issue peaks around Super Bowl time every year, when figures such as $2.5 million per spot begin to circulate.

Beavis, who dropped all network spending in 2004 when at Mitsubishi, said he spoke with more than 20 other marketers prior to his speech, and all expressed the same frustrations.

Jon Nesvig, president of advertising sales at Fox, who was in attendance, said that news about rate increases rarely starts with the networks, and he and his colleagues are not the ones "pushing that agenda." He said that top management at some client companies may be "listening to the trade press rather than their own people."

Nonetheless, referring to Beavis, Nesvig said: "Unfortunately, if it's affecting his ability with his management, it is an issue."

The increased coverage of the media business--with more trade outlets and a greater interest by the consumer press--over the last decade may have resulted in a heightened focus on topics such as each network's upfront performance, including total dollar amounts and CPM results. At the same time, top executives at media companies often speak about issues such as scatter market pricing in conference calls with Wall Street analysts, leading to the increased coverage.

Beavis' comments stirred at least one person to immediate action. A questioner--who weighed in via anonymous inquiry cards--suggested that his decision to halt network spending at Mitsubishi "killed" the brand in the United States. But Beavis said moving away from television was not the issue. Instead, he said, "the brand had more problems than you could count before I even got there."

Beavis had other advice--or a wish-list--for networks in his speech. He implored them to employ commercial, or minute-by-minute, ratings when negotiating with buyers and to alter the timing of the upfront to be more in sync with companies' fiscal years. Networks "should conform to the financial needs of the client," he said.

Beavis' advice wasn't limited to networks. He asked his marketing colleagues to produce better and more engaging creative, and not to be afraid to drop an outlet from a media plan. "There are no 'must' buys," he said. To agencies, he directed them to "remember you work for the client and not the network"--and to stop relying on "the 30-second drug."

Other news from the forum included:

A top ANA executive said a strike is likely when the actors' unions contracts with the ad industry expire this fall. "The chance for a strike is high, and I think people need to plan accordingly," said Dan Jaffe, the ANA's executive vice president of government relations. Among the reasons, Jaffe said, is that the new leadership of the unions is admittedly "more radical" than its predecessors.

One main issue is how to compensate actors for their work when it is used on new media outlets such as iPods, cell phones, and broadband. Jaffe suggested that marketers who know they have a campaign breaking near the end of October--when the union contracts are scheduled to expire--stockpile inventory so the campaigns can run their course in the event of a lengthy strike. He also suggested marketers ensure that contracts with star talent are written to prevent interruptions.

The ANA and Forrester Research released a new survey reflecting marketers' frustrations with television. Among the results: 78 percent of advertisers feel traditional television advertising has lost effectiveness in the last two years (133 advertisers representing $20 billion-plus in media spending, including Johnson & Johnson, Pfizer, and Verizon, participated.) The survey also found that 97 percent feel the television industry needs to rely on commercial ratings, not simply program ratings, for audience metrics.

Regarding the burgeoning DVR issue, almost 70 percent think increased DVR and VOD adoption will reduce the effectiveness of 30-second spots. And when DVRs reach penetration of 30 million--Forrester predicts they will be in 43 million homes by 2010--nearly 60 percent of advertisers will spend less on television.

American Express executive James Hedleston said the sky-is-falling view of the value of television may be "a bit of a red herring." Nonetheless, he said his company has moved to a more platform-neutral approach to planning and no longer classifies the medium as "television," instead going with "rolling video stock," a label which encompasses broadband, VOD, television, and cinema advertising. Multiple media were used in American Express' recent campaign featuring director M. Night Shyamalan. Although the campaign included a two-minute spot during ABC's Oscar broadcast, it also had other video incarnations. But Hedleston, the company's vice president of global media, said cinema--which American Express uses frequently--wasn't one of them.

The reason: it was not Madison Avenue, but Shyamalan himself who vetoed the idea. Apparently, the famed director, who was born in India, believes that cinema advertising has a deleterious effect on the movie-going experience in his native country, where a film will be stopped midway for a couple of minutes of commercials before resuming. "He felt it ruined his experience," Hedleston said.