Publicis Media is making a $50 million local TV buy for one of its most challenging clients using an automated platform system, involving 90 markets across the country. This is just one of the strategies to improve the automated ad buying process to increase the relevance of local spot discussed at TV2020 on Wednesday.
NEW YORK — Unsatisfied by the unwieldy, expensive way that most local TV is bought and sold, Publicis Media is taking matters into its own hands with a new test. It’s in the process of making a $50 million local TV buy for one of its most challenging clients using an automated platform system, involving 90 markets across the country. It launched in seven markets last week; added another 20 markets yesterday (Oct. 18); and will fold in the rest next week.
So explained Frank Friedman, president of local investment at Publicis Media, in speaking at TVNewsCheck‘s TV2020 spot television panel session at the NAB New York Show Wednesday.
Local spot is “reducing its relevance” in the overall landscape of media because of the costs and time involved in buying it the traditional way. “It takes us 39 steps to get a buy done,” Friedman said, speaking about the process of buying TV spot avails. “We are pushing passionately to do a different model of how we transact. Because if [agency buyers] don’t do it now, our CFOs are going to do it for us.”
In discussing the $50 million automated buy, Friedman said: “If we can prove it out on the front end, that we can transact this business, the other part is: ‘Can we steward it and prove it on the back end?’ ”
The spots will start to run in January, and Publicis should know by February if it’s a success. “This is not a race to the bottom; it’s not to lower [spot fee] costs. It’s to take the friction out of how we do business.”
Another panelist, Becky Meyer, VP of national sales at Gray Television, is participating in the Publicis automated deal. “It started this week with seven to 10 stations in, and we’re good to go,” she said.
Meyer explained that in her conversations with Publicis and other agencies that are interested in automated deals, the emphasis hasn’t been on lowering spot rates. “We are operating on SSPs [supply side platforms] where we control the rates. We can choose to accept or reject a buy that comes through programmatically.”
Despite the attractiveness of what Publicis is working on, the other broadcast exec on the panel said his company is holding off on the deal, for now. Val Napolitano, EVP of programmatic at Hubbard Broadcasting, explained: “We’d very much like to participate, but the ecosystem for automated platforms is very complex.
“There are many different constituencies that enter into the equation. You have the supply side platforms, the agencies, the advertisers. You have the broadcasters. And the reps are a vital ingredient in the process. There has to be some redline work done to satisfy all the constituencies,” Napolitano said.
But that will change. Later in the session, Napolitano said that Hubbard might be up and running on a few of the SSPs by January.
Ed Gaffrey, managing partner of GroupM North America, said that his company likes to do automated spot buys whenever it’s possible. “It takes friction out of the system. It makes people’s lives easier. And it lowers the overall cost for our agency, which is good for our clients.”
One of Gaffrey’s major criticisms of local TV sales involves the audience data. “It is not measuring the ad. It’s measuring a quarter-hour program thing. So it’s a different animal that then requires people to do different translations, because it’s hard to understand what the true effect is.”
Station measurement is so different that it “kind of bollixes up our plans,” Gaffrey said. “If we could get to a minute-level rating, which today comScore can do, we can start to look at things on a more common basis. But at this point, programmatic’s nice, but can we at least fix the measurement?”
There has been consternation in the business that if automated platforms take a greater share of spot transactions, rep firms could be negatively impacted. But Napolitano, who used to head the rep firm Petry TV, doesn’t foresee that. “The actual negotiation of ratings and price won’t change. What will change is the backend and the frontend. It will speed up the process. But the actual transaction isn’t going to change that much.”
Kathy Haley, publisher of TVNewsCheck, asked the two agency panelists how much spot spending would rise, if all the commercial TV stations in the top 150 markets participated in automated deals.
“In the cases that we’ve seen, when I’ve gone to a client and said that spot can be as nimble as digital … they were all over it. So I would guess at least 10% in the early days, and then more. Because we could go and steal dollars from national cable,” Publicis’s Friedman said.
GroupM’s Gaffney didn’t venture a specific percentage gain number. “But it would go up. Anything that would make it easier, people would consider it more often and earlier in the allocation. It really depends on how well it performs.”
Friedman is also hoping to solve another problem with stations: the amount of advertising that gets pushed aside during political cycles because of the intense influx of election dollars.
Friedman has a few ideas concerning how the displacement problem could be solved. “One is, could we have some of the newscasts nonpolitical? Could you take the first part of a newscast and not run ads for political [advertisers]? Could there be days of the week where you pull it off for sale?”
In particular, Friedman is hoping to make the first months of the political cycle less volatile. At that point, there’s not as much pressure on stations to run political ads.
Revenue could be affected, said Gray TV’s Meyer in response. “The problem for broadcasters is they don’t know which markets are going to be hot political markets.”
But she added: “Are there things that we can do to work with Frank’s agency? Absolutely. It’s a balance.”
Read all of TVNewsCheck’s TV2020 coverage here.