Targeting A Key to National Spot Success

Horizon Media's Brad Adgate is an ad guru with over 30 years in the business. He's bullish on national spot because it allows advertisers to buy any market, cherry pick markets and easily do testing. And he says the way to halt the shrinking national spot dollars is to use second-by-second viewing data and coming up with addressable ads that can be targeted to individual homes and interactive ads where you could click on your remote and get more information on the product.

For the past 11 years, Brad Adgate has been senior vice president and director of research at Horizon Media, an independent media agency with annual billings of $2 billion.

All told, Adgate counts more than 30 years keeping track of audiences and listeners and making sure ad dollars are well spent.

Other careers stops: Grey Advertising, Backer & Spielvogel and Saatchi & Saachi.

Along the way Adgate has collected a number of industry awards, but none more media-forward perhaps than that bestowed by Advertising Age earlier this year when it included him among the “25 Media People You Should Follow on Twitter.”

In this interview with TVNewsCheck Editor Harry A. Jessell, Adgate offers his thoughts on national spot’s place in the array of advertising options and what it must do to get a larger share of marketing dollars.

An edited transcript:


How does national spot stack up against national syndication and cable?

It’s got pretty much a leg up. When you’re buying national spot, you can buy any market you want. You can cherry pick your markets. You may want to buy or not buy certain markets to do some testing in and so on and so fourth. So I think that it’s still a very viable option.

Syndication is a strong competitor, but once you get past the top-tier shows, they’re not in every market. Local cable reaches only 60 percent of the country. Satellite is approaching a 30 percent market share, but there are no local avails there.

But you could buy national cable.

But it’s only 85 or 90 percent of the country. There are 210 DMAs. If you want to buy all of them or if you want to buy some of them or cherry pick them, you’ve got to buy national spot.

What is the big objection to national spot from agency planners? Is it more expensive?

Not in the larger markets — TV markets 40 and up. Below that, it becomes expensive to buy. You may as well buy network as opposed to national spot. You get more bang for your buck if you’re buying a network than if you’re buying a lot of local DMAs collectively.

Why do national spot dollars keep shrinking?

There are more opportunities out there than ever before for marketers to spend their dollars. They’re still spending a substantial amount of the budgets on television, but there are more and more opportunities.

It’s really the Web and all these other nascent media that marketers are looking at. That’s the reason local TV and national spot TV has been flat to down in recent years.

The next step in television is going to be taking the second-by-second viewing data and coming up with addressable ads that can be targeted to individual homes and interactive ads where you can click on your remote and get more information on the . Marketers are looking at this. They have said that they would pay a premium for a medium that can deliver an ad for a car to someone who is interested in buying one.

That doesn’t bode well for TV stations because they really can’t play that game, can they?

The cable box and other digital set-top boxes contain that type of information. So, they’d have to purchase it or they’d have to partner with someone like a TiVo or a Comcast to get it.

Broadcasters can get the audience data, but only cable or the Internet can target the ads.

Why couldn’t a broadcast station target an ad? Why couldn’t, say, WNBC here in New York deliver an ad for a Ford sedan if you live in Manhattan and a Ford SUV if you’re living in regions north and west of the city where the weather is worse?

If WNBC and other broadcast stations say they’re not going to go on these cable systems unless they get compensated for it, they can also demand to be treated like cable networks.

Do you think TV stations do a good job selling themselves to national advertisers and agencies like you?

Yes, I think they do. The TVB [Television Bureau of Advertising] has come in and talked about certain product categories and comparing TV to other media. Television is still the first screen and it’s still the center of the living room and the broadcasters have gotten that message across.

Let’s talk about programming a little bit. What do you think of the Jay Leno experiment so far?

Well, NBC is a client of ours so I think it’s fabulous.

I will say this: The golden age of the 10 o’clock drama in broadcasting is over. We had 30 years of great 10 o’clock dramas from 1979 when Lou Grant won an Emmy award for best drama right to this past year when ER and Boston Legal stopped production. I could give you a list of them: LA Law, Hill Street Blues, NYPD Blue, all of these shows.

But a couple of things have happened. One is pay cable. All of those edgy adult-themed dramas push the envelope a little further than the ones on broadcast do because you don’t have to worry about the FCC or advertisers.

If you look at all of the high-profile cable shows, a large majority run at 10 o’clock — like Sons of Anarchy, Damages, Mad Men and Breaking Bad. There’s been a paradigm shift from broadcast to cable in terms of — I wouldn’t call it risqué programming — but certainly adult-themed shows.

Another factor is that 10 o’clock shows don’t just compete with other 10 o’clock shows anymore. They’re competing with the 8 and 9 o’clock shows, too. What that means is that if it’s Thursday night at 10, you’re not watching Jay Leno, you’re probably watching CSI or Grey’s Anatomy or The Office on the DVR. Most people who are recording at 8 or 9 o’clock watch on the same day.

Maybe the schedulers ought to do something about that.

I don’t know what you can do because everything is on demand. What’s a schedule anymore?

So how are the broadcast networks doing this year in general?

Well, they’re doing better this year than last year. Last year, they were hit by the strike. There are some pretty decent new shows out there. All the networks have something that they can kind of hang their hat on and say this is a new show that has got potential. I don’t think they could say that last year.

They’re still losing viewers. There’s still the audience erosion that has continued for now a generation now. What’s interesting to me is that cable isn’t doing as well. Cable’s viewing is down about three or four million in primetime this year versus a year ago. It’s largely attributed to the news networks, CNN and Fox News. They’re down significantly because you don’t have a campaign this year and you don’t have the news of the economic meltdown that we had a year ago, While there’s still some erosion in viewing on the broadcast networks, cable isn’t really getting all the benefits from that.

It used to be true that the lower the broadcast networks’ ratings became, the more expensive each rating point became. Is that still true?

Yes, I think so. A decade ago, if you needed to buy 100 points and the networks were doing a 5 rating on adults 18-49, you had to buy 20 units. Now they’re doing a 3 rating so you have to buy 33 units. So, it’s a matter of supply and demand. All you’re doing is raising the demand for what’s kind of a limited supply. That just drives prices up.

It always sounds rather counterintuitive: the lower the ratings, the higher the prices.

It’s a wonderful business plan. The upfront this year was a little bit different because the networks withheld a lot of inventory, again as a way of keeping the prices up.

Typically, they sell maybe 75-80 percent their inventory in the upfront. This year, it was under 70 percent. So again, the networks can artificially create demand by withholding inventory. They’re banking on the economy improving and marketing dollars returning in the scatter market as the season progresses. That appears to be somewhat the case.

So, you think it was a smart strategy?

It looks to be working. It’s a risky move. But every month is a little bit stronger than the month before. It will still be probably 2011 before we’re kind of back up to the pre-recession levels. It was such a deep drop. It’s kind of recovering at its own pace.

What has surprised you most about the TV advertising market in 2009?

There’s been all this hype about all the different screens and all the different options that consumers have, but TV remains front and center of the living room.

One concern I have is media multitasking. I think increasingly people are doing two things at once in their media consumption and it’s not just kids anymore. It’s older folks, baby boomers. But TV is always one of those two or three activities.

And incorporating time shifting viewership into ratings still has to be worked out on a local market basis. Nielsen is talking to advertisers and stations about coming up with a currency that’s going to be consistent across all 210 TV markets.

So, you think TV stations will soon get credit for DVR viewing?

This is a point of contention, but Nielsen has said that they are leaning towards live plus same day as a currency going forward for local TV.

I notice that you have a lively Twitter account with more than 1,500 followers in which you drop a lot of facts and figures about TV viewing.

Well, Ad Age said that I’m one of 25 media people to follow on Twitter. So I became very popular, very quickly.

And why do you do it?

I do it for two reasons. One is, if I have a conversation with you and I forget to say something or if I’m reading something in the morning and I think it’s interesting, I’ll post it. I also use it as a search engine. The people I follow — a lot of them are trade or media reporters and research companies — give me a lot of information that normally wouldn’t be on my radar. So it’s fun, it’s doesn’t take a lot of time and it keeps you on top of things. I like the give and take.

Comments (0)

Leave a Reply

More News