More Options, More Scrutiny For Co-Op Ad $

Not too long ago, deciding where to allocate crucial co-op dollars during sweeps months was a no-brainer: You put them in local radio and cable. Now though, new nontraditional media are roiling the formerly placid co-op waters, complicating a system that once seemed so simple.

Most local TV marketing executives and their network and syndication co-op partners seem to agree that the digital options possess great potential for reaching on-the-go consumers with timely co-op marketing messages.

But some — on both the network and station sides — still question the effectiveness of digital. And they’re proceeding with caution when it comes to moving money from the tried-and-true radio and cable to the new world of social media, the Internet music service Pandora and digital outdoor, to name just a few of the nontraditional media options now being added to the local co-op mix.

“When you talk to [co-op partners such as] Warner Bros. or CBS or ABC, they have a very clear vision of what media they believe work, because they spend so much money,” says Bill Butler, president of programming and promotions for Sinclair Broadcast Group, the nation’s largest TV station owner with more than 160 outlets.

The program providers pony up half the advertising dollars used for co-op buys, and they do so with stipulations. “They’re intimately aware of everything that works, everything that doesn’t work and everything that’s sketchy,” Butler says.

On Butler’s “sketchy” list are local and regional websites or, in marketing parlance, “geo-targeted” Internet options. In general, they don’t drive viewers to the shows promoted on the same day the messages run, he explains.

“A lot of people have tested geo-targeted Internet advertising to not great results,” Butler says flatly, though he declined to provide details. “I’ll leave it at that.”

MEDIA SPEND DEBATES

As a result of the lingering questions over the effectiveness of digital, the co-op marketing plans that stations are submitting these days to their network and syndication partners are undergoing more scrutiny than ever as the two sides wrangle over how much money to spend on the new marketing methods. Sometimes the process runs smoothly, sometimes not. It all depends on whom you talk to.

“When it comes time for allotting dollars, both [ABC and NBC] have been very generous with us, and we have worked out deals with them so that we can really use [the co-op money they provide] to the maximum in each of our markets,” says Jessica Rappaport, VP of marketing for the 21-station Scripps Broadcasting group, which includes 10 ABC affiliates and three NBC stations.

“We’ve worked with our networks on doing more outside-the-box strategies,” adds Rappaport.  “In several of our markets, we’ve done Pandora buys [and] mobile buys with a network partner on a market-by-market basis, tapping into doing things differently.”

For others, however, the experience has been quite different. One station group marketing executive says that the proliferation of new media choices has actually resulted in the networks tightening some of their policies.

“It’s gotten more complicated over the years as the networks and syndicators have put more and more restrictions on the co-op media,” says the executive, who requested anonymity. The marketing goals of stations and their co-op partners are not always in sync. And that can lead to “challenging” negotiations over co-op dollars, the official explained.

“The way the co-op works, the networks and the syndicators have certain show priorities that they want to push, that they want the co-op to be used for,” the executive says. “Those shows only air on certain nights, so certain nights will be a priority over others. Certain shows, certain nights, certain media vehicles — a network or a syndicator might really want you to invest that money in cable, while as a local station you might say, ‘I’d rather buy something that’s more targeted’ — using social media marketing, for instance. So coming to an agreement on those can sometimes be a challenge.”

Still others say it’s possible to work around network “restrictions” and policies regarding digital co-op options. Everything is negotiable, says Klarn DePalma, VP-GM of WFSB Hartford, Conn., and WSHM Springfield, Mass., both CBS affiliates owned by Meredith.

“They have specific guidelines,” DePalma said of CBS. “CBS has specific nights that they might target.” Nevertheless, he says that CBS is “open to every option that is available. They just want to know if you’re going off of the guidelines that they set. You just have to say why it’s the right thing to do and why it’ll work to increase viewership for the program that they’re promoting. You just have to talk about it. It’s a partnership.”

WIZARDS OF ‘OZ’ ADS

The same “partnership” rule applies when dealing with syndication partners too, says DePalma, who used as an example The Dr. Oz Show, distributed by Sony Pictures Television Distribution.

“[Sony] might have a plan for [Dr. Oz] nationally, so our local media campaign has to complement what they’re doing. They might already be doing cable, and might encourage us not to purchase or use our co-op for cable and encourage more radio, billboard or digital,” DePalma continues. “You can’t just go out and do it on your own. One hand’s gotta talk to the other.”

DePalma is bullish on how the 50-50 split of co-op costs allows for his station’s local news to be promoted in tandem with network and syndicated shows sharing the same promo spots.

For example, co-op allows DePalma to produce messages designed to keep the audience for Dr. Oz tuned in for the local newscast that follows the syndicated talk show at 5 o’clock. “When you’re looking at a show like Dr. Oz, you know the primary demographics are women 25-54,” DePalma said. “So you really focus on promoting his [show] with your own in media that reach that demographic, whether it’s radio or digital or Pandora or cable or my own air.”

For their part, the networks insist they’re not resistant to approving expenditures of co-op dollars on local digital media. That includes regionally focused websites; digital billboards on key commuter routes with the capability for posting up-to-the-minute promotional video; Pandora, the Internet radio service that has worked hard to attract spending from local TV promotion execs; social media Web sites, and other mobile media.

“We definitely co-op more media choices than the ‘old days’ of just radio,” says Todd Lacey, executive director of affiliate marketing at Fox.

“While radio remains a cornerstone of our co-op program, we’ve seen more and more stations requesting co-op dollars for other media opportunities such as cable, outdoor billboards, Pandora, Facebook, Google, online banner and video insertions and mall advertising, to name a few,” Lacey says.

“We want our affiliates to be able to reach their viewers on the media platforms that are most effective for their markets,” he adds. “Our approach is that as long as co-op plans are strategic and with good rationale, we will consider the proposals, and we will find a way to work with our affiliates.”

At NBC, Scot Chastain, SVP of affiliate marketing and development, says his network wants to help affiliates go beyond “the cable/radio core” with its co-op expenditures. For example, Chastain says, since NBC has used Pandora for its own marketing efforts, the network is open to hearing stations’ ideas about how they can use Pandora locally. As long as the buy benefits both parties, NBC is all ears, he says.

INCREASING THE SPEND

With all of the nontraditional media spawning new opportunities for local promotion and attracting increased spending from stations, the stations naturally would like to get more money from their co-op partners. Whether the networks and syndicators pony up more dollars depends on the situation, local TV marketers say.

“We always ask for more. Sometimes we get it; sometimes we don’t,” says Scripps’ Rappaport. “I don’t want to get into dollar specifics, but here’s what I’ll tell you: the dollar amounts vary from market to market, station to station. We try to do the maximum with the money that we have and put those dollars [toward] creating media campaigns that [get] the most out of the dollars that they give us.”

WFSB’s DePalma says he hasn’t tracked the dollar amounts and how they vary. “We normally get a very solid budget for this market [Hartford], and we take advantage of what they give us.”

Sinclair’s Butler characterized the current state of co-op allocations as “steady.”  Like others involved in the planning and execution of station co-op marketing efforts, Butler says the dollar amounts his stations’ co-op partners are willing to provide depends chiefly on the precision of the spending plans the stations propose when they apply for co-op funding.

“We have a very aggressive, planned, organized approach to co-op, and we work together with the syndication distribution companies and the networks in allocating amounts — how many days of advertising in each sweep, how many points, what’s the cost per point,” Butler says. “It’s a very organized mutually respectful process. It’s a cooperative effort and we know from experience that this investment pays off in bigger ratings.”