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.
TVNEWSCHECK'S TV2020
Publicis Agency Sets All-Automated Spot Buy
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.
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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.
Comments (8)
Kristine Melser says:
October 19, 2017 at 8:38 pm
Let’s dissect what they are not saying: “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.” ~
Local TV is the strongest it can be right now thanks to cable cost hikes reintroducing people to the antenna mixed with streaming. The cost and time involved in the 39 steps to get a buy done Friedman is looking to save his agency money so he can make more and not have to hire and train new people. Is the talent pool that bad for millennials these days ?!
‘Can we steward it and prove it on the back end?’ ~
Unfortunately for Friedman Live TV has late runs, program changes, breaking news cut ins due to the formerly employed media buyer just shot 10 people in a Mall and is now a headline, all of these things sometimes require logical thought for processing and negotiation to ensure the client is getting what they paid for in the end.
Is Friedman prepared to pay one cost based on supply and demand to get it that comes with no added value, no posting, no frills and no special sponsorship mentions that can make a client stand out in the clutter and sell more product? In the end it is all about selling a product for a client and helping their sales, not spending their money and trying to save money for the agency. Client First. Then all things fall into place for success.
Kristine Melser says:
October 19, 2017 at 8:47 pm
One more time: 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. ~ If someone from your agency is calling a commercial a quarter hour program “thing” and cannot explain this in laymens terms with a proper analogy, get a new agency. The smart ones can translate this accordingly for clients. Remember you are paying for your ad to be seen infront of a programming audience and each program is different, if you want to see measurement for your ad in the pod, you better make damn sure the creative is good and tells a story so it won’t get skipped through. Yes, this is when that creative team needs to work harder.
Kristine Melser says:
October 19, 2017 at 8:52 pm
Last one: “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.” ~ Just because digital is easier to buy, does it mean it is working ? Ask Proctor & Gamble. Sometimes you have to do the work to see the results, its called a job! 🙂
Cheryl Thorne says:
October 20, 2017 at 3:37 pm
The future of an attenuating business…The networks should have jumped on the Upgrade Selling platform years ago but now its too late and Supply is abundant and Demand is down..bad news…What used to be a great business is a commodity-driven business now..lazy sellers quoting avails!!!..As the lazy National rep avail carriers lost their jobs at the rep firms they brought the same lazy act to cable and other platforms and this is what we now have…Used to be a great business..Now its a business of who does the best entertaining and can buy buyers off with the best trips as the clients get screwed!!
jackie postell says:
October 20, 2017 at 5:10 pm
Bestyet: one of the things you hear constantly in this business, especially from those who don’t have a background in sales, is “this is a commodity business”. Well this is a commodity business because any business that has disposable inventory is by nature a commodity business. This is and always has been a supply and demand business and the demand is determined on the competitive landscape of the marketplace. The business model hasn’t changed and any sales manager emotionally tied to their inventory should be terminated. The tie breaker is the relationships formed at the buying and supervising levels. That’s where quality salespeople and sales managers make their money. This move to programmatic buying isn’t new. Buyers have had the ability to auto plan and auto schedule buys in their systems for years.
The wake-up call is this: sales managers need to fight to travel and keep those budgets in place. The rep business is dying and all business needs to be taken in-house. We have to be the most visible managers in the market; that’s my mandate to my team. We have to provide the best client service: post and be watching delivery every day, post sell success and pre sell opportunities and then we must get back to our roots as local broadcasters AND CREATE LOCAL PROGRAMMING and kill off syndicated stripped programming. We have to create local programming above and beyond local news and create digital webisodic experiences. We have to deliver content unselfishly on multiple platforms and sell experiential media…and prepare for ATSC 3.0! If we don’t embrace and program for new viewing habits (and it’s not just for millennials) we will die.
I think this is a great opportunity to re-invent local television but it will require the ability to experiment and fail to find the right niche.
Brian Bussey says:
October 27, 2017 at 4:18 pm
the rookies here cannot believe I get a million dollars from just 2 local advertisers who do not post. They monitor their registers ringing. Did I mention I get a 100 share of their business ? They pay the rates I tell them to pay. I have buyers who have told my managers that I over achieve my share based on my stations ratings. I have clients who have told my buyers that their contract will be cancelled the moment I am not longer on the account. We might have more digital sellers than real estate agents in my market. My clients tell me they are sick of hearing that everyone can sell everyone else’s impressions. That is proving to be hard to overcome. Young adults eventually grow up. They might think they have unlimited time to play with their toys. This to will change…
Cheryl Thorne says:
October 22, 2017 at 7:40 pm
Media mogul. I forgot more about sales than you’ll ever know.. putz
Cheryl Thorne says:
October 22, 2017 at 7:47 pm
Media mogul. People in local tv these days do not have the work ethic or the intelligence to reinvent anything!! You included. God bless you and good luck,