GroupM’s Rino Scanzoni: Here’s What Media Buyers Cared About This Upfront
By STEVEN PERLBERG, WSJ CMO Today
GroupM’s Rino Scanzoni In the TV ad business, one rainmaker can dramatically change the industry.
Back in 2007, that was Rino Scanzoni, chief investment officer of GroupM, the media-buying unit of WPP LLC. Mr. Scanzoni saw the waves being made by digital video recorders, transforming viewer behavior. He inked a major deal based on three days of time-shifted viewing and effectively made C3 the industry standard for television ad deals.
GroupM, citing data from RECMA, says it accounts for 25% of the U.S. TV market.
Now, with talk that C7 might supplant C3, CMO Today asked Mr. Scanzoni for his thoughts on this year’s upfront.
CMO Today: What struck you about the program lineups presented this year?
I think that clearly one of the things we’re seeing is the advent of a more limited series. That’s kind of an interesting development. Instead of picking up a series and running it as long as it continues to perform, it’s a series that has a beginning or end. It might have 10 episodes and then it’s completed. I think it keeps things fresh, which helps drive ratings a bit. That’s kind of a new trend that seems to be taking hold across most of the networks, where traditionally they develop pilots and produce programs and keep them on their schedule as long as they keep performing.
What does that mean for advertisers?
There is churn in the schedule and there are new programs that come on. I think it reflects the fact that we’re in a very cluttered media environment today with a lot of choices. I think it’s harder and harder for viewers to make long-term commitments to programs. Putting on programs that have a start and a finish over a shorter period of time is an interesting way to draw in viewers and refresh the content over time.
Do you think that C7 will replace C3 this year as the main deal-making metric?
It all comes down to economics. Clients are obviously getting that audience when people play back their programs post-three days, if they’re not fast-forwarding the commercials, that exposure exists. Ultimately I do see the business going onto a C7 metric because as we try to drive the business to a cross-platform metric, you probably need a longer time frame than the C3 window to optimize that. We will eventually be going there. It’s a matter of working out the economics initially to make the transition one that’s acceptable to both sides.
The digital ad space is already steeped in automated technology. Will TV head in the same direction?
In terms of what’s going on in the digital front where there is trading done by machines and algorithms, I think that will evolve to the TV space, but it will only apply probably to secondary inventory like VOD, dynamically inserted ads in VOD post three days, and local cable avails. Places where there is an abundance of inventory and there isn’t a strong demand curve to support that inventory. I think there will be more intent to put that kind of inventory into some sort of an automated marketplace. Now whether that will be real time bidded or not, I doubt it. It would probably be based on some kind of reserve pricing.
For the core business I don’t see that happening any time soon. The television transaction system at least for national television is relatively efficient.
What do you and your clients care about right now?
What’s important to us and our clients and the vendor community is the ability to measure across different devices as people are migrating their viewing to other devices. I think that’s critical for the health of the medium and to maximize value to the advertisers. That is a challenge right now. Television measurement is pretty much restricted to the linear TV stream and DVR playback that isn’t commercially-skipped. Tablets are not being measured, computer viewing is not being measured — it’s being measured as a separate entity. As people are migrating to these different platforms, we need a holistic measurement system that can capture it all. That’s an important objective for us and for the industry.
But Nielsen and comScore are in a heated battle to deliver just that.
We’ll see. We have this highly fragmented TV marketplace and we’re still relying on about 20,000 homes to measure it. As we now get involved in more complex measurement on a lot of these devices, I think that’s more of a challenge. The industry is hopeful but at the same time I think there is concern that the current methodology is somewhat challenged to measure this complex environment.
How healthy will the upfront market look this year?
The upfront market is a very hard one to estimate because it’s basically a futures market. We look at the total market. I think you’re going to see some growth, but it’s going to be relatively moderate, low single digit, and somewhat consistent with GDP growth. I don’t think we’re going to be falling off of a cliff, but we’re probably looking at a relatively moderate growth in television demand.
Anything else interesting?
What’s interesting is that we’re probably at a point where at least the four major networks in primetime are at relatively equal delivery levels, give or take a couple of percent points. In the past there’s been a much wider spread between the strongest delivery network and the weakest one.
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