Fischer vs. Poltrack: Media in the Millennium IV

Originally Published May 2 2005CBS39 David Poltrack and Turner Broadcasting39s Barry Fischer two of the media industry39s most respected and intellectual observers and analysts have for the past month been debating the comparative values and benefits of broadcasting vs cable exposure exclusively in ampltiampgtJack Myers Reportampltiampgt Today Poltrack weighs in with a response to Fischer39s commentary that appeared in Jack Myers Report on April 21 see below quotRely on Facts Not Fictionquot For our readers the full debate beginning with our column about Turner39s Media at the Millennium IV study followsOriginally Published April 5 2005Exclusive Look Inside Turner39s New Media at the Millennium IVTurner Sets Aggressive Agenda to Expand Cable39s Share of Marketers39 TV BudgetsTurner Broadcasting EVP Barry Fischer is intent on convincing marketers and planners that a dramatic shift of broadcast dollars to cable is not only justified but is imperative It should not be simply a contingency option based on pricing he suggests but a necessary decision to improve their network TV advertising effectivenessquotWe39re better than broadcast by far and we have the data to prove itquot Fischer told Jack Myers Report during an exclusive preview presentation of Turner39s ambitious new Media at the Millennium study quotIf clients get the same national TV media plan as last year they are looking at spending more for less and they have a disadvantage vs competitors who are changing their network TV distribution modelquotMedia buyers media planners and marketers acknowledge Turner39s three previous Media at the Millennium initiatives have provided justification and legitimacy for budget shifts to cable Fischer is leading the charge with a new and powerfully convincing fourth iteration arguing previous budget shifts from broadcast to cable have been only a fraction of what the data suggests they should be Marketers and planners he says can now use the new Media at the Millennium IV TMap planning software developed with Nielsen Custom Research to optimize reach and cost efficiency across all dayparts and to compensate for broadcaster39s over delivery in lower income broadcastonly homesIn its Upfront presentation last year Turner made a case for a quotOne TV Worldquot approach to media planning an argument that has been coopted by the Cabletelevision Advertising Bureau in its Upfront presentations this year Turner executives continue to embrace the One TV World philosophy that viewers don39t discriminate between broadcast and cable channels with the new Millennium IV research offering hard statistical evidence that 60 percent or more of a marketer39s national TV budget can be invested in a limited group of cable networks with no meaningful loss of reach and with significant gains in cost efficiencyThe new Millennium IV study addresses previous concerns and criticisms about the study39s exclusive focus on primetime by expanding data to four dayparts offering insights on how the impact of redeploying broadcast to cable in one daypart will affect total day schedule and providing details on how extensively marketers can redeploy budgets from broadcast to cable without negatively impacting on reach or frequency metrics The new study again enables planners to enter their own schedules for full Upfront budgets and brandbybrand schedules to explore the affect of various redeployment optionsWhile Turner believes its detailed presentation which Fischer and his team will make more than 100 times in the next several weeks can have significant impact on planning decisions the real value they say is the ability of planners to enter and manage their own schedules and options While Turner39s presentation advocates large shifts from broadcast network budgets to Turner39s entertainment networks utilizing random scheduling configurations planners can develop scenarios for virtually any combination of networks and dayparts using their own internal planning options and costsThe Millennium IV study utilizes Nielsen respondent level commercial minute demographic and household ratings equalizing broadcast and cable and providing reach and frequency performance based on specific viewers exposed to each individual commercial minute This unique approach enables planners to review scheduling alternatives based on which deliver reach at the lowest and highest costs placing a quotcostperreachpointquot for every schedule and schedule componentquotIn the last four yearsquot says Fischer the middle third of the seven broadcast network programs based on ratings have lost 27 percent of their audiences and the bottom third have lost 125 percent Excluding WB UPN and Pax the bottom third of programs have lost 24 percent of their ratings In Millennium IV quotwe are offering solutions to enable marketers to maintain or increase reach maintain frequency and save money for investments in new media opportunities and featuresquot While Fischer acknowledges there is positive buzz around selected broadcast network programming this year he argues quotthere is no difference between last year and this year that would make me think anything is different Net broadcast network gross rating points are downquotTurner Entertainment EVP Linda Yaccarino points out quotsome of the negative comments about audience erosion from leading cable networks are also misleading since one large network TLC has had abnormal ratings fluctuations that impact the overall picture Ratings for cable are upquot she adds quotand this is the third consecutive year Turner39s ratings are up Cable and Turner have never been in such a strong positionquotThe primary difference in this year39s Turner presentation in addition to multiple daypart data is an aggressive attack on the disproportionate influence of broadcastonly homes in most advertisers39 media plans These households which still have access to only a handful of network and independent broadcast stations should be identified and recognized in media plans because they deliver significantly reduced value to most marketers quotBy overdelivering against broadcastonly homesquot says the Turner analysis quota client with too much broadcast in their schedule underperforms against the 39advantaged39 85 cable universequot Fischer adds quoteven at parity costs with broadcast Turner39s audiences are advantagedquotOriginally Published April 13 2005Broadcast Empire Strikes BackEXCLUSIVE New IAG Data Compares BroadcastCable ValuequotToday most advertisers invest about 30 to 35 percent of their national TV schedule in cablequot points out David Poltrack EVP of Research ampamp Planning for CBS Television quotIn the last industry study that measured actual returnoninvestment from cable and broadcast networks for the major brands if they invested 50 percent plus in cable it was a disaster The most successful campaigns at that time were using about 20 percent cablequotAcknowledging the optimum broadcastcable mix has probably changed Poltrack would welcome an updated version of the 199697 quotHow Advertising Works IIquot conducted by Media Marketing Assessment and funded by CBS with several marketers quotThe study identified the ideal distribution among network prime network day and cable and it would be relevant to run every schedule again today in terms of returnoninvestment and not just reach We39d welcome updated insights on how actual dollars invested in broadcast and cable correlate to campaign effectiveness based on salesquotWhile no industrywide research has been developed since the 1997 MMA study Poltrack points out several marketers currently do extensive ROI based analyses and integrate custom data into agency optimizers and media plans quotI can39t imagine large media operations and marketers will continue to get learning out of Turner39s Media at the Millennium presentations beyond what they are able to learn from their own research and optimizersquot he comments responding to Turner39s fourth in a series of 39Millennium39 presentations promoting the economic value of cable over broadcastPoltrack applauds Turner for quota very effective presentationquot but suggests quotwhen optimizers began to be the vogue in the 1990s they generated the basic technique of building schedules based on a conversion of more to less expensive commercial inventory These optimizers have been adopted by most agencies and have led planners to make a gradual shift to schedules that have an increasing percent of cable The vast majority of advertisers have made that transitionquotPoltrack suggests most major advertisers and agencies have progressed beyond reach models are now integrating insights on sales effectiveness and environment into optimizers and have gone beyond the reach and efficiency allocation models reflected in the Turner presentation quotYou can39t use these models without looking at qualitative and returnoninvestment dimensionsquot argues Poltrack quotand these all point to the importance of maintaining strong broadcast network exposurequotIn typical Poltrack fashion he unfolded an array of thirdparty evidence in an exclusive interview with Jack Myers Report to support his point that Turner39s Millennium presentation is effective but increasingly irrelevant quotOptimizers are used in planning stages because hypothetical schedules are not purchasable Programs are bought in packages The computer may say to get rid of a spot in quot48 Hoursquot but keep a spot in quotCSIquot That39s not the way the business works Actual packaging has an impact on pricing and you can39t cherry pick schedules the way they suggest or everyone would buy the same 20 showsquot Mark Lazarus president of Turner Entertainment responds that media value improves when buyers pay premiums for high demand hit shows and avoid packaging them with lower value spots that deliver inefficient reach quotIt39s about finding the right value propositionquot he says arguing against traditional forced packaging of hit shows with quotinefficientquot lowerrated shows in the bottom third of networks39 schedulesResponding also to Sir Martin Sorrell39s comments regarding broadcast network prices in Monday39s Jack Myers Report CBS39 Poltrack comments quotSir Martin complains about the high price of television time However he then goes on to say 39If you position products and services based on innovation and differentiated branding you earn the right to demand a premium If you brand based on price you create a commodity39 Premium39 television programs are differentiated and innovativequot says Poltrack quotThat39s why they attract such high audiences and resonate with those audiences The approach we are using at CBS is to build popular television programs into program franchises These programs offer the emotional connection that Sir Martin is seeking for the products and services he advertisesquotSeveral research studies Poltrack says reinforce the premium prices broadcast television deserves for differentiated and environmental advantages Marketers and agencies Poltrack suggests have already factored reach considerations into their media plans and are now advancing to metrics focused on qualitative custom and syndicated research and sales dataquotThese qualitative dimensions need to be taken into accountquot he says pointing to IAG data accumulated between January 1 and February 28 for six broadcast networks and nine major cable networks excluding live sports programming on attentiveness brand recall message recall and message likeability among 18 to 49 year old audiences Household and 25 to 54 data is also available Measured cable networks include Discovery ESPN Lifetime MTV TBS TNT TLC USA and BravoIAG ResearchProvided by CBS TVamp160for January 1 to February 28 2005Adults 18 to 49amp160Average Viewer AttentivenessSix Broadcast Networks72Nine Cable Networks57Brand Recallamp160Six Broadcast Networks40Nine Cable Networks32Message Recallamp160Six Broadcast Networks32Nine Cable Networks24Message Likeabilityamp160Six Broadcast Networks21Nine Cable Networks18amp160Originally Published April 21 2005Turner39s Barry Fischer Tackles CBS39 CriticismBroadcast Network Response is Skewedquot says FischerquotTurner has never said 39don39t buy broadcast39 However we are asking our agencies and clients to explore the upside of buying only what is necessaryquot writes Turner EVP Barry Fischer in a response to Jack Myers Report39s recent interview with CBS39 David Poltrack quotThe broadcast network response to our Media at the Millennium IV study as articulated by CBS39 David Poltrack is as skewed as the broadcasters39 current pricevalue relationshipquot comments FischerHere is Turner39s full response to Poltrack39s comments prepared by Turner EVP Barry Fischer exclusively for Jack Myers ReportCBS cites a nineyearold MMA studyCBS references the optimization trend that began in the 9039sBut at no point does CBS refute our basic assertions Assertions that are continually reinforced during our presentations with clients and agencies and that are in the world of real television schedules not models not academic studies not broad optimizations and certainly not 1990 thinking1 A reach point in broadcast is currently 34 times more expensive than a reach point on TBS or TNT2 Commercial minute respondent level data the basis for Media at the Millennium IVas well as many agency and client media decisions tells us exactly who sees which commercials and how real schedules build reach and frequency in the real world By adding realistic cost data we can see exactly what we get for what we pay3 The broadcastonlyhome accounts for a disproportionate amount of the broadcast audience delivery It39s the quotsteroidquot propping up broadcast ratings This audience can39t afford to buy most clients products and that overdelivering against the broadcastonly home means one must underdeliver against the cableplus 85 of the country a group that has considerably more purchasing powerBy substituting large amounts of broadcast from all dayparts daytime late night early morning primetime and fringe with TBS or TNT Adult Swim or Cartoon we can now prove that clients will not lose reach and not build expensive frequency in their plan against an audience that they probably would never want to target and certainly not want to overdeliver Further in doing so significant funds will be freed up to sponsor or develop targeted promotions or add weeks to a media plan or improve on air weight levelsIn much of the CBS response Mr Poltrack describes quotsoftquot values derived from a current IAG study message recall attentiveness likeability and brand recall these are all important And clearly based upon the data cited by CBS there is very little difference between broadcast and cable certainly not justifying a 300 cost per reach point premium of broadcast over cable But because of broadcast39s high costs a client will not be able to afford to stay on the air very long Being off the air with no advertising is not a quotsoft valuequot it39s a competitive disadvantage Of course with any mention of broadcast39s quotmessage recallquot one must consider the excessive frequency delivered to the broadcast only home and the resulting underdelivery of message to the 85 of consumers that can afford the buy top brandsAlternatives exist today TBS and TNT39s pricing relative to broadcast is highly advantageous Our reach substitutability is proven Our programs are among the best television has to offer Our promotions and client service are regarded as tops in our field And the respondent level data along with today39s agency and client tools to manage the data offer clear and unambiguous ways to find the best balance between reach frequency weeksonair and efficiencies All of this allows our most creative thinkers the financial flexibility they must have to build new and innovative ways to use the powerful television mediumThe continued movement of national monies away from broadcast to fully distributed cable continues to be the best way to add weeks weight promotions and sponsorships to a mediamarketing plan In doing so a client reduces pressure against an audience that can39t afford their products while adding weight against an audience that has the needs and resources to purchase all manner of goods and servicesRobert Louis Stevenson said quotIt is the mark of a good action that it appears inevitable in retrospectquot Last year 600 million was reported to have moved to national cable At least the same should happen this yearOriginally Published May 2 2005quotRely on Facts Not Fictionquot argues PoltrackCBS Responds Again to Turner AssertionsTurner39s assertions involving the performance of the broadcast networks in BroadcastOnly Homes as is their tradition attempts to refute by inference what has already been established in factThey would have you believe that because the Broadcast networks have a greater share in BroadcastOnly homes and BroadcastOnly homes have a lowersocioeconomic profile the Broadcast network audience also must have a lower socioeconomic profile That is the Turner inference The fact is that all four broadcast networks have higher primetime ratings among adults in upper income homes while TNT and TBS as well as most of the other major cable networks have lowerthanaverage ratings for adults in these affluent homesChart two goes hereChart three goes hereBasic cable hasn39t had an upper economic skew since it passed the 60 penetration levelThe folks at Turner seem to be bewildered by why the top broadcast programs command a premium Perhaps an example will helpA movie studio is releasing a new film It opens on Friday February 18th The goal is to drive the weekend movie goers to the studio39s film Thursday night the night before the weekend begins is the critical night They can run two ads on that night one in CSI and one in SURVIVOR and reach 17 million different Adults 1849 Or they could run one spot on each of the 61 measured basic cable networks and reach just 15 million different Adults 1849Before studios can get moviegoers to watch the movie they have to get theaters to carry the movie Which schedule do you think will better sell the movie to the theater owner a spot in both SURVIVOR and CSI on Thursday night or a schedule consisting of spots spread over a hodgepodge of cable channels on that night The SURVIVORCSI combo delivers two million more young adults And to get the 15 million for the cable schedule the spots on all the cable channels would have to run simultaneouslyThe broadcast networks not only deliver reach they deliver it when that advertiser wants it The hit programs on the broadcast networks also provide an element of merchandising that enables the advertiser39s sales and marketing team to more effectively sell the product or service through to the key distributors This is why hit programs command a premiumBut Turner executives should understand the power of these top programs After all LAW ampamp ORDER SVU repeats represented 41 of TNT39s Primetime Adult 2554 circulation in the First Quarter of 2005 EVERYBODY LOVES RAYMOND FRIENDS and SEINFELD reruns represented 28 of TBS39s Adult 1849 audience during that quarterLet me use an automobile market analogy Buyers are willing to pay a premium for the superior quality of a Mercedes Benz They are also willing to pay a greater premium for a new Mercedes than they are willing to pay for a used MercedesThe television advertising market is driven by the demand for the hit programs The broadcast networks have always controlled those programs That is why they can demand a premium price This is especially true this season a season in which the broadcast networks introduced an extraordinary number of successful new programs and the cable networks had little success with their new productIf advertisers are searching for the hot programs with the most buzz this season that will bring them to the broadcast networks If an advertiser wants to be where the action is this year that advertiser will be moving money into broadcast television and out of cable television

CLICK TO DOWNLOAD THE MYERS REPORT RESEARCH & WHITEPAPERS

Fischer vs. Poltrack: Media in the Millennium IV

Author

Publish date

Channel

Maryann Teller

"About That with Carl Mayer:" Alaina Donnellon (Episode 10: Political Spending) - By Carl Mayer

More Videos:

CLICK TO DOWNLOAD THE MYERS REPORT RESEARCH & WHITEPAPERS

Fischer vs. Poltrack: Media in the Millennium IV

Enjoying This Commentary? There's More to Love

Maryann Teller

"About That with Carl Mayer:" Alaina Donnellon (Episode 10: Political Spending) - By Carl Mayer

The payment was successful

Cookies