Marketing

Cross-Platform Deals Change Sales, Upfront

5/04/2007 8:00 PM Eastern

When Planet Earth bowed on Discovery in late March, the BBC/Discovery co-production was more than just one of the channel's largest and most expensive natural history projects. The series, which took over five years to complete, also illustrated the growing importance of cross-platform ad sales.

The series' major sponsors — Bank of America, Cisco Systems, Ford Motor Co. and General Electric — had all signed up for cross-platform ad deals. Bank of America, for example, was Planet Earth's presenting sponsor on the Discovery Channel. The company backed an exclusive online video preview of the show prior to its network debut. It was also involved in an online game tied to the series.

In the game, users plan and figure out how to finance their own expedition to film Planet Earth, stashing cash for the project in a fictitious Bank of America account.

“For high-profile programs, there is enormous interest among advertisers in building stronger cross-platform initiatives,” Discovery Networks vice president of new media ad sales Andrew Synder said. As a result, their cross-platform revenue increased three-fold in 2006.

This is a big change from just a few years ago, when such deals were considered relatively experimental. “They are very important and have become a part of our everyday sales efforts,” said Turner Entertainment Advertising Sales and Marketing executive vice president Linda Yaccarino.

So much so that Lou LaTorre, Fox Cable Networks president of advertising sales, estimated that over one third of the deals his division did across 11 networks during the current fiscal year ending June 30, 2007, will involve at least two platforms.

“That is an enormous change,” LaTorre said. “Two or three years ago they were very difficult to put together.”

But the growing importance of cross-platform deals goes far beyond the volume, which some programmers expect to double in 2007. The deals also highlight changes in consumer behavior and delivery platforms that are transforming sales organizations, changing the way agencies work and altering the upfront's role in the annual sales process.

Comcast Networks president of advertising sales Dave Cassaro said, “Last year, we had a moderate upfront and then a strong scatter specifically so advertisers could participate in the idea market,” industry parlance for cross-platform deals.

Programmers interviewed for this article said this year's upfront will be much stronger, with increases in the 3% to 6% range over 2006. But most add that the growing importance of complex multiplatform deals is changing negotiations and the timing of deals, with money once again being held back from the upfront so that advertisers could fund some larger multiplatform deals later in the season.

“TV remains incredibly powerful,” said Cassaro. “You can't build a brand without television. Having said that, advertising dollars are going to follow eyeballs and consumer usage. [Newer platforms] provide advertisers with a way to foster deeper engagement and multiple touch points” for their brands.

“Increasingly, the marketplace is moving away from a discussion of pricing, CPMs [and more] to an innovation discussion” of how cross-platform deals can be used to “achieve a deeper kind of engagement,” said Hank Close, MTV Networks president of U.S. advertising sales.

Such deals are particularly appealing to agencies and media buying firms that are under pressure to demonstrate the value of linear television in an on-demand world. Last fall, for example, MTVN worked with Sony on a cross-platform promotion of Spiderman 3 that involved six television channels and 12 Web sites to drive audiences to iFilm.com. Users streamed the trailer more than 20 million times, “demonstrating the value of our television brands in delivering an engaged consumer,” Close said.

Cross-platform deals also allow programmers to tap into new revenue streams in a period when TV budgets are growing at a relatively moderate pace.

“We are seeing more funding coming into the marketplace,” as a result of these deals, Close said. “It is not only coming from print and other media [that are losing market share], it is also coming from event budgets and other sources” that would have been difficult for networks to access in the past.

But multiplatform plays pose a number of challenges. “They are very complicated and require a tremendous amount of commitment and collaboration on both sides,” said Ed Erhardt, president of ESPN/ABC Sports customer marketing and sales.

In the past, the inherent complexity of these deals was compounded by the fact that networks typically had separate sales organizations for different media. Programmers pitching multiplatform plays also faced a fragmented media buying process, whereby one agency might handle online and another might handle TV for a client.

Those hurdles are now being overcome, according to Cabletelevision Advertising Bureau president and CEO Sean Cunningham. He said agencies and media buyers have revamped their operations, while programmers have expanded their multimedia assets, adding more content and improving the way they sell multimedia deals.

ESPN reorganized its sales force nearly six years ago to create “a much more efficient process for getting [multiplatform] deals done,” said Erhardt. The sports network is increasingly meeting with the ad agencies so they can better understand a client's needs when developing cross-platform deals, he added.

Given the complexity of these deals, such communication is particularly important. For example, ESPN's deal with automaker GMC for Monday Night Football, includes TV spots, sponsorship of broadband video on ESPN.com, print, radio and a “GMC Keys to Victory” contest on SportsCenter. More than 1.6 million people entered to win 16 trucks, helping GM build up a major database of potential sales leads.

“It takes an enormous amount of work, communication and thought to put together something like that,” Erhardt said.

Other programmers have also revamped their operations. This February, MTVN reorganized its sales operations to better coordinate its various brands and platforms. At the same time, it also retooled its separate affiliate sales and marketing group as the Content Distribution and Marketing group.

Denise Dahldorf, MTVN executive vice president of content distribution and marketing, said the move was made to expand the content available on all platforms and to open up cross-platform advertising opportunities with operators. As part of that effort, they are testing interactive-TV ads with operators.

Major media companies are also working to better coordinate sponsorship opportunities at all of their disparate divisions.

LaTorre and Fox Cable Sports senior vice president of integration and emerging media Adam Holzer said the coordination of ad sales opportunities has been a major initiative at News Corp. for several years and that the effort has produced multiplatform deals with clients such as Petco, Las Vegas Tourism and Verizon.

At Time Warner, Turner's Yaccarino said that the company has signed cross-platform deals with advertisers sponsoring shows such as Seinfeld on TBS and show clips on AOL. Being part of a company like Time Warner “we can bring a lot of assets to the table when we talk to advertisers,” she said. “When we have video discussions, it's not just about TV, but the Internet, print, mobile, etc.”

Meaning the TV upfront is about a lot more than just TV.

March