Cross-Media Deals Have Pros and Cons12/09/2001 7:00 PM Eastern
Numerous high-profile cross-platform advertising deals have been finalized since last spring, but — as two major media buyers made clear during a Western Show panel here two weeks ago — the negotiations leading up to such announcements are "arduous," time-consuming and sometimes futile.
Last spring, Procter & Gamble Co. reported a $300 million buy with Viacom Inc.'s Viacom Plus unit, and Tricon Global Restaurants inked a $100 million deal with News Corp. One.
More such buys were completed earlier this fall. Kellogg USA, Kraft Foods and Toyota Motor Sales bought across AOL Time Warner Inc. properties, and Wendy's International purchased time on various ESPN and ABC properties.
The cross-platform concept is not one that makes sense universally, according to Initiative Media North America CEO Lou Schultz. "Probably a handful of people can really, really utilize the cross-platform/cross-media deals," he said during a panel session.
Schultz, who oversaw media buying for General Motors Corp. in 1991, recalled making a then-rare $100 million cross-media deal with Time Warner Inc. But in two years, the GM deal fizzled as executives within Time Warner fought turf battles to get more dollars for their individual units, he said.
But Schultz also conceded that agencies can experience frustrations with their clients.
"There's so much politics and financial control [involved]," and it's difficult to get someone to approve deals that are "on a grand scale," he said.
MediaCom Worldwide senior vice president and director of media Darlene Hayman said her shop has done nine cross-media deals this year for such accounts as Slim Fast and Subway Restaurants, but pointed out that "dozens of other packages" have failed to come to fruition.
To streamline the often "arduous" cross-platform negotiation process, she offered a few suggestions to the sellers. For starters, she said, "Be a partner, not a supplier… Do your homework [on the client]… Appoint a single spokesperson and speak with one voice." She acknowledged that "there should be one point person" on the agency side as well.
"If the package isn't greater than the sum of its parts," she continued, "don't even waste your time."
She also cautioned: "Don't let infighting undermine the deal. Learn from rejection. If the deal doesn't work, find out why… [And] deliver what you promise [in the package]."
On the selling side, Time Warner Cable president of ad sales Robert Sherman agreed that such deals take "a long period of time. It's a very hard and arduous process [that] certainly doesn't provide any economies."
Noting that he's now overseeing a localized version of the national cross-platform sales strategy, Sherman said he can offer clients avails not only on the MSO's cable systems and the America Online Internet services, but also the metro editions of Time Inc. magazines, 13 other publications repped by Media Networks Inc. and tie-ins to Warner Bros. movies or music properties, when applicable.
Sherman he said he can also pursue non-owned media assets to round out the package deal, if that's what the client requires.
Cox Communications Inc. vice president of ad sales Billy Farina said his MSO has conducted local cross-media deals that encompass local cable avails, local Internet sites, direct mail, print and event marketing. That concept is likely to become more common, he said, but "there's definitely more questions than answers."
Expressing some concerns, he wryly noted, "It's an exciting new way to devalue your product." He also cited the potential for infighting within media companies "as you try to determine whose product is worth what."
That raises the issue of discounts.
"The equation is, 'It's bigger, therefore it's better, therefore it's cheaper,' " he said. "We really don't want to play in that sandbox. There's got to be some premium in there."
Sherman concurred: "We have very little interest in bundling our media so as to be able to sell at a discount — even, by the way, if it increases share."