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London calling: Events like the opening ceremony of the 2012 Olympic Games—watched by an estimated 1 billion people worldwide—have been very lucrative for broadcasters; NBC in the U.S. sold more than $1 billion worth of advertising time for its coverage from London.
Television Distribution and Twentieth Television. “The DVR has become a factor over the past five or six years. We have been monitoring the developments very closely. Our strategy is all about being DVRproof, having a younger audience and ensuring high recall.” Being DVR-proof largely depends on where advertising is positioned. “What differentiates us from network television is that we are viewed live,” Burg says. “Even in homes that have DVRs, 75 percent of our commercials are watched. One reason has to do with the duration and placement of our national advertising pods.” The national pod is separated from the advertising that is sold by the local stations. If a half-hour sitcom contains seven minutes of ads, there will be one national pod of a minute and two others of three minutes sold by the stations. In weekday sitcoms, for example, 86 percent of syndicated advertising is in the first minute.
“Research shows that commercials in the first minute of advertising are watched,” Burg says. “This makes us immune.The second reason for live viewing is the strength of the programming. We have shows that viewers watch more than two times a week on average. The viewers are loyal. We are appointment television.” HIT SEEKERS
In today’s market the value of successful shows to advertisers is greater than ever. “The big hits of today can be bigger than ever because they have global potential,” says Havas Media’s Cabrera. “It used to take a couple of years for a program to work its way around the world. Now it happens quickly. Audiences are still important. The potential upside for big hits is even greater in an age of fragmentation. They are even more valuable because they can deliver big audiences.” 142
But today’s market is also more fickle and faster-moving than ever before. “There has been acceleration in the programming cycle,” Cabrera continues. “If a show isn’t working, it’s dropped.The period of trial and error is much faster. If it doesn’t work in a week or two, it’s gone. But for shows that get it right, it’s winner takes all. Shows can be hits around the world with global audiences and make enormous amounts of money. Of course, there might be only one hit in a hundred shows.The successful companies are the ones that have the money and talent to invest in the trial and error and keep up with the market.” TAKING INVENTORY
One of the strengths that the syndication market tries to build on is the longevity of its shows in offering new types of inventory to advertisers. SNTA’s Burg tells the story of a soft-drink company that wanted to know how to integrate its messages
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within top programs that were already made.The idea was to create something building on the audiences’ familiarity with these shows— the fact that some viewers watch them and know everything that’s going to happen and can even quote the dialogue by heart. “We developed the idea of a vignette, where a brief scene in the show would be pulled out and branded. So, for example, if there’s a scene in a doctor’s office, that could be brought to you by Dr Pepper. It’s about building on the involvement and passion of the viewer.” The innovation is called the exclusive integrated pod (EIP), a recent example of which is a series of spots for Home Depot in programs syndicated by Twentieth Television. The other main method of integration in existing shows is digital product placement, which has become more cost-effective than when the technology first emerged, in the ’90s. One of the characteristics of sitcoms is that they have ensemble casts and there are lots of scenes of people sitting around a table, so it’s easy to put a box or a bottle on the table. “If there’s a pizza there, it’s a natural part of the scene,” SNTA’s Burg says. How I Met Your Mother features both EIPs for Home Depot and product placement for Pizza Hut. GroupM’s Gotlieb is high on product placement—where it genuinely works. In American Idol, the voting mechanism is branded as AT&T texting. “We did that when American Idol premiered, and we believe that that single integration taught people in the United States how to text,” says Gotlieb. “Texting at the time was a non-U.S. phenomenon. Most people knew they had the capability but there was nothing compelling enough to get them to even try it.That single integration changed the face of texting in the U.S.” When Who Wants To Be a Millionaire? was in prime time on ABC, the process of calling a friend was integrated for AT&T also and was integral to the game aspects of the show.