A Selling Edge

February 12, 2008

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Agenda

State of Television

Changing the Mindset

Where the Opportunity Lies

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Is Television Dying?

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State of Television- English Canada

Source: Fall 2007, Ad 18-49 AMA, Cdn stations

English Canada M-Su 6-11 p.m. Primetime

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Weeks

Ad

ult

s 18

-49

(000

)

Primetime M-Su 6p-11p Total TV 2006 Primetime M-Su 6p-11p Total TV 2007 Primetime M-Su 6p-11p Cdn Conv 2006

Primetime M-Su 6p-11p Cdn Conv 2007 Primetime M-Su 6p-11p Cdn Spec/Dig 2006 Primetime M-Su 6p-11p Cdn Spec/Dig 2007

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Reflecting a Changing Media Landscape

Can we change how we think about the medium, and how advertisers use it?

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Think of What Media Does vs. What it Is

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Think of What Media Does vs. What it Is

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Success Requires a Shift in Focus

Integration across platforms - one voice to the consumer

New and specialized skill sets are required to navigate today’ expanding media universe

Blurring lines between offline and online; winners will organize for a video world

Winning strategies will be grounded in deeper consumer insight and will delve more deeply into creative and content

Content is not limited to TV but available on multiple platforms

Counting heads is no longer an option, measuring effectiveness is critical

Accountability and measurability are at the heart of continuous understanding and learning

Key will be identifying what are new contact points and who are the new partners

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Redefining TV to Video

The “new”

OOH (Dundas Square, 1 Richmond Street)

In-store – i.e. Wal-Mart, Couche-Tard

Video on demand (VOD)

Broadband

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Portable Television/Video Players

Archos 605 Video

Player

Apple 80 GB

iPod Touch

Archos AV700 Mobile Digital Video Recorder

iRiver Clix Media Centre

Apple iPhone

Creative Zen VisionDigital Media Player

Redefining TV to Video

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Changing Competition

Consumers are controlling their media, particularly video to an increasing degree

We need to ensure our clients are where the consumer is?

Your competition is not limited to your fellow broadcasters; in a planners mind:

OOH, Internet, New Media are all competing for traditional TV investment

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Are You Ready?

Canadian Broadcasters have competed in a closed environment with stable growth

Today new technology has introduced more media choice, with opportunity for media owners to create new revenue streams

Vertical integration of content over multiple platforms is where the industry is going but are advertisers ready to embrace them?

Talent cost for advertisers is presently limiting the usage of the broadband and mobile opportunities- not glamorous but an issue which needs solving to grow

When the talent issues are resolved pricing by both content distributors and media owners must reflect the “pioneering” relationship involvement should generate

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Are You Ready?

Broadcasters who have focused solely on the threat of TV as your sole competitors may have underestimated the evolution of other media options

The defacto approach that no other medium delivers the reach of television is short sighted, there is always a caveat- at what cost?

There is no tolerance for inflation in a soft or recessionary marketplace

Conventional television has continued to see inflationary increases which do not reflect the weakened performance of their programmes- Specialty has been forced to offset

New research in Radio and, the prevalence of online usage are all going to challenge the reach of TV if not today, certainly in the near future

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Are You Ready?

What impact will the unbundling of the Specialty Channels have, and will they continue to be a viable mitigating factor balancing the inflation in conventional?

Will the inflation of conventional be minimized due to subscription fees paid by the viewer, or is it merely a method of sustaining generous profit margins……

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Clients are questioning the traditional approaches:

There is so much fragmentation and clutter, should I be first in pod, why can’t you guarantee it?

Is anyone watching commercials with PVRs?

Why can’t I buy commercial minute audiences?

Do I need conventional?

Do I need Top Twenty

Do I need Top Twenty at this cost?

Why is X station on my buy?

I don’t want to be associated with reality programming

Why should I pay the same for repeat programmes?

Is this branded opportunity worth it, will it deliver more than a GRP buy in sales?

Why won’t the broadcaster value my assets?

Clients are asking….?

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What Clients Value in TV Today

A good performance in the SMART Report

Association with properties that create buzz

Added value

Specialty Channels- personal favorites and those that align with brands ie. HGTV and Lowes

Integration, when it goes smoothly

Positive sales results?

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Getting Ahead of the Curve

Broadcasters need to ensure the “value” of television is supported

Innovative products

Supported with ROI research

Recognize the value of engagement, and support it with research

Listen to the viewing consumer

The consumer may be far more tolerant of change and innovation than we suspect- take risks

Timing is everything

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Integration in Content

What is a smooth integration?

A natural alignment between the brand and the programme- the same DNA

All parties are on board with the idea and are flexible- where multi media is involved each constituent must understand the role of their medium

Let the integration evolve, it is unlikely to directly reflect the original pitch

Listen- The various team leads must be able to improvise and work with change -NO is not the first answer the agency/client should hear

No’s should be related back to the agreed upon objective not arbitrary rules

Measure the results against specific media and business objectives and evolve them as you learn

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Integration in Content

What is a smooth integration?

Value- define and rationalize the value of the property at the outset so it is clear to agency and client

Understand we are typically selling a product; show us why the opportunity has value and let us all evaluate the success of the media against this value

Put in place 3rd party research which will evaluate measurable success

Expect full activation from the client and let them know from the outset

Packaging, contesting and in store will aid in the success of the integration- build in the time and resources to develop this out

Seek out a messaging plan from the client/agency with clear communication goals- it will help you understand the clients goals

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Integration in Content

Where has integration failed ?

Cheesy endorsements that make the audience cringe- don’t force fit

Too much scripting

Too many messages

Too many chiefs

Unclear objectives precluding evaluation of success

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A recent success

MTV FRESHMTV FRESH : : The program is designed to engage consumers with relevant content while serving up Value Picks as the content provider.

Each week, MTV creates a 4-minute program featuring the most talked about moments from MTV Live, highlights from original MTV shows, exclusive aftershow moments, new and hot music videos, live music performances, exclusive interviews PLUS: the ‘PICK of the Week’ brought to you by McDonald’s Value Picks Menu

The show is packaged for our viewers who are ‘on-the-go’ and available on a number of new media platforms:1) mtv.ca 2) mobile phones3) podcast download (modified version)

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Have You Got the Right People?

Sales organizations for years have been seeded largely with media agency buyers

Buyers today have different backgrounds in both education and breath of experience vs 10-15 years ago

Integration opportunities need to be managed by those who are strategically sound, an excellent listener and a problem solver- not the priority list for your average sales representative

Consider seeding integration teams with marketers…..A weak idea in a pretty deck is still a weak idea which will not past muster at most agencies and clients

A rep who is focused largely on protecting the media owners interests as opposed to brokering a successful execution will ultimately lose

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The Risk

Status quo approach means the continued vulnerability of traditional TV investment, particularly conventional

Integration in Canada; due to the predominance of U.S. programming, cannot be the only solution to building a stronger video business

Selling to the right people at the right time will be even more important as the business evolves

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Monitoring Consumer Attitudes & BehaviourCanadian Agencies have changed

Successful Media Agencies have stepped up their game

Sophisticated Planning Tools

Media Specialists

Leveraging Global Insights and Research

Traditional TV

Traditional TV is no longer strictly used in a traditional manner

Buy Type GRP BuyStrategic/

Integrated BuyEnvironment

Buy

Timing 3 Buy Seasons Annually

Planning(Feb/July)

Planning(Feb/July)

Decision Maker Majors – Super/Sr. Buyer

Sr. Planner – input from Buy Manager

Sr. Planner – input from Buy Manager

Client Involvement 0 Varies – brief to ultimate approval

Strategic only

Client Exposure Pre-Buy Pitched short list or final reco only

by agency

Approval at planning stage

only

% of investment 0-25% 0-25%

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Relationship Building

With the development of email; sellers have feared the loss of the relationship with the buyer, and rightly so

Today sales representatives spend less and less time in their agencies

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Relationship Building

Frequency of visits is not the most telling statistic when it comes to sales

When reps are with their agencies weekly they are more than likely visiting and not selling

They aren’t selling to everyone, largely the buyers they enjoy/have fun with

The planner is the forgotten decision maker

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Relationship Building

When management was challenged last October to get their people in more often and share the love, only one sales rep made any significant change in their behaviour

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Making the Traditional Buying Decision

What the buyer knows:

Product

Tone/Theme of creative

Target Group- broad and bullseye

Share of ratings allocated to conventional

PMB insights

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Making the Traditional Buying Decision

What the buyer values from a sales rep:

Accuracy- Confirm understanding of the request and deliver what is asked for

Speed- We are looking for responses within 24 hours- don’t be the last in, consistently

Initiative-Did you understand the request and provide more than the basics ie. Suggestion of a type of show, or an OTO opportunity

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Making the Traditional Buying Decision

What the buyer values from a sales rep:

Sell- Have you done more than send an email with the submission? Don’t become email wallpaper

Follow Up- check in with the buyer, do they have what they need? Is there anything new to add?

Consistency- from rep to rep, region to region and from sales rep to sales administration

Give the buyer a Win- We merchandise what we negotiate to our clients; added value or bonus is brought to our clients attention- you can share that halo

The Integration Decision

Understand the agency structure- we are not all alike

Our clients have planning cycles which do not align with broadcast years; get to know them and work around us- the clients will not change for you

At OMD the decision to participate in an integrated opportunity lays with the planners

The smart representatives will build inclusive relationships with both the planning and buying team- let buying facilitate when it is a rep initiative

For generic opportunities present to the agency and ask for representation from both planning and buying

Share opportunities with everyone and give equal opportunity, we may surprise you

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Timing is Everything

Be Patient

It often requires more than one year to “sell-in” an opportunity to a client for a number of reasons:

Timing

Budget

Competition

Resources

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The Challenge- Again!

The truth is the media industry has done shockingly little to help answer client questions and build confidence in the medium

What research has been done is often viewed as proprietary

We will use your research to help sell our clients innovation

The industry needs to allay fears with solid research and case studies- Proprietary you say?

Make a deal with a client that allows YOU to share the results, you will reap the benefit 10 fold by using the research as a basis for future sales

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Follow at Your Peril!

Prepare yourself and your organization for a video world

Understand your competition outside of broadcast and how you can maintain/build share

Answer our questions, build confidence in the medium through research and innovation

The integration will only be as good as the people working on it

Mitigate risk for agencies and clients to be innovative

Understand the evolution of agency structure and needs

Remember selling in a soft market is not only about friends