TV industry needs to get its shit together: MCN CEO

Rosie Baker
By Rosie Baker | 22 February 2018

Reducing ad loads, developing a single trading platform, 'obliterating' daily ratings and legacy metrics are just some of the things MCN CEO Anthony Fitzgerald levelled at his peers in the television industry today.

Speaking at the Future of TV Advertising conference in Sydney, Fitzgerald launched an impassioned plea to his colleagues and rivals across the industry to take action where in the past they have dragged heir heels.

Archaic metrics
Fitzgerald slammed irrelevant and archaic measurement processes and trading practices for holding television back. 

He says the industry needs to "obliterate" the reliance on overnight ratings and the allegiance to legacy metrics. 

“We encourage test and learn in Silicon Valley but TV has been held back," he says.

Demographics, such as the focus on the 25-54 core audience, are also losing relevance - not least because he himself is about to turn 54.

"Apparently I've got just one relevant year left but I assure you I've got plenty of good years of spending loads of money left," he quipped.

Peter Horgan, OMG CEO, offered a view from agencies but agreed the model is stuck in the last century and the way TV is bought and measured needs to be 'detonated'.

He says agencies have more staff dedicated to TV trading than any other discipline. But it is where they make least margin saying that "where you have a commercial barrier there will be an impact".

He threw his support behind a single platform from the TV networks.

If the TV networks do so, he says his agencies will find a way to get rid of their legacy systems to plug into a single platform. 

Reducing ad loads
Cutting the ad load was another item on Fitzgerald's list.

He says broadcasters must reduce the number of ad breaks and limit ad loading to create a better experience for viewers if they want "keep people within an ad-funded environment". 

“Attention will become the ultimate currency in our new consumer economy but we must first respect how precious and valuable it is.

“It can no longer be exploited and commoditised to the point of destroying it, through an endless game of volume and price negotiations.

“Ironically, there has not been even a whisper of protest from advertisers or agencies about YouTube or Facebook’s move to institutionalise six-second ads.

“So whilst the industry has wholeheartedly embraced the duopoly’s rationale to improve the user experience with shorter ad lengths and the massive effective rate hike that entails the market reaction to television taking such bold action would today, be outright carnage.”

Speaking on a separate panel at the same event, Seven's chief revenue office Kurt Burnette pointed to the quarterly reporting cycle and the appetite of agencies and clients as sticking points in delivering a reduced ad load.

"If we could half our ad content tomorrow I would do it. We've looked at that. But where in TV is our ability to make those radical changes when the market is looking for the next quarterly share price growth? Netflix can invest and invest without making a profit for years. 

Burnette outlined a recent example where his network did attempt to reduce ad breaks and sell it as a better experience for viewers and advertisers. 

"But when you half the ad loads you have to increase the price," says Burnette. 

"We could not get anyone to buy it. I was really disappointed. Maybe it was a bad sales job from us, but how do we educate [clients] and allow people to come on the risk journey with us?"

Victor Corones, managing director of IPG's investment arm ‎Magna Global, who sits on the side of agency investment decisions, adds: "It's a model that's been discussed. The hardest bit is the price and it hasn't been cracked. There is supporting evidence (from Seven) but we need more independent evidence that a lighter ad load can deliver efficacy. 

"A lot of people in the room will think that fewer ads will offer better cut through, but we're Talking about a lot of money without any surety of what it will deliver. Can we quantify that? It comes back to putting better metrics around it and in the past we haven't had the ability to do it."

Single trading platform
Taking aim at each network building a trading platform, such as Nine's Galaxy, Fitzgerald was at pains to point out that a single trading platform and better collaboration on how the industry plans and buys TV is essential.

“We have to incentivise a single trading system for television, a single ID platform and possibly even a common viewing platform across all broadcasters.

“At the expense of once again sounding like a broken record, for more than a decade we have been calling for the television industry to work together on these frontlines. We haven’t yet, but now it really, really, is time. We need a real sense of urgency.

“Multiple and competing TV trading and audience platforms will fail to deliver the market scale and work flow efficiencies we need for both agencies and broadcasters.

“We need start to develop this solution today and we need buyers and advertisers to back it all of us need to put down the cannons and collaborate.”

In closing, Fitzgerald reminded the room that television must demonstrate that media is a “lever of growth”.

“Have we forgotten the fundamentals of how advertising, brand building and sales funnels work? Have we forgotten how television works?

“Television builds brands, customer consideration and it converts. We need to return to and redefine business value in a media context.”

 

Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop me a line at rosiebaker@yaffa.com.au

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