Figures in millions of dollars
Underwriting for national shows
Can PBS compete for media buyers’ love?
Now more than ever, with the economy trembling, public TV’s underwriting salespeople believe they must play like the other sellers in the media marketplace. “We can’t live in an ivory tower,” says Suzanne Zellner, v.p. for corporate development at WGBH. “We know what we need to do to be aggressive and competitive.”
PBS and a group of its national producers are exploring new sponsorship models to help them reverse a downward trend in national underwriting. They’re considering changes in broadcast and web guidelines as well as buyer-friendly reforms of their selling habits.
It’s an effort to realign underwriting practices with what corporations want and expect from media, says Andy Russell, senior v.p. of PBS ventures.
Corporate underwriting provides only about 15 percent of public TV’s total revenue, both national and local (CPB’s most recent count, fiscal 2006), and 20 percent of the funding for its PBS national programming.
Stations’ local underwriting sales seems to have been healthier, as heard anecdotally and indicated in the most recent CPB data. Some local stations are less restrictive toward advertisement-like underwriting credits and have a head start in flexible sales practices.
But in sales of national underwriting for the best-known PBS “icon” series, sales were off more than 40 percent between 2003 and 2007. Sales figures were flat in 2006 and 2007, and 2008 is looking about the same, according to PBS.
In a slightly wider view of PBS program funding for its National Program Service, pledge shows and other major PBS services, over the longer period of fiscal 2000 to 2007, corporate underwriting was the only major funding source that declined —10 percent over seven years (chart above).
Adjusting for inflation, however, the buying power in 2000 dollars declined 25 percent in seven years.
Little known, less understood
Corporate underwriters will demand to see returns on their sponsorship investment all the more in the down economy, predicted underwriting execs and agency reps at the PBS Development Conference in San Antonio earlier this month. National and local sales teams likely will have to work even harder to satisfy companies and make their dollars go further.
A McKinsey & Co. study for PBS polled companies, ad agencies and media buyers last fall and confirmed what many pubTV leaders and marketers knew or suspected: Funders are attracted to PBS’s brand and its reach, but they aren’t always aware of sponsorship opportunities. Some also said pubTV had been difficult to work with in the past because it couldn’t match their needs for shorter flights of on-air blurbs, multiplatform deals and data proving that underwriting helps meet their business goals.
Systemwide changes are long overdue, says Zellner, who is a member of the working group. Public television needs to act like all other TV selling organizations, she says, which means increasing pubTVs visibility to advertisers and offering them what they’re getting elsewhere — a flexible media partner that can respond quickly to their needs.
The days of corporate philanthropic support for public TV are basically gone, she adds, but it’s been hard for some pubcasters to accept that the marketplace has changed.
To catch up with the marketplace, PBS and national producers are working on changes to underwriting in the following areas:
More multiplatform opportunities: The network and producers are discussing new ways to give companies more multiplatform visibility, says Russell, particularly through the new PBS online video distribution system that rolls out this fall (separate story).
Early this summer, with approval of the PBS Board (and after much nudging from WGBH), PBS drafted new online sponsorship guidelines to allow sponsorship ads instead of just modest logos on national program websites. So far, Nova is the only site featuring these new “skyscraper” ads on the right side of pages, but other national programs are redesigning their websites to implement the change. As viewing shifts to online, Zellner says, it’s critical that funders don’t lose the audience. “Everywhere the program goes,” she says, “the funder should go.” WGBH is also working to create online-only sponsorship deals for sites of programs no longer on the air.
Containerization: Between now and spring, PBS will begin uplinking programs to stations with sponsorship messages in a separate “module” that can be switched out readily. Until then, producers who need to revise underwriting spots packaged with a program must still recreate and retransmit the entire program file. And those changes often are needed when a sponsor wants to change its spot or has a less than full season contract.
PBS’s media operating center, which packages online, SD, HD and DVD versions of programs, will have to modify some of its packaging technology. As part of the Next Generation Interconnection System, PBS will also create a database that allows stations to check whether they’re running a program’s latest version. For example, the network could send out several updated versions of a Nova episode within a year. In the past, says Zellner, stations occasionally have aired programs with outdated sponsorship messages.
These days, she points out, Merrill Lynch may no longer be called Merrill Lynch come tomorrow. “Overall we could be more successful if we could get the spots on or off the air when the sponsor wants,” she says. “I’m thrilled that after five years of fighting for this PBS is doing something.”
New on-air approaches and practices: Producers are currently piloting shorter-term sponsorship deals and more flexible pricing. In 2003, PBS began allowing 30-second underwriting spots for big spenders (15 seconds had been the norm). PBS’s recent policy had been to give the longer, premium spots to sponsors spending more than $1.5 million a year, says Zellner, but the network is now giving them to companies that spend at equivalent levels, prorated over shorter periods or that provide the majority of funding for a program.
Zellner wants to do away with the spending threshold entirely and price according to the rest of the marketplace. Most clients ask for 30-second spots because they’ve already made spots for commercial TV, she says.
Many of these commercials will pass PBS underwriting guidelines — such as a Liberty Mutual spot for American Experience in which a boy walks through a maze of historical images. The ExxonMobil spots now aired with Nova are identical to the company’s ads on commercial nets, says Marcia Hertz, managing director of marketing and client services at WGBH’s national sponsorship group. WGBH is currently courting ExxonMobil for a year-long Nova sponsorship, she says.
In this economy, Zellner says, companies won’t want to spend hundreds of thousands to produce completely different spots for pubTV. Advertisers are tightening their purse strings, cutting media budgets and recycling spots, says Rebecca Berzewski, marketing director at the San Antonio ad production company Laszlo Rain. They prefer quarterly buys so they can monitor the market—and the program—before committing more. Many national pubTV producers (and local stations) have felt this pressure and now accept 13-week deals.
Giving sponsors more data on their investment: The McKinsey study showed that media buyers are under growing pressure from higher-ups to show returns on their marketing investments. Clients need more data and ratings to justify spending, they said. PBS is negotiating with Nielsen Media Research to buy more frequent audience data to show to sponsors. PBS would like to be included with other broadcasters in the daily or weekly data Nielsen posts online which media buyers consult. Instead, PBS gets 12 weeks of data each year, reported on paper three months later. Other clients get continuous measurement, available within 15 days. It will take months to negotiate terms PBS can afford, Russell says; he aims to get Nielsen data more frequently by next fall.
Making PBS more visible in the marketplace: Underwriting sales reps and the McKinsey study say sponsors often don’t think about pubTV as a first option because they aren’t aware of it. Some buyers don’t have a PBS media kit on file with all their other marketing options. And when media buyers do see PBS materials, they are often confused by its unusual pricing and contract lengths. “You’ve got to speak our language,” Vince Thompson of the Atlanta ad agency Creative Presence Partners told DevCon attendees. PubTV could get more money than competitors, he says, because it offers multiple touch points such as outreach events.
Most pubTV fundraisers agree the system has to present a more unified, comprehensible offer to commercial marketers. PBS and producers are exploring ways to pull together sales teams and develop some sort of continuous presence during the springtime upfront sales events when broadcasters preview their shows for advertisers.
PBS and major producing stations have made forays into the upfront season in the past, and even shared a joint underwriting sales unit for a while in the ’90s. Zellner says she’d like to see PBS to take more of a leadership role.
Advertisers are accustomed to placing spots when they choose on a network schedule instead of program by program, says Russell. But creating a true network-style advertising effort for pubTV would be difficult, because different sales teams sell different programs from different places.
The working group is talking about a common marketing campaign that would put PBS on advertisers’ radar, Russell says. The group is also considering a centralized sales force for national programs, though Zellner is skeptical that it would work. The kind of “360 degrees” of visibility public TV offers—through various media platforms, educational outreach and events—differentiates it from other media, she says, but it requires programs producers to work closely with sponsors.
Selling in the local market
Stations’ local underwriting sales don’t necessarily mirror the flat-to-downward slope of national underwriting trends. Local underwriting amounts to about two-thirds of public TV’s total corporate revenue, which rose 26.5 percent in fiscal year 2006, according to CPB’s latest system figures.
Stations have the independence to tailor underwriting deals, and many have long experimented with the shorter contracts, longer spots and flexible pricing that national sponsorship sellers want to offer. Stations also can promo sponsors in their print guides and tap local organizations and businesses for events, product tie-ins or educational partnerships.
KLRN is targeting the people who control the San Antonio advertising market—the ad agencies, says Ellen Evans, v.p. of marketing.
The station accepts run-of-schedule contracts and 30-second spots. About two years ago it started selling shorter contracts. “We were missing out on buys because we weren’t flexible with underwriting lengths or day-part variety” she says. KLRN’s most popular contract types right now are quarterly and run-of-schedule. “Agencies are comfortable with these buys — that’s how they do business,” says Evans. “Plus this opens up opportunities for us to promote community activities and events that have a shorter promotional calendar.”
Additionally, KLRN and 12 other Texas PBS stations are working through the Texas Public Broadcasters Association to start a statewide/regional underwriting initiative, modeled on Florida stations’ efforts. The group just landed their first statewide buy from the state agency that aids injured workers.
For most stations and national producers, the effect of the economy won’t be clear for a few months. At Iowa Public Television, underwriting has increased over the last three years, says Jay Boeding, corporate relations and marketing rep, but he’s concerned about fall renewals. Iowa has stricter underwriting rules than some local stations — it airs only 15-second spots and rarely does events with sponsors. But with tougher times ahead, he says, the state net is considering sweeteners such as special events and other add-ons for underwriters. In times like these, says Boeding, you have to evaluate what you can offer that you haven’t in the past.
Nationally, Zellner says, WGBH will be targeting companies that haven’t been hit as hard by the economy. Luckily, the station’s national programs don’t rely heavily on support from the automotive or financial services industries.
KLRN’s Evans says underwriters are renewing their fall contracts, but in this economy she isn’t taking them for granted. Her team is communicating often with sponsors to anticipate any changes, and they’re also pitching the fourth quarter of 2009 to get a jump start on the next fiscal year.
“In today’s economic environment,” she says, “my sales team feels like we’re in a race against time to get out and tell our story.”
Web page posted Oct. 22, 2008
Copyright 2008 by Current LLC
