The year media came into its own

As the industry closes shop on 2003, Strategy MEDIA's Patti Summerfield looks back at the issues, news and people that defined the year

The year 2003 will probably go down in history as the year the media business became everyone’s business. New technology, new TV stations, new radio formats, new measurement techniques and a new realization that media agencies may hold the key to solving the accountability problem propelled media issues from the back room to the front page. We saw the debut of PVRs and PPMs, the birth of JACK and Toronto 1, the death of Izzy Asper and the withdrawal of Moses Znaimer.

Media management agencies finally came into their own as leaders in the marketing communications process. They stepped up to the plate and invested in the proprietary research and systems needed for ROI accountability. And now, for the first time, agencies and advertisers are pushing broadcasters to do their part in providing proof that TV is an effective medium for selling brands and products.

The ever-mounting avalanche of research may finally be consolidated through the Unity Project. And in an effort to break through the clutter and reach targets in a more relevant way – not a new issue, but one that continues to burden advertisers, consumers, and media sellers alike – media agencies are focusing on getting up close and personal with the consumer.

As 2003 drew to a close, there was already chatter about some of the new issues the industry will have to deal with in 2004. Evidence of simultaneous media use is an emerging challenge for advertisers – and an activity that is not limited only to tweens and teens. Advertisers are already wondering whether this phenomenon is a problem for them, or just a new opportunity for reaching their targets with cross-platform campaigns.

Everyone knows that media fragmentation and the new set-top devices are threatening the 30-second spot, but the most effective ways of using branded, embedded, or tailored content have yet to be fully refined.

Key to the story of 2003 is that with every emerging and ongoing industry challenge, lies new and exciting opportunities for advertisers, media professionals, and researchers across the board.

The big news of 2003

Accountability was the buzzword of 2003 and continues to impact all aspects of clients’ businesses and, in turn, the agencies. Clients and agencies are making big investments in the research tools needed to measure the effectiveness of advertising campaigns. However, they don’t believe all media sellers, particularly conventional television where the bulk of ad spending goes, are making the same effort.

Media sellers who don’t take their role in accountability seriously, are driving advertisers to the media that are, says Bob Reaume, VP policy and research for the Association of Canadian Advertisers.

‘Commercial audience measurement, return on investment, even good solid audience measurement and readership tools would help that accountability side of the media spend,’ he adds.

Mike Welling, VP of brand development for Unilever Canada, in particular, blasted the conventional broadcasters on the importance of accountability in the early part of the year. He noted that Unilever is prepared to move its ad dollars around – and has done so – based on understanding effectiveness and the research that vendors have invested in to show how their vehicles work better.

Advertiser migration: Specialty TV closes the gap

Dissatisfied with rising rates, declining audience, and the conventional broadcasters’ blasé attitude towards ROI accountability, agencies and their clients began to vote with their feet in 2003 and put their money where the viewers are – specialty TV.

It would be foolish for advertisers to totally abandon the conventional ship, but major spenders are becoming much more willing to shift budget to other media, and specialty is benefiting big time.

Buyers were more than a little ticked off about the inflated rates and what some felt was an artificial shortage of inventory that marked the 2003 fall buying season. This was further compounded by audience under-delivery by even the top-rated shows, and the reluctance of the conventional broadcasters to provide research beyond syndicated studies to support their medium.

Unilever’s Welling says: ‘Over time you’re seeing a drift toward specialty, which is why many major broadcasters are trying to expand their portfolios of (specialty) properties. On one hand, they’re (showing their medium works) through their specialty networks, but not their main broadcasting vehicles.’

Year-round programming

The summer of 2003 saw the beginning of year-round programming in Canada. CBC eschewed summer reruns to introduce special events and original movies and presented Steven Spielberg’s alien saga Taken over a 10-week period.

This was a successful tactic and the premiere boasted a national average-minute audience (AMA) of 581,000, adults 18 to 34, accounting for a 13% share.

CTV’s summer featured reality shows such as Love or Money, Cupid, and Canadian Idol, a runaway success that drew 1,234,000 AMA for a whopping 35% share for adults 18 to 34.

U.S. networks for the past couple of years have filled the summer with new reality shows and used it to start building audience for new fall shows like Fox’s The O.C., this year’s biggest breakout drama across the board.

Year-round programming could help stem the flow of viewers to specialty and also garner some fresh ad dollars during a season that has not typically been a big one for advertisers.

Summer introductions of new shows are also very helpful to buyers, says Helena Shelton, VP of broadcast operations for MBS/The Media Company. ‘If you can see how a show is performing early on, it gives you an idea of how it’s going to do when the rubber hits the road during fall and pre-Christmas buying.’

The Unity Project

The Canadian Media Directors’ Council’s Unity Project was set in motion by Hugh Dow, president of M2 Universal in early 2001. The CMDC began the initiative in an effort to eliminate the duplication of product/media usage data that was inherent in all audience measurement studies.

The plan called for fusion of local product/media usage data with PMB’s national product/media data to form a central databank to be used by the entire industry in conjunction with individual media audience measurement.

Two different fusion techniques were chosen to test and the results of both were ready for analysis by the end of October. Both were designed to consolidate product and lifestyle research from different audience measurement surveys to emulate a single-source database, one that collects both product and media usage data from the same respondents.

The project moved ahead fairly quickly, but the road to Unity has been a bumpy one. Media suppliers and some buyers are not happy about losing single-source research studies and possibly having to subscribe to studies they haven’t subscribed to in the past. For research purists, combining research collected through different methodologies goes against their principles.

As Anne Ruta, executive director of NADbank, pointed out: ‘PMB is a magazine study and their research and methodology is suited to collecting magazine readership data. It’s not the way to collect newspaper, radio or television data.’

She said the problems with different methodogies won’t go away just because there is a set of common demographics, but what it may do is illustrate clearly that asking 20-year-old males the same question will result in a different answer in every different survey.

A decision on which fusion methodology will be used is expected early this year.

Portable People Meters

BBM Canada established its PPM panel of 530 households in the francophone Quebec market in early September. More than 108 television stations (Canadian and U.S.) spilling into the market have had their signals encoded so they can be recognized and recorded by the portable, pager-sized device developed by New York-based Arbitron.

This technology is so far the only one that will enable the measurement of out-of-home viewing. It also has the potential to measure radio through continuous electronic data collection, as opposed to the traditional paper diary approach

There are, however, questions about whether, with some of the problems seen in U.S. tests, the PPM is really ready for prime time. The ACA’s Reaume says in the U.S. the general consensus was that the technology isn’t ready for market. ‘In our opinion, all of these issues can and should be tested in a Canadian environment before we give it the go-ahead.’

Controversy aside, the eyes of the world are watching the performance of the PPM in Quebec, the first market to move beyond testing the gadgets and use them for real.

Mergers and acquisitions

In the wake of the consolidation fever pervasive over the last few years, 2003 was the year the industry paused to take a breath.

But, just when you thought international mega shops couldn’t get any bigger – they did. Optimedia Canada officially became ZenithOptimedia in August after its Paris-based parent company, Publicis Groupe, bought the balance of Zenith’s shares from WPP’s Cordiant.

Canadian-owned Genesis Media was active in the area of partnerships and mergers in 2003. Early in the year it developed a partnership with Deloitte Consulting and then in September with The Hive Strategic Marketing in Toronto.

Genesis Shepansky Media was formed in November when the agency teamed up with Shepansky Media of Vancouver to better serve Western Canada. The Vancouver office and Genesis’ Calgary office are run by Roxanne Shepansky. The joint operation reports close to $75 million in billings and a roster of clients that includes A&W Restaurants from Shepansky and Safeway Canada from Genesis.

Media owners also got into the act. Early in the year, newspaper publisher Osprey Media acquired four daily newspapers, as well as 32 weeklies and other Southern Ontario publications from CanWest Global Communications.

In September, Astral Media sold seven AM radio stations in the province of Quebec, as well as CFOM-FM in Quebec City to a business venture formed by Gaetan Morin, president of Groupe Morin holding company, and Sylvain Chamberland, president of CKAC-AM and the Radiomedia network. The CRTC had vetoed Astral’s first deal with TVA Group-Radio Nord a few months earlier.

Sun Media Corporation purchased the southern Ontario newspaper operations of Annex Publishing & Printing in November, including two dailies, one semi-weekly, six weeklies and two shoppers.

Torstar Corporation was busy building its empire throughout the year starting with the acquisition of Sympatico’s 50% interest in Toronto.com, giving it complete ownership of the online city guide.

Torstar also added more newspapers and magazines to its stable. In June it bought the Brabant and Fairway weekly newspaper groups consisting of nine weekly papers in the Hamilton and Kitchener, Ont. areas from Osprey Media Group. Torstar sold Osprey’s five Ontario weeklies and three papers in southwestern Ontario.

People – passages, moves, and news

The death of CanWest Global Communications founder Izzy (Israel) Asper was a profound loss for his family, his company and the industry he was prominent in for decades. Asper died Oct. 7 at the age of 71.

In 1974, Asper shifted his focus from his column on taxes in the Globe and Mail, to television, buying a 45% stake in the troubled Global TV station in Ontario. Around the same time, he purchased the assets of a North Dakota TV station, and moved it to Winnipeg. These were CanWest’s first major acquisitions and they laid the foundation for Asper’s then nascent TV empire.

‘Asper was a major league risk-taker,’ says Bruce Claassen, CEO of Toronto-based Genesis Media. His decision to purchase a piece of Global, he adds, is comparable to American media maverick Ted Turner’s move in acquiring super station TBS, which later set the stage for all-news network CNN.

Don Babick, a 40-year veteran of the Canadian newspaper industry, retired as president and COO of CanWest Publications at the end of April. He began his career at the Montreal Gazette in 1959 and was named president and COO of Southam in 1996. In 1998, Babick was named president and publisher of the National Post and stayed with the organization after its acquisition by CanWest.

In April, Moses Znaimer, VP corporate development, CHUM Limited and president/executive producer of 17 of CHUM’s television stations, stepped back from the company he co-founded in 1972 to focus on distance education and lifelong learning television projects including, the ideaCity Conference and the MZTV Museum of Television.

On the agency side, in February Scott Neslund returned to Starcom MediaVest Group headquarters in Chicago to assume a management post there. He had moved to Canada in August 1999 to launch the Starcom brand and manage the operations as SVP Starcom Canada. Paul Maher, CEO of MediaVest Canada, became CEO of Starcom MediaVest Group Canada and two senior people took on GM roles at the two member agencies: Jeff Marchand at Starcom and Mike Owen at MediaVest.

Restructuring at Starcom Worldwide of Toronto in September resulted in the layoff of Theresa Treutler, SVP broadcast investment director, and Val Buckley, director of the Internet planning department, Starcom IP.

Theresa Treutler then rejoined the Starcom MediaVest Group on Dec. 1 – this time at MediaVest as SVP, P&G broadcast investment director.

Penny Stevens returned to the media management business in November as president of Media Experts of Montreal and Toronto. Before taking a sabbatical, Stevens had been managing partner at The Media Company responsible for the Montreal office and one of five Toronto business units.

To make room, Mark Sherman, Media Experts founder and former president, moved to the exclusive post of CEO.

Research abounds

In the research arena, 2003 marked a subtle but important shift toward developing a deeper understanding of the client’s consumer. Agencies are now investing in proprietary research that looks beyond the traditional demographics of age and gender. This work enhances available syndicated studies by adding the why, when, and where to the what and how much equation.

The year also saw the debate escalate between clients and media suppliers over who should be funding this research.

Jeff Marchand, general manager of Starcom Worldwide in Toronto, summed up the scuffle: ‘What we’re really buying from media suppliers are viewers, readers, listeners. We need to be accountable to whether we actually did purchase the attention of our consumers. Responsibility for that lies with both agencies and vendors.’

The biggest new study of the year was ComBase, an ambitious project by the Canadian Community Newspaper Association designed to put its members on a level playing field with other media. Thanks to its launch, buyers can now assess community newspapers by more than circulation numbers alone. The first national results were released in the fall of 2003 (See ‘Strength in numbers,’ page 2).

The year also saw outdoor advertising enter the 21st century with the testing of Navigator, an automated outdoor audience measurement system developed by the Canadian Outdoor Measurement Bureau. Goodbye paper diaries and car-counters in lawn chairs. With Navigator, a GPS device is placed in the research participant’s vehicle and various outdoor ad locations are fitted with transmitters. As the vehicle passes the transmitting ad locations, the GPS records the individual’s exposure to the ad.

Technology, techshmology

New television technologies that were pie-in-the-sky ideas just a few short years ago became reality in 2003. Video-on-demand and personal video recorders gave consumers unprecedented control of their TV viewing.

On the face of it, this development poses a major challenge for advertisers. They are no longer just contending with viewers leaving the room or changing channels during commercials, now viewers can skip the spots altogether.

Bell ExpressVu was first to introduce a receiver/PVR to consumers in late 2002 with Rogers Cable and Videotron following suit in fall 2003.

On the positive side, through such technologies advertisers now have the potential to gain valuable information about the consumer, which in due time – bar some key privacy issues – will lead to the mass ‘customization’ of advertising.

Then, in mid-November, CTV became the first national conventional broadcaster in Canada to broadcast in high definition with a new HD CTV East signal carried on Bell ExpressVu and Rogers Cable, mirroring its analogue signal. CanWest Global, CBC and Toronto One also have applied for HD broadcast licences.

The big wins and losses of 2003

The year 2003 will be best remembered for the big win that wasn’t – the mammoth federal government AOR. The estimated $100 million account, put up for review in August, was boycotted by Canada’s media management agencies and received only one unqualified bid for the business.

The CMDC, Institute of Communications and Advertising, and the Association of Quebec Advertising Agencies had a laundry list of complaints about the RFP, not the least being the cost and number of man-hours it would take for an agency to complete the 100-page tome.

They also took exception to cheapest price being part of the criteria, as well as the fact that the selected agency couldn’t have any other government business. With all of the agency consolidation over the years, it would be difficult to find a media management company that doesn’t have other government business somewhere in its organization.

Then in November, Communications Canada allowed that it may have gone too far in its demands to protect itself from the wrath of the Auditor General.

So in December, the agency issued a revised RFP with Jan. 26 as the deadline for submissions.

Then, shortly after taking office, Prime Minister Paul Martin announced the cancellation of the controversial federal sponsorship program that embroiled Montreal agencies Groupaction and Communication Coffin in an RCMP investigation and later charges of fraud for allegedly billing and getting paid for work that was never delivered. The program paid Quebec agencies to raise the profile of the government in the province through sponsorship of events.

As for other account shifts, the first six months of 2003 were eerily quiet with the exception of the Government of Ontario business that went up for grabs in February. After looking at several agencies, the $56.5 million account was returned to MBS – the agency that’s handled it since 1989 – for another three-year term.

Then in October Pfizer Consumer Healthcare Group chose ZenithOptimedia Canada to handle its $28 million buying and planning business. This came after the merger of Pfizer with Pharmacia. Much of the Pfizer (previously Warner-Lambert) account, including the Clorets, Dentyne, Trident, and Listerine brands, had previously been with Bates, while The Media Company in Montreal continues to be responsible for its Nicorette and Nicoderm Brands.

ZenithOptimedia scored again in October with the win of the Priszm Brandz business, giving the agency responsibility for the restaurateur’s 760 Pizza Hut, Taco Bell, and KFC locations. It vied with five other agencies for the $28 million account. OMD Canada, incumbent of 10 years, withdrew part way through the process.

Meanwhile, Staples Business Depot looked at several mega shops before awarding its estimated $6-million-plus broadcast planning and buying account to M2 Universal in November. Staples was previously with Genesis Media.

Finally, also in November, BMO Financial moved its business – without a review – to Cossette Communication Group from Arnold Worldwide Canada. BMO had been with Arnold for 17 years. Arnold keeps BMO’s U.S. business for Harris Trust and Savings.

Launches, closures and turf wars

New radio stations and formats, new TV channels, and the TV turf wars between CHUM and Craig Media were just a few of the highlights of 2003.

Craig’s launch of local station Toronto 1 in the fall was seen as a full frontal assault on CHUM’s established Citytv franchise. CHUM, with its successful two-station entry into the Vancouver market still fresh, made application to the CRTC for stations in Calgary and Edmonton where Craig broadcasts its A-Channels.

In the world of newspapers, Sun Media launched another transit tab in the Toronto market in early November, with a daily circulation of 225,000. Called 24 hours, the freebie targets women aged 25 to 49 with full-colour, glossy stock, and short news stories with lots of graphics. Sun relaunched its Montreal transit paper Montreal Metropolitain in October rebranded as 24 heures.

Radio broadcasters unveiled some winning new formats in 2003 – BOB, JACK and DAVE. CHUM captured a big chunk of Winnipeg in 2002 when it transformed a light adult contemporary station into BOB-FM, playing the best music from the ’80s and ’90s with a touch of the ’70s. It began rolling BOB-FM out in 2003 starting in Brockville, Ont. Rogers Broadcasting launched its own version, JACK-FM, in Vancouver and Toronto and Corus followed in July with 107.5 Dave FM in Cambridge, Ont.

CanWest Global ventured into radio broadcasting in 2003 starting with COOL-FM jazz station in Winnipeg and then The Beat in Kitchener, Ont., programming dance hits and hip hop. It also launched COOL-TV, a digital cable network featuring music programming and movies.

Standard Radio signed on in Fort St. John, B.C. in October with 101.5 FM The Bear. The target is males aged 25 to 44 and the ammunition is a classic rock/rock format.

On the less fruitful side, CTV Specialty Television pulled the plug on its WTSN women’s sports digital channel at the end of September, citing a lack of audience and advertising revenue.

On the magazine side, mid-April saw Montreal fashion retailers Mark and George Batchoun launch Strut, designed to reach fashion-conscious 18- to 30-year-olds.

Scarlett, a business/lifestyle publication targeting professional women aged 30 to 60 and published by Vancouver’s Scarlett Communication hit newsstands in May.

In September, Jasmine magazine, a Toronto-based independent quarterly designed with the Asian-Canadian professional woman in mind was unveiled. Later in the month The Walrus, a Harper’s-style pub out of Toronto, launched to target the 18 to 30 demo with a 25,000 guaranteed circulation and high-end advertisers such as Roots, Porsche and Audi.

Also in September, Highrise announced a launch date of February 2004 (from Vancouver-based Apartment Living Magazine). The target is upscale men, with editorial content including fashion, interior design and health.

One of the more innovative titles to come to light in 2003 ended up being an elaborate hoax conducted by Saturday Night magazine. Stu was ostensibly to be launched out of Montreal in October by someone named Stuart Neihardt. It was said to be designed for ‘regular’ guys 18 to 35 and was to feature life-enhancing articles such as ‘No Maintenance: The Stu guide to dating the hot girl’s less-hot friend.’

Finally, in November, both St. Joseph Media’ and Rogers Media Publishing announced the fall 2004 launch of two respective shopping guides (See ‘A no-brainer for advertisers,’p.1).