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Optimistic TVNZ announces rate increase, engages in ‘argy bargy’ with OMD

April 16th, 2010 by StopPress Team

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TVNZ has released its ratecard for the July – September 2010 period, with TV ONE rates rising by two percent and TV2 up six percent on the back of improved numbers. But not everyone appears to be on the same optimistic page as the national broadcaster, if the apparent stoush with media agency OMD is anything to go by.  

Along with improved ratings, Bridget Snelling, TVNZ brand and business marketing manager, says the ratecard rise also reflects changes in programming, likely performance and a stable CPT.
“The market has changed – we are no longer operating in recession playing a short market – therefore we encourage laydown at ratecard opening so that advertisers ensure they get the spots they want in the environments they want,” she says.

Buying at ratecard opening is the most cost-efficient way to buy airtime (see graph), she says.

She says the programming strategy is to grow the TV ONE audience while maintaining TV2’s success. This does not mark a major shift away from its core of ONE as a channel with quality international and local content. But she says the July – September period will see the addition of key new content to broaden the channel’s appeal.

“Key schedule changes will provide a gateway earlier in the week. This includes a new Sunday night line up with Criminal Minds and Damages. But British drama remains important as it provides breadth and depth to our content.”

Content, such as Fair Go, will be revamped to reflect the channel’s evolution and she says news and current affairs is in the midst of the biggest transformation project in the last 20 years and will enable multi-platform news content creation”.

Over on TV2, the six percent increase is a result of audience figures that are up 10 percent year on year. And, with some big shows coming into the schedule, Snelling says “we will continue to have a strong schedule with top quality shows for advertisers to buy into.”

But judging by a some industry tension that was brought to the attention of StopPress, TVNZ might be attempting to talk to some of those advertisers directly.

According to a source, Steve Tindall, the trading director at OMD, a part of the Omnicom Group, which industry insiders estimate controls around half of the total media buying market in New Zealand, appears to have had a bit of a spat with TVNZ. Apparently, he wanted TVNZ to give OMD’s clients a 65-67 percent volume discount on advertising rates. TVNZ has apparently said they’ll give as much as 55 percent but flat out said no to the request.

Tindall, who started in October, is English and is renowned as a ball buster, then decided he’d walk and take all of the clients that advertise with TVNZ along to TV3, whose rates are lower. TVNZ have apparently decided to counteract this, saying they’ll approach and deal with the clients one on one, without OMD as an intermediary.

Dave Walker, TVNZ head of advertising sales, intimated a situation like this was not outside the realms of possibility in the Jan/Feb edition of NZ Marketing magazine: “If we can’t get in front of marketers through the facilitation of advertising agencies, then yes we will [talk to them directly]”

Kath Watson, managing director at OMD, refused to comment, but then ended up commenting. She says the story is “complete crap” and “it’s completely out of proportion.”

“TVNZ is trying to wind it up,” she says. In terms of OMD’s clients she says: “We’re not doing anything our clients are not aware of.” And  she says what’s happened is between OMD and their clients and no one else.

When told about the rumour that TVNZ are approaching clients directly she said: “Good luck to them.”

Bridget Snelling didn’t want to talk about the OMD stoush either, saying only that “we have opposing views of where the market is and the trading environment. It’s a commercial matter”.

One media boffin spoken to called it good old “argy bargy”. With TVNZ dropping its pants last year and, in some instances, offering discounts of up to 80 percent for unsold inventory when playing on the short market, he says it’s a tough sell trying to up the price now. But he says the most interesting aspect of this standoff is that it might be an indication of TVNZ’s future intentions (it put the whole industry on notice late last year and announced it would halve agency commission to 10 percent next January).

“They’re trying to change their position in the game,” he says. “There’s a view that TVNZ want to be an agency and do it themselves. But that’s bullshit. You’ll have all the dickhead clients who will go for that . . . They don’t have the skill set to talk directly to clients because they’re just sales people.”

With the likes of cancellation periods to consider and TVNZ stakeholders on their books, he doesn’t think it’s likely that OMD would move all its spend to TV3. It’s just a bit of hardball and it’s not unusual. Although, he notes that OMD already has very close ties with TV3 (Kath Watson is ex TV3) and he believes around 60 percent of its TV spend is going there.

“They’re overtrading and getting better deals and also keeping TVNZ competitive,” he says.

Despite improved ratings, he says TV just isn’t the volume deliverer and response medium it used to be, which means it is becoming more realistic for ball busting media traders to throw their toys and walk out if they don’t get the deal they want. So, watch this space.

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Tags: Advertising, BRidget Snelling, Kath Watson, OMD, ratecard, TVNZ