In recent years, multi-national advertisers have had to manage two conflicting forces. On the one hand, they know people are motivated to buy things by what they experience in their immediate, local environment. On the other, they know growth and efficiencies can be achieved by globalising aspects of production, distribution and marketing.
Pan-European media owners and their sales teams, have benefited from the second part of this equation. But, like clients, most also accept the need to offer something more compelling than a one-stop sales pitch based on cost-efficiency.
MTV Networks Europe provides a good example of how the debate has moved on from the early Nineties. Having debuted as a single pan-European brand, MTV is now broken down into five programme feeds and 10 advertising windows. It also has a range of analogue and digital sister channels which cater for different European audiences. MTV’s director of sales, Chris Dobson, has dropped the term “pan-European” in favour of “multi-national”. In his view, the distinction between national and regional revenue is less important than “ensuring we grow client yield. It doesn’t matter how they deploy the money as long as the price is right and they are spending more with us.”
Levels of sophistication
The MTV approach is not a sign that pan-European advertising is dead – simply that clients require greater levels of sophistication than previously available. That’s why Dobson has sales offices in Germany, Italy, Sweden,the UK and is about to open up in Holland.
According to Dobson, clients might want to upweight key markets in order to reflect high levels of product distribution. Or they might need to stagger a campaign. “A film distributor like United International Pictures is a big pan-European client – but it rolls out films at different times in each country,” he says.
The time-sensitivity of movie launches has a knock on effect for sectors like licensing and merchandising. Any client launching a product on the back of a movie will only go to a pan-European channel like Fox Kids or Cartoon Network if it can ensure sponsorships and promotions will be rolled out at the same time as the retail drive.
For Dobson, the ability to structure campaigns at national as well as international levels has had important spin-offs. “It has raised the business’ brand count to 800 – making it less reliant on a small pool of partners. It has also “allowed us to dip into national ad budgets which are usually much bigger,” he said.
With the ability to be measured on domestic ratings panels, the channel is also able to argue its case in a language buyers understand – cost per thousand.
The complexity of pan-European media is underlined by the very different jobs that each of the media brands is trying to do. While MTV is primarily seeking to expose fashionable brands to large youth audiences, CNN International is targeting business decision-makers – either at home, in transit or at their business destination.
In this respect it has much in common with pan-regional print media such as the Financial Times, Wall Street Journal, International Herald Tribune, The Economist, Newsweek, Time, Business Week and Fortune. Each of these titles seeks to target the businesses and individuals responsible for breaking down trade barriers.
CNNI head of sales Eric Clemenceau says “the fourth quarter of 1999 has been very strong. Revenue is up 20-25% up year-on-year and we have seen a lot of up front commitments from clients. More and more people are coming to us when it used to be the other way round.”
Clemenceau sees two reasons for this. The first is that “companies are either merging or getting rid of secondary brands. They want to channel more of their effort behind a single message.” The second is the channel’s cost-effectiveness. “It is expensive to reach senior executives locally. You would have to spend about three times as much to get the same audience we deliver with less wastage.”
However Clemenceau does not see CNNI as a simple pan-European sell. He presents it as one dimension of a Time Warner proposition that encompasses magazines like Time and Fortune. The most visible fruits of this approach to date have been ventures such as Visions of Europe and China Now. Both were multimedia editorial projects which were backed by blue chip sponsors.
For Clemenceau, a sales person is not doing his job properly if they fail to offer clients the full potential of TW across media, continents and marketing disciplines. A client-facing department based in New York seeks to offer “lateral solutions” to major clients.
With telecoms and media giants continuing to consolidate their businesses, the attempt to offer clients marketing solutions across numerous media is expected to become a more significant factor in the market. However the jury is still out on this approach.
Critics claim the potential to deliver such all-embracing solutions is logistically limited and likely to lead to unnecessary discounting. Others see the potential for conflicts of interest. Viacom’s MTV, for example, could not favour its Paramount partners without jeopardising a range of other relationships.
But Clemenceau claims that the likes of Volvo, Nokia and Swatch have all bought into the TW model. “Clearly, if you try to blend weak media brands with strong ones this model doesn’t work. But CNN, Time, Fortune and the internet combined can offer a powerful platform.” It can also win revenue that might have gone elsewhere.
Effective marketing system
Clemenceau’s own concerns centre on agencies and clients who take unfair advantage of TW’s formidable research capability. “We build complicated media proposals for agencies which never have any real intention of spending money with us,” he says. “They only want to use our knowledge to impress their clients.” Alternatively, “clients simply don’t tell us enough about what they want to achieve to be able to provide them with an effective marketing system.”
In the print market, it is noticeable that none of the main players wishes to be presented as just a pan-European media option. Like their clients, they want to been seen to operate at global and regional levels. Most of them also reinforce the need for some localisation by drilling down into individual territories.
When it comes to Europe, the International Herald Tribune has built up its activities in the UK – a reflection of the key role that London plays in shaping regional advertising strategy.
Simon Mukerjee, who was appointed UK ad sales director in February, has been visiting agencies to present the 24-page title as “a credible, comprehensive and concise view of the world.” The IHT currently has 650,000 readers worldwide.
Mukerjee’s key ad sectors are financial, telecoms, IT, travel, luxury goods and fashion. He aims to “aggressively grow business” in these fields. He also wants to boost the IHT’s share of sport and automotive advertising.
With the emphasis on globalisation and convergence, Mukerjee believes pan-regional advertising’s time has come. “It’s a cost effective way of reaching decision-makers and senior political figures,” he says.
However, he adds that the IHT has also recognised the need to have a position in individual territories by forming local partnerships with newspapers in Italy and Germany.
CNN, the archetypal global brand, has also sought ways to segment Europe. It has a stand-alone service in Spain and is a major shareholder in German news channel ntv.
The Financial Times is in its 20th year of international expansion and now sells more copies outside the UK than within, says regional ad director for continental Europe Ben Hughes. In mainland Europe, 130,000 copies are distributed from print plants in Germany, Spain, Sweden Italy and France. A new plant is likely to be built in Eastern Germany to service Eastern Europe which “is a strong ad revenue market.”
Hughes endorses the multi-tiered approach outlined by his peers. “We have to be where the potential is – and that may lead us to independent editions for the US, Asia Pacific and continental Europe,” he says. On a local level, the paper has formed partnerships with domestic companies in France, Spain and Germany where it recently launched FT Deutschland with Gruner & Jahr. Arch-rival The Wall Street Journal also has a German joint venture with Handelsblatt.
For Hughes, the buoyancy of the pan-European advertising market reflects “more cross-border mergers and acquisitions and a free flow of labour between European countries.” He believes the threat of online as an advertising alternative to print has yet to materialise. But the FT is seeking to position itself in new media via ft.com.
Dedicated to pan-European route
When it comes to cross-media selling, the FT’s parent company Pearson has an executive who offers opportunities to clients across the FT Group. “He has a hit list of 20 clients,”says Hughes. “If we wanted to target a company like Ericsson for example, he would make a pitch with our local Swedish representative and outline the options we can provide.”
The greatest defender of the pan-European faith is Eurosport which – apart from launching a dedicated service in the UK– has resisted the urge to offer country-by-country propositions.
Deputy sales director Dominic Burns says “the fact that we haven’t gone that way when the technology exists to do so, shows we are dedicated to the pan-regional route. We are fortunate that Eurosport’s only serious competition is in the UK and Germany because the capital cost of setting up a sports channels for individual territories is huge.”
Burns says proof of the effectiveness of Pan-European TV is that Eurosport’s pan-European advertising has grown year after year. Airlines, alcohol and sportswear have been staunch supporters because of the network’s ability to provide male audiences at low cost. But there has also been growth in business from clients seeking upmarket men. “JP Morgan, Panasonic, Nokia, Ericsson, Dell, Texas, Saab and Yahoo! have all advertised with us,” says Burns.
A persistent criticism of Pan-European TV, as opposed to print is the reliability of research. Eurosport has addressed this by installing meters in 10,000 European homes to provide a robust measurement system. “We feel accountability is key,”’ says Burns. “Pan-European media isn’t only about audience levels. Being able to provide a national cost per thousand in major markets is central to our policy.”
CNNI’s Clemenceau says research can always provide a reason for buyers to complain. But he heralds the introduction on a CNNI-backed survey called Europe 2000 as a major step forward.
“For the first time we have a planning tool for a specific upmarket demographic. Combined with the International Air Travel Survey and European Media and Marketing Survey we can provide a good understanding of the market.”
For it’s part, radio is now deliverable across Europe by satellite and internet. But in practice, the most effective way to communicate an advertising message to the continent is via programme syndication, says Unique Broadcasting’s commercial director John Quinn.
Unique is part of the cross-media team that has developed The Pepsi Chart Show as a tailored bi-media proposition for individual territories. Quinn is now keen to grow that model for other advertisers. Currently, Unique has a contract to repackage MTV content for radio. In a recent deal, some Carlsberg offices across Europe sponsored Unique-produced radio shows created out of MTV’s European Music Awards.
Through its syndication business, Unique has good contacts with most European radio owners. Quinn believes that by pairing up stations with sponsors, Unique can “unlock the pan-European market”. He says: “We have been selling shows for cash for 10 years. But we want to move towards an advertiser-funded model. Tailored radio vehicles can hit enormous audiences in a credible environment.”
The major issue he faces is persuading media agencies to create budgets for such ventures.