Ad placement firms don't make money unless they spend money
“What do you mean you haven’t spent the money, Billy? Just spend the money. I don’t care about better programming! We don’t make money until you spend it!”
In 1981, Ogilvy & Mather’s New York President, Shelley Lazarus, taught me how network buying really worked. I’d cut my teeth as an assistant at the third biggest national spender, American Home Products. And it was my boss at AHP who hired me at Ogilvy & Mather to fill an opening. But Shelly was pissed because Ogilvy & Mather had just won the national buying assignment for a new division of American Express, Investor Diversified Services. The actor Jason Robards was the spokesman for that creative series. I was making the initial buy with only an assistant. My boss was stricken during the Eagles vs Raiders Super Bowl. We had other buys for Amex, Cards and Cheques in different dayparts: sports, late night, daytime and news. I had money for Owens Corning Fiberglas and Kimberly Clark, too. I worked insane hours and was told, “For someone in another group to help Billy, they have to want to help Billy.” This was from a company whose motto was “Nothing Beats First Class.”
Shelly wanted I.D.S.’s money spent. It was new money. The longer we held it, the better the odds were that it would dry up. Shelly really didn’t care what I bought over my four years working on Amex at Ogilvy & Mather. She didn’t sit in on any of those meetings. I readily found fairly priced shows for every national Primetime TV buy. Each of them got a big rating, 15% of U.S. Homes or more except for summer viewing. When we presented the I.D.S. schedule to Ogilvy & Mather’s I.D.S. team, the Account Executive said, “Billy got us great shows.” Yeah, right. Enos? Manimal? Hot Pursuit? Hardcastle and McCormick? After the presentation, one guy quipped, “Hey Sternberg, why didn’t you buy shows people watch?”
Years later, my business partner, NBC’s Paul Klein, proffer of TV’s Least Objectionable Programming Theory, and I went to see Bob Silberberg at an agency called Backer Spielvogel Bates. Years after the I.D.S. buy, I left Ogilvy for ABC Primetime. Bob Silberberg was my boss. In due course, we both left ABC. I went with Paul. Bob ran the TV group at Backer. Paul and I told Bob to take the cost of one primetime :30 broadcast network announcement and we’d act as a fourth party to build a higher-rated network with that money by linking them over a spectrum of cable channels simultaneously; that horizontally buying across cable instead of buying vertically from broadcast shows would yield higher ratings at lower cost per thousands. But Bob said he’d gotten his clients to “digest media inflation.” Shelly wanted I.D.S. money spent even if it was on lower rated shows. Bob wanted Mars, say, to bid up the prices of higher rated shows to earn more commission.
About when we saw Silberberg, I ran into an NBC salesman who best summed up the media business, “There’s no there, there. The shows and the personnel are always changing.” True. Something was always in flux. Years earlier, he and I had the most spirited negotiation when I was at Ogilvy & Mather and he was on NBC’s Late Night Sales Team. I needed Saturday Night Live scattered over 52 weeks for American Express Cards. Everything was swell except for the first quarter. NBC’s pricing was out of line with our estimates. The salesman and I went back and forth endlessly. He couldn’t impose my pricing on his backroom. I went to my boss’ boss, who dialed up my salesman’s boss, NBC’s Late Night Sr. V.P. I was put on the speakerphone to explain the dilemma. My salesman was on the phone, too, when NBC’s V.P. made us all stupid: “So take out first quarter!” Ogilvy & Mather didn’t surrender Amex’ Saturday Night Lives willingly, but we didn’t overpay.
American Home’s President’s son-in-law was my friend’s boss at Lever Brothers. Both of our company’s national TV brands reached 85% of their target audiences eight times over a month because ABC, CBS, and NBC monopolized TV’s viewership. Today, it’s unthinkable that an ad schedule of only top ten broadcast network shows can reach near that. The Primetime schedules that traditional advertisers buy today don’t buy as much brand awareness as Ken Mears or Copper Fit.
I was trained at American Home to be a sniper, to look for opportunities to drive down costs. But I could have told Shelly Lazarus that if a baseball’s team batting average is only .250, but each batter got his one hit out of four in the same inning, the team would probably win every game. In other words, had I told Shelly that we had a cable “roadblock” option instead of trying to find better shows for I.D.S., she’d have said, “Spend the money, Billy!”