Influential Merrill Lynch media analyst Jessica Reif Cohen has called cross-platform media deals "the future of advertising," and she's hardly alone in her thinking.
    But until just recently the idea of assembling major ad buys across several media through one seller has been more talk than actual deal-making.
    All that changed last week, however, when Procter & Gamble, the country’s third-largest advertiser with over $1.5 billion in spending, cut a $300 million multimedia deal with Viacom.
    It was certainly a groundbreaking deal for both parties, but more significant, say analysts, is that it legitimized the concept. And that could set off a wave of similar deals.
    Such is the clout of P&G that where it goes other major advertisers are quick to follow.
    P&G was the first advertiser to use TV optimizations in the U.S. and was one of the first and largest to consolidate its media business with one agency. As others followed, the effect was to transform how media is bought and sold in this country.
    "If the initial deals work, we will see advertisers getting more involved in this type of deal-making," says Donna Salvatore, chief executive officer of MediaVest USA, which handles the P&G business.
    But that's if it works.
    "If we find that, when all is said and done, the objectives aren’t accomplished, it will go by the wayside, and we’ll be back to business as usual."
    With cross-platform deals advertisers attempt to lower unit costs through volume discounts by advertising across many of the marketing properties of giant media companies, like AOL Time Warner and Viacom.
    A number of lesser cross-platform deals have been done prior to P&G's. Viacom Plus, the Viacom division that arranged the P&G deal, says it’s handled about 19 so far.
    But the P&G cross-platform deal is significant because it is by far the biggest to date.
    The deal marks a 50 percent increase in P&G’s spending with Viacom and represents about 20 percent of its entire advertising budget and about 30 percent of its television spending.
    The deal includes advertising in Viacom’s broadcast networks, CBS and UPN; eight cable networks, including MTV and BET; its syndicated television properties; and non-media, like promotions and sponsorships. 
    Over time it may include radio, outdoor, and even deals with Blockbuster movie rentals.
    But the complexity of cross-platform deals may limit them to only the biggest media buyers and sellers.
    "This deal has been in the works for a number of months," says Salvatore.
    "I don’t know how many people are ready to jump into that form of deal-making. I think it’s something that will increase moving forward. But it requires a tremendous amount of time and resources."
    The impact that P&G’s cross-platform deal will ultimately have on the rest of the ad industry will unfold in the next few months and years.
    But MediaVest Worldwide, citing industry estimates, projects that up to 40 percent of media buys will be cross-platform in the next few years.
    That has the potential to completely shake up the current media buying industry, which deals primarily with a single medium at a time.
    One thing that could change is the annual upfront season, when most of the coming year’s TV ad dollars are bought and sold. Right now, there are separate upfronts for network TV, cable, syndicated TV, and kids TV.
   An increase in multimedia deals could have the effect of merging the various upfronts into one protracted selling season.
   One thing the P&G deal, for all of its significance, will not accomplish is kicking off this year's upfront.
    In the past at least, the upfront tended to kick off with the first major deal, and it was often led by P&G.
    But that was the past, and this upfront may not get started for another few weeks, by all estimates, because of the depressed ad economy.
    "We’ve had a couple of years where it was almost as if a bell went off to signal the start of the upfront," says Salvatore. "I have a feeling this one will be more of an easing into it."

June 5, 2001 © 2001 Media Life

-Kevin Downey is a staff writer for Media Life.

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