Truth or Dare: The Deal With Billion-Dollar Multiplatform Deals

Have you heard about the billion-dollar deal between OMD and Disney? In a recent Electronic Media article, it’s appropriately dubbed “a big fat deal” where :the monster of Madison Avenue meets the behemoth of broadcast row.”

All we know about the transaction thus far is that it’s approximately a 5 percent increase over what was spent with Disney last year. Weighing in just short of $1 billion, the breakout is said to be: $500 million to ABC (with $300 million in prime time), $150 million to ESPN, and $75 million to Lifetime. The remainder is said to be allocated to “other” Disney properties.

Am I missing something here? What’s wrong with this picture? In the articles I’ve read in the trades, I have yet to see any mention of online advertising whatsoever. Is it assumed that online advertising is just another element in this integrated media mix? Maybe it’s thrown in the “other” bucket.

Let’s take a look at what’s been going on with Disney’s Internet properties in the last year or so. Remember the GO Network? At one point, the sites that made it up — including Infoseek, ESPN.com, and ABCNews.com — were doing quite well. Page views soared. Ad dollars were up. Traffic was better than ever. Then one day, these sites forged a giant conglomeration under one umbrella. Within a year of this newly created portal, traffic numbers, ad revenue, and page views were down. Resembling much of the fallout last year, GO was going, going, gone.

At that time, we were all clinging to our jobs and our clients. The choices were not promising: We either took a duck-and-cover approach, ran fast as hell to stay ahead of the curve, or disappeared into thin air. The sentiments of media mogul/celebrity Michael Eisner, CEO of Disney, certainly weren’t kept secret. In late January last year, Eisner defended closing up the GO Network by saying, “The advertising community has all but abandoned the Internet.” Perhaps this was a multibillion dollar lie to protect his own @#$% up?

Iconocast was quick to react bitterly, citing analysts and writing, “Creating hub Web sites to vault people to other content sites may be an ill-fated strategy, analysts say, adding that Web users, like TV viewers, go to brands they trust.”

Charlene Li, an analyst at Forrester Research, agreed, “The belief in centralizing and forcing people into one media entity is a fallacy.”

Since then, Disney sites have been working independently. For instance, I have one sales rep at Disney.com and another at ESPN. It might be a trite statement, but I like it this way; it’s nice and clean. When an online planner/buyer wants to cut a larger multiplatform deal, other reps get involved. It’s really quite easy. However, as much as I’ve tried, I can’t get Eisner’s old quote out of my head. I can’t get over the power of one man’s words and how they hurt people like us.

Have we recovered yet? Are we out of the slump? Jordan Rohan, an analyst at SoundView Technologies, shared some insight with CBS MarketWatch in a recent article. He said he believes the base level of pricing has been reached, as evidenced by the tightness in 100 percent insider sales.

“At the very least,” Rohan said, “things are stable. The increase in demand for online advertising is not conclusive, but evidence is persuasive.”

Besides, he added, “there are rumblings that there will be a very big holiday online advertising market. This will become more clear in the fall.”

So here we are again. We are inundated with headline words such as “upturn” and “recovery” boldly used. If the network upfront market yielded $8 billion recently, what implications does this have on online spending?

Related reading

screen-shot-2016-09-13-at-10-20-04
mike-andrews
rsz_adblock
/IMG/224/276224/adblock-plus-logo-320x198
<