SUPPLEMENT: EUROPEAN MEDIA; The difficulties of cross-border media buying

The needs of TV advertisers and media owners are starting to converge across Europe, but press remains a stumbling block.

The needs of TV advertisers and media owners are starting to converge

across Europe, but press remains a stumbling block.

This time last year, one story dominated the headlines - Disney’s

acquisition of ABC. The merger appeared to herald a new era of global

media ownership, opening up all sorts of possibilities for international

advertisers. Even as the ink was drying on Uncle Walt’s cheque, regional

media buying networks were being created. Everything seemed set for a

demand-led leap into a new era of pan-European, or even worldwide,

advertiser-media-owner alignments.

Anybody holding their breath for this to become a reality should exhale

now. There is no more sign that clients can leverage their multinational

advertising dollars now than there was in the 60s or 70s, when agency

networks were expanding worldwide to meet advertisers’ global ambitions.

As David McMurtrie, the director of international media at MediaCom,

says: ‘Very little has been done. It is really the agencies that are now

pushing to try to organise regional deals, particularly if you are

looking at magazines and women’s titles. In terms of anybody going out

and selling cross-border, little is happening.’

In this respect, the European Commission’s TV Without Frontiers

directive is well in advance of market conditions. While regional

campaigns are taking place, local media owners are showing few signs of

wanting to expand rapidly across borders. For one thing, there have been

too many domestic distractions. Hard on the heels of the recession has

followed digital technology and the convergence of broadcasting and


The major media owners in Europe, such as Bertelsmann, Allgemeine

Rundfunk Deutschland, Havas and Reed Elsevier, for all their domestic

might, remain dominant in two or three markets at best. The recent tie-

up between Rupert Murdoch and Germany’s KirchGroup may begin the process

of multi-territory media sales. But it seems more likely that the

attention will be on exporting programming and formats first. As

McMurtrie notes: ‘It is a joke to talk about harmonisation in Europe

when you can still only buy at ratecard in Germany, for example.’

This is not to overlook or undervalue the way current pan-European media

have been developing. In television especially, media owners have been

carefully studying the trend towards regionalisation and the changing

competitive environment and are starting to respond. A prime example is

MTV Europe’s regional expansion programme. The channel which, in the

words of Graham Brown, managing director of Carat International,

‘created Nike’, is embracing the potential of digital to make its offer

more flexible to viewers and advertisers alike.

‘We have realised that one-signal programming to the whole of Europe has

limits. It was a very successful concept, but the second stage of our

business expansion is to fine tune in order to get more out of

programming opportunities,’ Boris Katz, MTV’s senior vice-president of

advertising sales, explains. ‘Digital gives us the opportunity to build

in more local relevance to optimise our viewing and ratings.’

While MTV has long offered a German-only feed to advertisers, the cost

of buying additional space on satellite transponders prohibited it from

becoming more locally targeted. As Katz says: ‘We have had to turn

business away from local markets where they wanted to use us on a local-

only basis. We could do that in Germany, but it was not viable in other


Digital compression technology has changed that. MTV Europe runs three

streams of programming - central, north and south - with regional

variations in content and timings. For advertisers, this means Italy,

the UK, Scandinavia and the Benelux countires can be bought

individually. A France-only service is also being considered.

Katz says the streaming does not represent any dilution of MTV’s ‘global

youth’ outlook. ‘If you are cooking soup and need to add flavours, you

add salt and pepper. That changes the flavour without changing the

soup,’ he says. What it does provide is a USP whereby the channel can do

regional deals while offering local implementation.

Such innovations could prove to be a persuasive factor in pulling more

European brands on to regional-level media. Many products that are

dominant in their home market have a completely different position in

other countries. This has always been an argument against using pan-

European media as opposed to market-by-market buying. However, there are

signs that these sensitivities are lessening. For example, on its

advertising shown during Euro 96 on Eurosport, General Motors stated on

its end titles, ‘Opel (Vauxhall in the UK)’.

Given such local differences, from product launch dates to different

brand names, pan-European media owners are having to become more

flexible. At Eurosport UK, the managing director, Tom Toumazis, says

that media owners recognise that regional advertisers are different.

‘What you find, if you look at the profile of advertising revenue for

domestic media owners, is that in the main it is led by fmcg, retail and

financial services,’ he explains. ‘Those categories have not tended to

be major clients for pan-European media. If you look at the categories

that are international or regional, what you find is alcohol - Heineken,

Carlsberg, Budweiser - cars, sports shoes and music, even though they

have different names and launch dates.’

He believes that it is not a question of size of budget that brings

these advertisers to his channel, but the relevance of its audience to

their brand position. ‘Once they are sold on the benefits of taking a

spot, we can show that the advertising is also cost-effective,’ Toumazis


Eurosport has yet to go digital, but currently it does allow separate

audio feeds for France, Germany, Holland and the UK.

This allows clients in the region to support multiple release schedules

for films or records, for example. Blockbusters such as Mission:

Impossible, Twister and Eraser have been using six- to eight-week

campaigns through the summer on Eurosport. Few other media could deliver

68 million homes as cost-effectively or flexibly. With the added

attraction of the Olympics and Euro 96, the channel has notched up a 40

per cent increase in revenues this year.

Toumazis does not believe the revenue rise will prove to be a one-off.

‘What is not as understood as it should be is that our channel is

measured in 65 per cent of the marketplace. We have electronic people-

meters in seven markets, of which the three main ones - the UK¯, France

and Germany - account for 55 per cent of viewers. We can establish the

profiles of people who watch each sport and how they differ between

golf, tennis, Formula 1 and football.’

The idea that pan-European broadcasting means one-size-fits-all is

steadily being eroded. It is also why Carat’s Brown believes that there

will be a greater effort made by media owners to address the needs of

regional clients, including signing multinational deals with local

options. ‘Pan-regional media is not a panacea for blanket European

advertising. It has to deliver local audiences effectively,’ he says.

‘Because of the scale of the regional media’s reach, it is obviously

very attractive, but the only way those media are really going to build

audiences is by designing programme formats for the audience and taking

advantage of multi-transponders for local language cut-ins.’

An added benefit for media buyers is that the increased local presence

of satellite broadcast channels will challenge the dominance of

indigenous TV. This is also working in the other direction, with new

stations such as Viva in Germany beginning to compete for traditional

satellite audience segments such as MTV’s heartland of 15- to 34-year-


This should make the pan-European broadcasters work harder to improve

their position in each market. As Brown notes. ‘Regional media is only

as strong as its weakest market.’ But if the needs of TV advertisers and

media owners across Europe are starting to converge, press remains a

stumbling block. Leaving aside the business magazines which have one

regional issue and can be bought regionally through local sales houses,

putting together a schedule of women’s titles, for example, is sheer

hard work.

Titles exist that are common to the major European countries, such as

Elle and Cosmopolitan. The problem is that they are published under

licence, often by different publishing houses. No one director is able

to negotiate a multi-territory deal with all the efficiencies that


It is a gap in the market that Reader’s Digest has long tried to fill

and is now going after with a vengeance. ‘There will always be clients

in individual markets who can capitalise on the fact that they are doing

other business with the Digest. They are our primary targets,’ Deborah

Bellini, director of global advertising sales for Europe, says.

‘We are going after very large corporations who are using us in five

countries, but are perhaps not using us in Eastern Europe, for example.

They will get favourable deals.’ With pan-European advertising

accounting for 10 per cent of total ad dollars in the magazine at the

moment, there is plenty of scope to increase this type of business.

Bellini acknowledges that for many multinational titles, a barrier to

building regional revenues has been the constant pressure to meet local

sales targets: ‘The more clients buy, the better the deals, the better

revenues we get. It is a question of looking at opportunities. That is

not easy to do if you are concentrating on bringing in business to close

an issue.’

Her view is that pan-European media have to look beyond one-off

advertising deals. The major opportunities lie in cross-media and multi-

media strategies. That might mean finding ways for the Digest’s clients

to exploit a tie-in with the Reader’s Digest Association’s impressive

collection of Impressionist paintings via a sponsored exhibition, for


Bellini says that research has shown a strong demand among local clients

and agencies for centralised buying: ‘First, to save time in doing a

centralised deal, as opposed to working out of each market. Second, for

flexibility. If you are looking at the whole picture, you can say you

don’t mind being more flexible and creative. You control it from the

centre, as opposed to local magazines’ needs being fulfilled.’ She adds

that the ‘fame’ which can ensue from putting together big deals also

appeals to advertisers.

For the moment, cross-media sales are even more limited than regional

ones. With the exception of Time Warner, Dow Jones (the Wall Street

Journal Europe and European Business News) and Pearson (Financial Times

and FTTV), there are no media owners with a stake in both broadcasting

and press at this level. Despite the fact that the emphasis until now

has been on ownership of media, there is room for strategic ventures

between media-owner rivals that could mirror those on the buying side.

‘It surprises me that joint venture cross-media partnerships haven’t

happened. In Northern Europe, cable is very strong and TV takes a large

share of advertising from print. It is the traditional advertising

vehicle of press that is losing out. Bertelsmann is very well placed to

exploit the opportunities,’ MediaCom’s McMurtrie says.

Of course, if pan-European advertising was being sold regionally and

across media, it would remove much of the raison d’etre of those same

media buying networks. Until media owners decide that there is money to

be made out of such alignments, the painstaking task of country-by-

country planning and buying looks like it is here to stay for some



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