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Mandel comments on Apollo issues

All of the headlines are now saying Nielsen and Arbitron have changed strategy for the test of the new ROI tool Project Apollo. The ratings companies that partnered on the proposed ROI enhancement service are now pitching broadcast and cable nets, radio nets and TV syndicators to join the project and support it financially. Why? After more than a year of trying to sign clients, they have still inked only Procter & Gamble. It's going to cost some 100 million to get this thing off the ground.

Arbitron VP Thom Mocarsky noted that the reduction in the Apollo Project test panel from 30K to 6K people was announced last May, along with the accompanying price reduction, so that's nothing new. What is new is a 350,000-dollar package being offered to TV and radio networks that would give them full access to Apollo data -- "a tier that gives them full access beyond what they get for encoding." Mocarsky told RBR/TVBR that came about because some of the TV nets asked how much it would cost to come aboard as full participants, since they are advertisers as well. They would also get a seat on the Apollo Advisory Client Council to help guide Apollo's rollout. As to other advertisers on board beyond P&G, "We have people who are along in the subscription process. We do not yet have ink on paper," Mocarsky said.

Nielsen's Jack Loftus also told us the price reduction agreement (from 1M to 350K) was announced last May, and that the way it was reported elsewhere made it "look like a fire sale, and that's just not true."

Currently, the test of the project is set to start 1/1/06. Networks will have to encode their programs with audio signals that can be picked up by Arbitron's PPM. Nielsen's Homescan technology will be used to glean purchase info.

We asked Jon Mandel, Chairman/MediaCom US and Chief Global Buying Officer MediaCom Worldwide, what he thinks:

"I think that the Apollo Project is a great idea. It's something that advertisers want. It will be, ideally, multimedia. And ideally, these things are paid for by the advertisers and the media companies and the advertising agencies - - all of the people that would use the information. And everybody has to put in equally. Everybody has the potential to get a benefit out of Apollo, so everybody should have some skin in the game. I get concerned that everybody may be trying to bite off more than they can chew, in the sense that I'm not sure that Arbitron, as good as things look on the surface of their PPM, when you scratch below the surface, there may be some real issues there. Like I'm not sure that their in-tab and their fault rates are any good whatsoever. And I'm not sure that they can physically make enough machines. They may be able to, but there are a lot of questions about the Arbitron piece. There are a lot of questions about the Nielsen piece. And there are a lot of questions about whether most brands need a day-in, day-out or if they just need a snapshot every three to four years.

With that being said on the concerns, if we as an industry do not step up right now and do this, we in the broadcast industry are going to find we don't have an industry as clients flock to things like the Internet, which do have numbers. Although I must say they're not as good as clients think they are and they're not as good what Nielsen now does in television. But we're never going to get better and we're never going to save ourselves if we don't step up now - - all of us. Nielsen has to step up, the networks have got to step up, the TV stations have got to step up, Arbitron has got to step up. And they've got to step up in a big way. They've got a long way to go."

What do you think about them still only signing P&G to this, cutting the costs to join and now asking the networks and syndicators for support?

"Again, most brands don't need this day in and day out. But I think from a broadcast sellers' standpoint, the kind of data that, in theory, you could glean from this could be very usable. If you could come to me and say, 'CSI is phenomenal for selling cars. It's not so good on toothpaste. But Survivor is phenomenal on toothpaste.' You can drive your margins better on a program-by-program basis and basically do a yield management system of selling your inventory, that for a local TV station or a national network, would be more than paid for.

Now it may not be do-able. As I said, I have serious concerns. But we'll never know unless we all step up. Look, I get very upset with the industry. When AGB was coming into this country way back when with they were coming in with their version of people meters, and everybody said we should do this. And when the rubber met the road, my company signed up for it, a syndicator that's not in business anymore signed up for it, Orbis signed up for it and CBS signed up for it. Nobody else signed up for it and then bitched and moaned that we didn't have it. I just really think that the industry has got to learn to put its money where its mouth is. Maybe it doesn't work, but there's a reason why some things are called investments and others costs. This is an investment in trying to get to a place where I can get better yield management out of my advertising and then sellers can get better yield management out of the inventory that they're selling. And if we don't step up now and try it, we're all going to be sitting here with our thumbs up our ass five years from now going, 'Why didn't we do this?'."

What about the clients who may not want to spend so much money and don't need information on a daily basis? Different pricing models?

"That's one of the things that has to get discovered along the way. Maybe they ought to offer a different, per-use basis, a once a month basis, maybe there's a six-brand basis. There are also questions about what do you do with new brands. If you have a new toothpaste, do you just use your old toothpaste information? Shouldn't you pay for that for the new brand? You can't really do it based on sales. Part of the problem with the original pricing was also somewhat based on...both Arbitron and Nielsen were suggesting that it be based somewhat dollar spending you do in advertising. But maybe that's not fair - - maybe it should be on annual sales of the product. All of these things need to get discovered. But we're not going to discover it unless we give this a shot."

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