Big name Polish advertisers play favorites with TVP and Polsat

The new practice gives large advertisers such as Unilever and Procter & Gamble the ability to negotiate for better rates and conditions with the two largest stations, Telewizja Polska (TVP) and Polsat, while basically reaching the same number of viewers. It also enables them to play the two stations off each other.
While Polsat's head of advertising, Andrzej Muszynski, said he was thrilled by the additional revenue, he was also a little concerned.
"I just kept opening my eyes wider and wider," Muszynski said. "It may have short-term benefits, but it may also lead to a long-term disaster."
The stations usually benefited from an even split of 80% of a typical fast-moving consumer good's advertising budget, with the remainder being divided among smaller stations. But according to January data compiled by market research company AGB Polska, Procter & Gamble allotted more than 60% of its budget last month to TVP, sending Polsat a slight 6.2%.
Coca Cola, the third-largest advertiser, took the opposite approach and rewarded Polsat with more than 60% of its budget. Coca Cola said it did not spend a single zloty with TVP last month, according to AGB.
While the new practice may make the television stations a little jittery, other media watchers said the practice makes sense economically because both TVP and Polsat attract the same cross-section of viewers.
"It makes perfect sense," said Jakub Bierzynski, general manager of Optimum Media. "If you go for one of them, our experience shows that there are virtually no differences as far as reaching the viewer goes, and you get much larger discounts."
The stations, for example, often push down their prices for larger advertising budgets. They also, however, typically give a standard discount simply for receiving more than 50% of an advertiser's budget.
But Muszynski cautioned that advertisers may find their message muffled if they buy too much time on one station. "With such a concentration of the spots (going to) one company, what we get is clutter," he said. "In other words, the advertising noise is so loud that it may harm the effectiveness of the advertising."
Also, another media manager who wished to remain unnamed, said that the strategy had more benefits in the short term than the long.
"What you get is a happy client who just bought more time for less money, but the same client may come to you in three months really unhappy about the sales, asking what went wrong with the campaign," the media manager said.
Despite those potential problems, many fast-moving consumer goods companies decided to flex their muscles last month.
Procter & Gamble, for example, distributed 60% of its January 1999 media budget of zl. 12.3 million ($3.5 million) to TVP. Polsat walked away with a mere zl. 765,000 of that money. A year ago, however, Procter & Gamble dropped zl. 13 million ($3.71 million) with Polsat and only zl. 100,000 with TVP. Last year that tactic was seen as an exception to the rule. Procter & Gamble became disgusted with TVP and punished the station for the first few months of 1998.
Now, media watchers said, the practice has become the rule.
"Sometimes it appears to be a sophisticated form of blackmail," Bierzynski said.
While the figures AGB compiles are based on the gross rates the television stations charge and do not take into account discounts, the numbers do accurately reflect a certain trend.
Along with Coca Cola, Unilever also chose private Polsat over public TVP. But Unilever chose to distribute its money a little more equally, giving Polsat zl. 4.96 million ($1.41 million) in January and TVP's two stations zl. 2.96 million ($846,642).
Coca Cola chose to ignore TVP altogether, giving Polsat zl. 3.7 million ($1.05 million) of its total budget last month of zl. 5.9 million ($1.68 million). The soft drink maker gave a relatively large chunk, zl. 2.2 million ($628,571), to small, niche station tvn. tvn and Polsat tend to attract younger viewers.
"Generally speaking, both TVP and Polsat are strong enough to go with either of them," said Maciej Sobierajski, media director at Media Direction. "But of course there are certain products addressed to the age groups that force the choice of one or the other."
The practice could also be good news for smaller stations with a more limited reach, such as tvn, Nasza or RTL7. Those stations may be used more heavily as advertisers turn away from simply splitting most of their money between the two largest stations. The smaller broadcasters also reap the rewards of conflict.
For example, new digital television platform Wizja wanted to place a significant portion of its advertising budget with TVP, but TVP turned away from the money because it is also participating in a competing digital platform, called Cyfra+.
As a result, Wizja split its advertising budget between Polsat and tvn, giving each zl. 7.5 million ($2.14 million) and zl. 5.6 million ($1.6 million) respectively, according to AGB.
However, because Polsat - which is also active in Cyfra+ - refused to sign a deal with Wizja this year, tvn may end up with a much larger share.