MTV switch is music to advertisers’ ears

In the past year the European arm of MTV, the world’s premier youth and music station, has spent millions of pounds changing the structure of the channel, the way it sells its advertising, and its programmes.

Its objective is to be more flexible and the reason is simple – to make money. It has attracted advertisers including Coca-Cola and Levi’s to its cause. European senior vice-president for advertising sales Boris Kaz says: “We realised there was a lot of room for growth for local programming and local advertising.

“Advertisers were coming to us and saying that they just wanted to advertise in one or two European markets. We didn’t have the technology to do that and had to turn away business. I hate doing that.”

Behind Kaz’s simplification is the fact that all pan-European broadcasters have been searching for the technology to deliver local advertising – MTV is the first to achieve it. It is estimated to hold between 53m and 56m of the total pan-European advertising market, which is valued at 170m. Sources believe there is a further 20m growth in the market, which is what Kaz is targeting.

Tania Laonzi, head of the media agency CIA’s pan-regional TV unit, puts the change into perspective: “It (MTV) has changed a channel into a network. It is a flexible model that a lot of other pan-European stations will have to follow.”

All the major pan-European cable stations are currently tailoring their output for specific regions inside Europe, and in some cases, individual countries themselves. Eurosport, CNN, NBC Europe and BBC Worldwide are all, to varying degrees, going down the same route.

Tom Keaveny, advertising sales director at Eurosport, is in no doubt about the importance of regionalisation. “It’s crucial,” he says, “we are a pan-European channel but we do not like to present ourselves as a foreign channel.”

Earlier this year Eurosport introduced a Belgium feed, called Eurosport 21, which screens national sport in the country and sells local advertising. The link is currently switched on for two hours a day, however the station is looking to roll out this idea to other parts of Europe.

What makes MTV different is that it is approximately a year ahead of any of its pan-European rivals. The music channel now has four different feeds – MTV UK, MTV Northern, MTV Southern, and MTV Central – to supply Europe. It has spent several million pounds on new digital compression technology which handles the complex mix of programming and advertising the station provides.

On MTV it is now possible to advertise or sponsor individual shows by country, region, or right across its 42 European territories. This makes tactical advertising possible and reduces waste.

This gives big brands the opportunity to run pan-European advertising throughout the year, tailored regional ads and even country specific ads if the company has a new launch or promotion. Kaz says Levi’s and Coca Cola have begun to work this way on the station.

By contrast, Nike is launching a series of pan-European ads on MTV that will only be shown in two languages – German and Italian. The ads are visually striking and intended to stand on their own right across Europe.

In the UK, Casio has signed a deal for its luxury watch G-Shock to be the first sponsor on MTV UK’s feed. The company is understood to be paying only 20,000 to sponsor an extreme sports show called Wheels, which begins its run on the channel in mid-October.

Casio’s head of UK marketing Kevin Roberts says: “This had to be a UK-only deal because the various European divisions are promoting the next generation of watches very differently. In Germany, they have given each of the watch styles names and have produced a wacky ad that features a talking frog.

“We were offered this ad and we said, ‘thanks but no thanks.’ In the UK, we will not give the watches names and will concentrate our advertising in style magazines such as FHM and The Face. Other territories will do their thing. That’s why this sponsorship is really only suitable for the UK.”

Laonzi says that it is the local revenue, from national satellite and cable channels, like Sky, or the Flextech channels, like UK Living, that MTV is targeting. All of these channels get a bigger UK audience than MTV ranging from 2 million to 1.8 million viewers, according to Independent Television Commission (ITC) figures.

The MTV restructure also has a wary eye on the digital revolution which begins on cable this autumn and rolls out into terrestrial and satellite TV next year. This, eventually, will lead to hundreds of national channels looking for advertising revenue.

Kaz claims the split feed is paying dividends. In the past six months the station has increased its client list by 25 per cent. The total number of clients who advertise with the station now stands at 400 and its UK audience figures stand at 1.7m, according to ITC figures.

The debate about providing opportunities for more localised advertising has been going on for several years. Now MTV has reached the technological level needed, the others have to catch up.