Consolidation hits ad reps, too

Ten years ago, when the advertising rep-firm business began to consolidate, there was a lot of concern among TV stations about possible conflicts arising when two co-owned reps served multiple stations in the same market. The worst fear: that billing and programming information might be inappropriately shared with competing stations.

The response by the rep firm consolidators-Cox (Telerep, MMT and HRP), Petry Media (Petry and Blair) and Katz Media (Millennium, Eagle and Katz Television)-was to ensure that church-and-state-like separations were maintained between their co-owned but vigorously competitive rep subsidiaries. By and large, station clients accepted those responses.

Over time, however, those Chinese Walls have eroded. It started with back-office functions, such as accounting and human resources. More recently, there has been some consolidation among co-owned programming departments. But last week, Petry Media executives confirm, consolidation has gone a step further, with the complete merging of the programming departments of Blair Television and Petry Television to service the needs of the 200-plus station clients.

Garnett Losak, who had been in charge of Blair's programming department, will now oversee the merged Petry-Blair programming department. Her counterpart at Petry was Dick Kurlander, who resigned last summer after 15 years with the firm.

The reason for the continuing consolidation, as usual, has to do with the bottom line. TV station groups nationwide have consolidated, and the bigger groups have forced the reps to lower their commission rates or even go into partnership with them.

According to rep and station sources, commission rates for national spot advertising, which a decade ago were typically 15%, are now less than 10% and, for some larger groups, as low as 6%.

Some groups have even demanded a piece of the action. FOX, for example, has formed a partnership with Petry. The Post-Newsweek stations formed a co-venture with Cox's MMT.

At Petry-Blair, Losak argues that the merged programming department will actually provide better service to stations while being more economically efficient. In effect, she says, four heads are better than two. That is, four programming executives who directly consult TV stations can now jointly dissect programming trends and exchange ideas on what the trends mean.

"What Petry has done has put the emphasis on the people talking to TV stations," she says. "There's been no reduction there." One program-analyst position has been eliminated. And now, instead of receiving separate sets of largely redundant weekly programming information, Blair and Petry clients will receive a single set.

In cases where multiple stations are served in the same market, different executives consult each station. And the Chinese Wall still exists with regard to proprietary local program information, Losak insists.

Other reps agree. "At one point, it probably made sense that everything was totally separate," says Katz Television Vice President, Programming, Bill Carroll, who oversees the programming departments at the three Katz-owned rep subsidiaries. "But now there are huge amounts of information, and it has to be distilled, and it makes more sense to do that in a more centralized fashion.

"But, once you've done that, you're talking about how you interpret that information, and that's where the individuals and their skill and their working relationship with the station and knowledge of the market come into play. That's the part of the process that remains separate."

Stations also seem less concerned now that dual representation has been a fact of life in many markets for a number of years.

"I don't think it's an issue. People handle it professionally, and I've not experienced a problem," says Don Loy, operations manager at WROC-TV, one of three Rochester, N.Y.-market stations represented by Petry or co-owned Blair.

One high-level station-group executive said the reps have to make such moves in order to survive. "It's a tough low-margin business, but I trust my rep. It's a critical business that won't go away."