Back in the mid ’80’s, we presented a pool of commercials we felt were outstanding creative to our Texaco clients. They loved the work. On final approval, their President sat across the table and told me it was the best oil company TV creative in a long time.
He asked me what we would do if they increased their advertising budget -substantially.
“Think about it and get back to me,” he said, “and don’t give tell me just more of the same.”
That’s like waving a red flag in front of a bull. We were inspired. And I had an idea.
We called a meeting with out media department and asked them if they had any recommendations. Briefed, they left to think about options.
The idea I had was in creating a 10 o’clock news update. We thought it would be a dramatic media property, if it could be pulled off. I arranged a meeting with our Media Director to discuss it further.
At first he resisted. He felt that the same money could buy considerably more GRP’s (our measure of audience) if it were spread around. The problem, he thought, with having a property at the same time every evening was that the audience would keep changing and be unpredictable since the shows leading into 10 PM were different every night. That was essentially a media measurement problem. They were thinking of our target audience and whether the lead out or lead in audiences would be mostly our target.
He was right. We could buy more GRPs in a scatter purchase than if the funds were placed all in one place. My argument was that a news update would create more attention from the viewers. That would move our commercials from the background on a sitcom to the foreground of the latest news headline.
I persevered, threw a tantrum, and asked them to at least inquire with the leading network, CTV, whether it would be possible to actually execute and if so, what would it cost.
The network explained that they needed some time to figure it out. The advertising time-slot, it seems, was shared between the affiliate stations and the network. For the network to take or claw back a minute would require considerable negotiation with their separately owned affiliates in the cities across the country.
The network provided programming as a service to the affiliates, but each operated as their own business. It was the opposite to how the US networks operated. In Canada, the network was owned by the stations, not the other way around. As members of the network, each station made available a certain amount of time. The remainder of their time was theirs to sell locally or to national advertisers. Things are always more complicated that they seem.
In addition, we had to do the same for the French side with Réseau de Télévision Quatre-Saisons.
Both networks were had the incentive of incremental billing that was a 52 week buy. They were motivated. Finally, after about a month, they were able to give us a rough estimate of $5+ million dollars for the cost, but that was a rough estimates. Texaco had been spending about that already so we were doubling their budget.
In the negotiation, we arrived at way to share the minute. It would open with a 5 second billboard telling viewers it was a news update presented by Texaco. That was followed by a 25 second commercial. Then 25 seconds of the top stories to be at the 11 o’clock national news. The last five seconds was a closing billboard. The news was a live feed, one in each of the five time zones across Canada. Things are always more complicated that they seem.
We now knew enough of the parameters to present the idea to the President to Texaco. He took all of a minute to think about it. “Sounds great,” he said looking at his watch, “I’ve got another meeting to go to. Let me know when we are on the air.”
The 10 O’Clock Updates were a huge success for Texaco, strongly improving their top of mind awareness. We tracked awareness every month though our existing surveys and could see the progress. Sometimes media weight isn’t the only thing that can drive business; sometimes getting the right media position is worth a lot.
With the news updates we broke through lazy viewing habits by associating ourselves with an attention getting device – the latest news and it changed every day so the attention never wore out.
What we didn’t know was that Texaco Canada was up for sale due to a huge lawsuit loss in the US. On November 19, 1985, Pennzoil won a US$10.53-billion verdict against Texaco, the largest civil verdict in US history up to that date. The court case sprang from Texaco having established a signed contract to buy Getty Oil after Pennzoil entered into an unsigned—yet binding—buyout contract. To help pay for the verdict, Texaco Canada was being sold. It was expected to raise about $3 billion.
Texaco’s President, Peter Bijur, had method to his madness in doubling the advertising spending by $5 or $6 million. The improved awareness increased the sale price of the company to $4.1 billion, about a billion dollars more than expected. It was purchased by Imperial Oil and merged into that company. Other parts that presented competition problems were sold to other regional players like Ultramar.
It was a sad outcome for the many long term friends I had in the company, many whose careers were entirely with Texaco.
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