Media Club deploys artificial intelligence to optimise TV campaigns. This enables it to better tailor client campaigns to 25 defined target groups.

An average 14% increase in the cost of TV advertising on Media Club stations for 2023, the introduction of only one basic bundle of stations and its variations for defined target groups or the introduction of artificial intelligence in TV advertising planning are some of Media Club’s innovations in TV advertising for next year. However, Media Club’s new business policy is generally based on this year’s one. After implementing eGRPs in 2022, its next goal is to incorporate eGRPs into all campaigns for younger target groups. It also goes on adjusting TV ad pricing and continues its efforts to increase its inventory capacity. By raising the floor and adding an additional tier for a discount for investing in additional media, Media Club wants to motivate clients to provide higher guarantees in this respect (sponsorship, product placement, online, HbbTV, print). We spoke to Ladislav Dianiška, director of Media Club’s TV division, about some of the details of the new business policy.

For the next year, Media Club’s business policy includes only one bundle of represented stations instead of the two used previously. Why the reduction?

Above all, we wanted to simplify and clarify the offer for our clients. That is why we are introducing only one Media Club bundle. By introducing the ability to customise the distribution of individual channels for up to 25 target groups, we can see no point in having additional bundles.

As before, there are 25 target groups defined by Media Club. Can clients choose one or more groups to target in their campaigns within this offer?

Yes, one client can choose up to six target groups because there are clients who have different products for different target groups. With the help of the media agency and our replenishing, we are able to better optimise the clients’ campaigns. We want to start using artificial intelligence for booking in 2023, which we are testing now.

If a client chooses more than one target group, how does it work?

For each target group, we optimised the distribution of individual channels with respect to their affinity, reach and performance. Once the client selects a bundle with a given target group, they get the most optimal distribution possible. Furthermore, this allows us to react to fluctuations in viewership during the campaign and select the most suitable place for the client’s ad spots based on affinity.

Are you going to use AI for all the replenishments you make?

The foreign software we are testing now partially replaces manual work in booking and replenishment and is able to spread campaigns across the available space of individual channels. What matters is how many GRPs each channel is able to generate. For example, an optimal campaign for a young target group could be almost entirely on Prima Cool, but we cannot give such a campaign to everyone due to the capacity of the channel. Therefore, we use AI to find the composition of channels and shows for the client within the overall orders so that it reflects the requirements for the chosen target group as much as possible while not preventing the implementation of the same principle for other clients.

Does the software that uses AI include online inventory in replenishment?

eGRPs are part of the defined Media Club bundle, so online inventory is included. As we have documented, for younger target groups, eGRPs not only help increase campaign affinity but also increase reach.

The share of eGRPs in campaigns is still low, which is also related to inventory supply. You intended to implement eGRPs in the IPTV operators’ offer this autumn. What is the situation now?

At the moment we have agreements with operators Lepší TV and Sledování.tv, which helps us increase the available space for eGRPs. We anticipate that once all operators are engaged, the capacity for eGRPs could double and we could engage eGRPs in all campaigns. In any case, from 2023 onwards we want to introduce eGRPs into every campaign targeting the young target group.

Can the software also distinguish between different times of the day and the level of space utilisation with respect to legal limits? How do you set the time limits for ad placement in off prime-time and prime-time?

The software must be able to respect legal limits while working with the specific needs of clients. The time limits of individual campaigns are based on the specific contractual conditions of the clients, and the software will be able to respect this as well.

The Media Club’s core target group remains 15-69. Are you also counting on the children’s group 4-14, which you have not had in your commercial policy so far?

Of course, we do not want to turn our backs on any client and we are ready to present an offer for those who target this specific target group.

The basic CPP is increasing by 14% on Media Club stations for 2023. Once again, clients with the highest budgets are seeing the highest price increase, at 18% for next year...

We did this for the first time in 2017/2018, when we said that for budgets over CZK 50 million we would not give any discounts. We wanted to stop the policy of endless discounting. In addition, the demand for TV space has been increasing in recent years, so space is sold out, and we need to limit what is sold cheapest and sell the more expensive.

Looking back at this year, the year-on-year increase for clients with the highest budgets was 16%. Did it have the effect you wanted?

 Absolutely, because it freed up some space and allowed us to deliver our clients’ campaigns.

Do you consider a price increase of 14% for next year to be sufficient? Your colleague Jan Čadek announced an 8% increase in respect of Media Club radios, adding that a price increase of 17% would be needed. What about TV?

A 14% increase is an option that the market gives us. Of course, it would be necessary to increase the price more, but this is a compromise that we have reached. Even our main competitor is not increasing the price by a staggering amount (TV Nova is increasing the price of advertising by 12% for 2023, ed.).

 The autumn season has turned into its second half and a substantial part of the year is already behind us. How was this year for Media Club in terms of revenue compared to last year?

2021 was a successful year for our agency both in terms of business and finance. We saw stable demand from clients compared to 2020, which saw a change in consumer behaviour due to the measures against Covid-19. Last year, we achieved a profit before tax of CZK 818 million.

What do you expect from 2023? Do you already have any signals on how the market might develop?

Based on the current state of negotiations and budgets, we are on par with this year’s budgets, with a few exceptions. Overall, we expect a slight decrease next year.