The idea for re-visiting the methodology used to pay talent surfaced circa 2005. With an ever-increasing drive to tease out ROI, marketers realized that talent residual payments were unrelated to marketing outcomes. The Collective Bargaining Agreement between the industry (JPC) and the unions (SAG and AFTRA at the time) required the same payment to an actor appearing in a commercial regardless of the number of viewers exposed to that commercial. In other words, union actors receive the same residual payment for appearing in a commercial that airs during the Super Bowl with 100 million viewers as they do for a commercial that airing the next morning on The Today Show with 2 million viewers. Recognizing such disparity, marketers sought to effect change that would align residuals with viewers and media costs.
Yet to effectuate such change, both sides of the collective bargaining table—that is, the JPC and the union—needed to be willing to consider it. Eventually, agreement was reached predicated on a goal of achieving an outcome that would result in virtually no change in the total amount exchanged between the ad industry and union talent. In the aggregate, the industry would pay no more and the actors would receive no less. It was understood of course, that some marketers would pay more and some less and some actors would earn more and some less.
But to ensure this proposed change would be successful—considering the constraint of maintaining the aggregate payment amount—an RFP was issued to identify an experienced, credible third party to conduct such a project. PwC was engaged and embarked on creating the ‘Engine’ that would maintain the aggregated talent payments while changing the foundational methodology from Uses (talent is paid the same amount each time a commercial airs) to GRP’s (talent is paid a varying amount while appearing in the same commercial based upon the number of viewers of that commercial). Once completed, a 12 month real-time test was instituted to prove the efficacy of the methodology and the Engine. Indeed, the test showed that a GRP methodology could be implemented with virtually no change in aggregate residual payments. Success . . . almost.
With an even tighter relationship to media buys and plans, the most recent element impacting the potential transition is digital media. Virtually non-existent at the onset of this project, digital video has become mainstream and must be considered in the context of views, GRP’s and residual payments. Gathering more data on this front and developing a strategy moving forward has resulted in a temporary ‘pause’ in the GRP-E project. That said, we fully expect this to move forward in the next 3-6 months.