All Quiet on the Digital Channel Advertising Front

Andrea Figler Silence. Flat-out silence. That’s what I kept running into when trying to get cable operators to talk about how they sell — or plan to sell — advertising on digital channels. Since digital is cable’s future, I figure it’s a pretty important topic. Cox Communications, the operator with the most experience on this front, took a pass last week. “It’s too early for us to talk about this,” a company spokesman said. Cox has nine markets with digital ads — a few of which have been running for nine months or more. Time is relative, I guess. Adlink also refused to share its pitch strategy. The second-largest interconnect announced digital ad insertion last year. Nor would Time Warner Cable discuss how local account executives in Milwaukee have been selling digital airtime for the past six months. Even though TWC plans to launch digital ads in New York, Houston and San Antonio this year. This reluctance to share may, in fact, shed light on what digital ads mean to local account execs. Digital ads create challenges similar to those faced at the dawn of cable advertising. For one thing, digital subscribers are small in number right now, making ad prices almost as cheap as basic analog cable was 20 years ago. Digital ads also increase inventory, which can water down the perceived value for cable ads as a whole. But local account execs must fight against these perceptions, says Paul Woidke, VP of technology for Comcast advertising sales. One of the few ad sales executives brave enough to talk about selling digital, Woidke says that account execs must convince advertisers that digital cable targets savory consumers. Digital cable subscribers tend to have higher incomes and more discretionary spending money, he explains. A few years ago, Woidke helped launch digital ad insertion on a Media One cable system in Los Angeles. But since the system launched digital ads only because it wanted to have a digital basic cable package similar to its analog platform to compete with satellite providers, the sales pitch for digital was irrelevant, he says. It was the same analog ads transferred to digital. This tactic, actually, may be the way to go. Perhaps local account execs should sell digital ads the same way they would sell an analog spot. Sponsorships, however, present a unique opportunity to sell digital cable. An operator can give one company about one-tenth or one-twentieth of a particular niche channel exclusively in exchange for the value of that air space. While Woidke applauds this idea, one advertising consultant expressed caution. Companies that typically sponsor a show oftentimes expect discounts. Discounts, in turn, devalue the avails, says Wes Hart, president of ad consulting firm Wes Hart & Associates. Other possibilities? Let the cable operators take more than the typical 20% of local avails for their own use. They can promote advanced products such as high-speed Internet service and VOD since digital cable subscribers tend to be more technologically savvy than basic subs. In the end, the pitch to sell digital cable ads still needs to be, well, discussed before it can be perfected. Kevin Barry, VP of local sales and marketing for the Cabletelevision Advertising Bureau, knows this. He plans to hold a panel on this subject at the local ad sales conference in Chicago in May. “We’re back where we were in 1982 in terms of sophistication for our sales effort,” Barry says. “What I mean by that is, this is a brand new product.” Andrea Figler’s local ad sales column appears monthly.