With broadcast ratings dropping and stalwarts such as Friends coming to an end, MSOs are exploring new ways to grab a bigger slice of the $28 million spot TV pie. A year of strong cable network ratings, combined with under-performing network fare and the imminent demise of broadcast staples like Friends, has led cable networks and MSOs to hope this year is the one in which they will finally start to close the broadcast ad gap. As evidence of cable’s optimism for the coming spring, Comcast is rebranding its ad-sales division and rolling out a marketing campaign to educate media buyers, advertisers and agencies about the power of cable, as they mull over where to spend their ad dollars in the $28 billion spot television marketplace in 2004. Comcast Advertising Sales’ new name-Comcast Spotlight-is directly aimed at capturing broadcast ad dollars and meeting the company’s goal of boosting its ad revenue to $2 billion by 2007. The plan, which starts rolling out this month, will highlight the MSO’s interconnects with other cable operators in 55 of its 72 markets-more than half of which were established last year in the post-AT&T Broadband transition-giving it an unmatched and unified ad sales strength from the national to local market level. Ad spending increased 6.7% last year and is expected to increase 7.8% this year to $138.4 billion, according to the latest TNS Media Intelligence/CMR numbers. The upcoming U.S. elections and the summer Olympic Games in Athens should boost ad spending as the economy continues to pick up. Spanish-language television is expected to grow 15.7%, online is expected to go up 12.1% and spot TV 10.8%. Comcast’s rebranding, led by ad sales president Charlie Thurston and executed with agency Tucker Hampel Stefanides & Partners, should help make the top cable operator’s scale and scope pay off as it sharpens its sights on the growing pool of spot TV dollars. Its message (including placing outdoor ads near key agencies in New York) is that cable is the more savvy choice and that it offers advertisers state-of-the-art, integrated marketing plus segmentation products in the top 10 DMAs (with more on tap). "As cable continues to surpass broadcast in viewership, and the number of interconnects making cable as easy to buy as broadcast continues to grow, more advertisers are turning to cable," Thurston says. "Additionally, cutting-edge technologies and new advertising applications only offered by cable make it a valuable alternative to broadcast." Besides clustering demographic ratings across a consistent offering of 40 networks, Comcast also is offering advertisers the opportunity to get in on cutting-edge nonlinear TV advertising via VOD, which is now available to nearly half its subscribers. While Comcast’s marketing muscle and 2004 campaign could-and should-help narrow the gap between broadcast and cable advertising, its focus is concentrated on the annual spot advertising upfront that starts in late summer-not on the national television advertising dogfight that is waged during the upfront selling season each spring. "The agency community and some clients are very interested in using us as leverage against their network buys," says Vicki Lins, VP of marketing and communications for Comcast’s ad sales unit. "That’s not our business, it’s not our business model and we don’t want to be confused with that. Also, our network partners have expressed concern to us that they’re afraid we’re going to compete with them for network cable dollars, and we’re not… When we talk about the upfront selling season, it’s August through October when we try to lock down annual commitments." Comcast Ad Sales’ new identity-which not only plays up spot cable but puts cable, advertisers and their targets in the spotlight-comes out of a yearlong process of assessing Comcast’s ad-related brands, such as Marketlink, at the interconnected regional level. "We recognized the importance of rolling all three levels of our business-local, regional and national-under one unified brand to represent the new size and scope of our business," says Lins. "This truly represents the strength of our business: our ability to localize and customize and go deep into any spot market. "Spot cable has a messy history, and we learned from our research that the agency community is very tainted. We as an industry have made a lot of promises over the last decade that we have not delivered on, and their expectations have been lowered as a result of this." Cable’s biggest letdown to advertisers in the past? "The promise of one-stop shopping," says Lins. "We’ve spent years and years talking about being easier to buy, when in reality we weren’t. Until the past couple of years with the NCC initiatives [eBusiness Data Services, AdCopy and AdTag] and our interconnect growth, we really didn’t deliver on that promise to them. We recognize that the size and scope of the new Comcast enables us to lead the industry forward quickly." Smaller Ops Think Big While Comcast wants to set the benchmark for how cable advertising is bought and sold, it isn’t the only operator working hard to awaken advertisers to the value
of cable. Insight, for instance, is happy to take away ad dollars from broadcast and other media through its interconnect partnerships, but it also is focused on strengthening and boosting ad sales at the local level. "To close the gap between broadcast and cable, Insight is focusing on selling fixed programming instead of daypart rotations," says Kevin Dowell, VP of Insight Media Advertising. "This strategy will also support the addition of our new promotions department that will bring value-added opportunities to advertisers that tie in with widely recognized cable programming and brands." Charter also has been busy doing its part to narrow the gap. It plans to complete the consolidation of its DMAs under one contact this year. "We have been leaders in this space, along with Comcast, to pull all systems in DMAs together for national spot advertisers," says Jim Heneghan, SVP of ad sales for Charter. Heneghan and his team are also focusing on key accounts, getting their top advertisers in each market to invest more of their marketing budgets in cable "by means of more fixed position, more networks against their
audiences and tailored promotions," he says. "These ‘keys’ are usually broadcast buyers, so with added focus we’ll get more share of their budgets." As with all operators, Charter’s strategy for moving the needle in cable’s favor is through increased training. "We take a back seat to no one in our investment in line sales associates, [and] we are focusing on manager training in particular in 2004," he says. "This means increased attention to recruitment, coaching and client contact. Better management relationships with clients lead to greater share of budgets." Smelling the Coffee Media buyers such as Larry Novenstern, SVP and director
of national broadcast buying at Interpublic Group’s Deutsch,
predict that this spring’s upfront could see a radical overturn of broadcasters’ dominance in the ad market, which TNS/CMR pegs as growing 9.6% for network TV and 8.3% for cable networks. "I’m an advocate of getting my clients the best deals possible," says Novenstern. "Each of my clients has very specific business requirements, and the current model tends to work some of the time for some of them. My biggest concern is supply and demand. Since eyeballs are moving away from broadcast, I have no problem recommending more cable, especially if it eases the demand for broadcast. Cable ratings in some cases are higher than broadcast." Analysts such as Shari Anne Brill, VP, director of programming for Carat USA, don’t expect the viewership gap between network and cable to significantly narrow in the near future. "Right now there’s roughly a 7-point gap, and I would say the gap will continue to exist," she feels. "Maybe it will go down to 5, but there will still be a gap because cable networks are programming a lot better, targeting their viewers a lot better than the networks are. In terms of ratings and performance, the reason the higher premium is placed on the broadcast CPMs is because, one, there’s less supply so there’s more demand to be there; more original programs; and a lot of things on cable are repeats. Maybe there’s a handful of really signature programming on cable, but it doesn’t carry over to the rest of their programming." Media analyst Jack Myers sees parity in pricing for broadcast and cable programming happening at opposite ends of the scale. "The pricing gap between broadcast and cable is closing for select programming-most prominently, sports and kids content, and it is also closing for selected prime-time cable series that achieve high ratings and cult status, like Trading Spaces and Monk," he says. "The price for these special cable series is comparable to the lower-tier network TV programs. So there is parity at the high end of cable prime time and the low end of broadcast prime time." But, he points out, "cable is not sold on the basis of prime time exclusively, so packages that include all cable dayparts are obviously priced on a different basis. "On an overall basis, the gap between broadcast and cable will continue to spread further apart, as broadcast ratings continue to erode, reducing supply as demand increases. Cable inventory is growing, thanks to more networks, larger distribution, and higher ratings. So pricing adjusts either downward or is stable, except for networks that can establish unique brand value. As networks and advertisers embrace new measurement tools based on effectiveness, cable and broadcast pricing parity will become a reality."

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