Comcast Spotlight Takes TV Beyond the 30-Second Spot

Cable made history in last year’s annual national advertising upfront marketplace, with ad-supported cable networks closing upfront deals before broadcast networks for the first time. Comcast is looking to force that kind of tectonic shift in the spot television advertising marketplace. In some corners, agencies proved to be willing to listen, shaking off their old notions of spot cable as a paper-ridden pain in the neck. Evidence of this can be found in Comcast Spotlight’s year-end financial results that show a 17% jump in 2004 revenue. Beyond buying spots, some advertisers tapped into the division’s cutting-edge targeting tools—showing Madison Avenue how Comcast can help it embrace, understand and profit from technology. With the 30-second commercial under assault by ad-zapping technologies, agencies welcome that help in breaking beyond the linear commercial pod, but they don’t necessarily want to be tied to spot cable in order to do so. Comcast’s success with its on-demand platform has resonated on Madison Avenue, where even the biggest skeptics of spot cable are taking a second look, thanks to the nascent VOD ad market. Fallon Worldwide president Rob White, a spot cable cynic, says he is "totally keen" on on-demand advertising, which Spotlight has been pioneering through the long-form showcases it launched last year with General Motors and others. "What is prime time?" the expat Scot rhetorically asks. "There is no prime time, it’s all going to on demand, on some level. All the metric companies are scrambling right now—the Nielsens of this world—because we’re in this brave new world and there’s no metrics for anything right now." With aggressive growth targets to hit, Spotlight is baking VOD ads (for which it generated $19 million in revenue last year) into integrated campaigns. The ads will run along the lines of last year’s Old Spice Red Zone launch with Procter & Gamble. That multi-market, multi-platform initiative in select Comcast markets combined on-air spots, online ads, on-demand ads and on-site local market events to convince males 18 to 34 to reach for P&G’s new body wash. The result: 80,000 sweepstakes entries, 8 million visits to OldSpice.com and a breakthrough campaign that has been nominated for a 2005 Reggie Award by the Promotional Marketing Association. "We’ve got a great ability to reach consumers on behalf of marketers across multiple platforms and in effect reach them in different activities," says Warren Schlichting, VP, new business strategy, for Spotlight. "Watching linear television is much different than watching time-shifted television, which is different than the `lean forward’ Internet experience. We feel like we’ve got a nice triangle: linear, VOD—meaning ITV/on demand—and the Internet." Spotlight’s Ad Bundles All of Spotlight’s VOD ad buys are linked to linear spot buys—for now. However, Comcast Spotlight president Charlie Thurston’s team is in "the early stages" of exploring alternatives that would make it more attractive for network advertisers to build on-demand showcases. More flexibility is good news to Madison Avenue influentials like Bob Flood, EVP and director of national electronic media at Optimedia, who says he is eager to bring more of his clients into the VOD ad space but doesn’t want to be tied to spot cable buys. "The cable MSOs don’t really have their act together, and what they’re trying to do is pressure advertisers to buy a spot package and then they’ll give you access to VOD [and] new technology tools," he says. "I would prefer just to get in that space and deal with the tools, and if there’s a reason why I should buy a spot-based plan…then do that. "I’m considering going to the cable networks directly and saying, `insert my commercial when you do your deal with the cable MSO,’ so it’s embedded as part of the deal," he continues. As a participant in Cox’s Free-Zone VOD launch, Mitch Oscar, EVP of Carat Digital, doesn’t mind a spot cable entr�e to VOD advertising. The question for him is whether a 30-second spot is worth as much as two or three minutes—or perhaps more—of video on demand. "All operators are tying VOD advertising to spot cable," he says. "They’re deploying all this technology…to generate more income. They’re only at about $5.4 billion of the $60 billion [annual] in television spending. They feel that offering VOD makes their business more attractive." Oscar’s clients are looking into whether buying cable spots will help drive tune-in for their VOD messages. "We know that cable operators are their own worst enemies in terms of marketing," Oscar says. "If we could run a VOD spot and not have to buy any spot cable—let’s say they said, `All right, you want a fixed fee. Pay us $10,000 and we’ll put you up there’—well nobody will know it’s there." Spots that direct linear viewers to the on-demand platform help both advertisers and MSOs by driving traffic to advertisers’ products and by serving as a promotional device for VOD, Oscar adds. That’s a point Thurston delivers to ad buyers who complain about tying spot cable with VOD buys. "We now would like to be the host in taking [advertisers] into that new world of technology, where you can stretch a 30-second ad into a five-minute video, [and] have a 30-second ad push a consumer to an Internet site where they can shop for a product," he says. Audience Segmentation Tools Comcast Spotlight started rolling out Adtag and Adcopy, its audience segmentation tools licensed from the Los Angeles interconnect Adlink (which Comcast co-owns), in its top interconnect markets last year. The tools, which enable tech-savvy advertisers to customize spots at the sub-DMA level, are another tech-savvy way in which Spotlight is reaching out to Madison Avenue. One of the MSO’s biggest campaigns using that technology was with United Airlines, which introduced its low-cost carrier Ted in Comcast’s Chicago market with customized ads that identified neighborhoods by name. "You’re able to color code and divide a traditional television market. Up until Adtag and Adcopy it was a one-flavor-fits-all approach," Thurston says. "Now we can really cater to the particular consumer patterns within those neighborhoods." Expanding the availability of Adtag and Adcopy beyond its Spotlight launch markets of Chicago and Detroit was "one of the most important initiatives that we rolled out in 2004," says Thurston. Adtag and Adcopy—developed with technology that Adlink licensed from New York-based media service company Visible World—are installed in 28 Comcast markets (covering 20 of the top 25 markets); it will reach the remaining markets by mid-2005. "It’s what we needed to do to get national spot advertisers to use this on a multiple market basis," Thurston says. "[We’re also] able to use [Adtag and Adcopy] for regional advertisers and individual DMAs." Adtag and Adcopy generated $12 million in revenue for Spotlight last year. Adtag inserts different tags—to identify a local car dealership, for instance, or the dates of a market-specific promotion at the end of a spot—at various head-ends within a zone or across a market. Adcopy goes a step further by sending completely different spots based on consumption patterns or other factors critical to the advertiser. "We’ve always believed that those products truly are the first step into television targetability beyond programming, to break a marketplace down from a DMA into various segments," says Hank Oster, Spotlight’s SVP and managing director of sales. Fallon Worldwide created the spots for United’s Adtag and Adcopy test in Chicago and is now expanding and refining the campaign. "It’s an example of an emerging technology and of an experiment that was very successful," says Rob Buchner, chief marketing officer for Fallon. "I’m interested in how we might tailor personalized messaging as we target neighborhoods." Fallon’s president says he was more intrigued by what Visible World brings to the table for advertisers than by the spot cable piece of the Ted campaign. "The fact that Comcast calls it `Adtag/Adcopy’ kind of takes you down a path that isn’t very interesting—that works very efficiently for car dealers," says White. "We’re working with Visible World on different markets, not just Chicago. Comcast Spotlight is part of the deal because Visible World doesn’t distribute—Comcast distributes." Thurston knows there are some disbelievers who have yet to embrace spot cable—meaning Spotlight. "We are doing business with the majority of television advertisers now, but there are certainly some categories and some holdouts even in traditional categories," he says. "But if you’re a television advertiser by market or a national spot advertiser, you really need to be buying advertising from spot cable at this point because you’re missing out on 50-plus% of the share and the highest-consuming, most upscale, educated homes." Even spot cable fans can be doing more to take advantage of Comcast’s advanced advertising technologies, according to Thurston. "We’re really looking to tie in [advertisers] from high-end branding with 30-second ads to long form, to getting specific foot traffic into stores and dealers from the array of products that we now offer on a very targeted neighborhood or computer-by-computer basis." Thurston and his team continue to sell advertisers on their audience-fragmentation-busting, ad-skipping-defying and interactive tools. But Spotlight had better move fast with creative alternatives if it’s going to keep agency execs such as Flood from crossing to the dark side of the street. "The Dish Network is a lot more advanced than people are aware of," Flood says of EchoStar’s ITV ad forays. "Competition helps speed things along, and they’re interesting." Spotlight Highlights 2004 Accomplishments Rebranded (in February) to Comcast Spotlight in order to unify under one banner its 55 interconnect markets covering 72 DMAs. Standardized channel lineup of 40 cable networks in its top markets. Reduced clutter by expanding electronic billing (EDI) to major markets. Launched Adtag and Adcopy in Chicago and Detroit; followed with launches in other markets including Philadelphia, Boston, Miami, Atlanta and Dallas. Launched VOD ads including long-form ad showcases, an ad-supported VOD dining guide in Nashville and integrated VOD/spot/online/in-market campaign with Procter & Gamble. Launched local people meters in Spotlight’s top five markets: Los Angeles, New York, Chicago, Boston, San Francisco. Rolled out Vehix.com auto shopping portal. Launched SRC demographic analysis mapping tool for its local, regional and national advertisers. Beefed up QuickClicks.tv portal, which received 12 million hits for an ESPN Boston Red Sox Clubhouse promotion pegged to the World Series. 2005 Plans Complete rollout of Adtag and Adcopy, which are now in 28 Comcast markets. Relaunch ComcastSpotlight.com with local market information. Add Vehix.com to Comcast.net to offer local auto dealers cross-platform buys on spot cable, broadband and VOD. Launch local people meters in markets including Philadelphia, Dallas, Detroit and Atlanta. Test next-generation interactivity, including "telescoping" ads with Comcast Media Center. Convince more advertisers and agencies to think outside the 30-second spot by raising visibility, including a fall ’05 client event in New York. —S.B. Revving Up Ad Sales Comcast Spotlight shone in the MSO’s 2004 year-end and fourth-quarter earnings, as reported last month. "Year-over-year revenue growth was up 17%," says Comcast Spotlight president Charlie Thurston. "Probably an even more important benchmark, our operating cash flow from the Comcast Spotlight division was up 19.2% year over year [at $875 million], and our revenue grew roughly from $1.1 to $1.3 billion year to year." Spotlight "hit a crescendo for 2004," he adds, "with the fourth quarter being the best of our four quarters. We had pretty consistent growth, and ranged from 14% to the 17% growth year to year with each quarter." The big driver in Q4 was political advertising. "2004 was really our first breakthrough year on getting the attention of a lot of political campaigns," Thurston says. "We did about $60 million [gross revenue] in political advertising…We did really well in the gray border states where there was highly contested presidential campaigning going on." —S.B.