Jim Gallagher has his pitch down flat. The Comcast Spotlight VP and general manager in Philadelphia has spent the better part of two years telling his clients that they need to change to keep up with the different ways consumers use media. Gallagher is such a believer in this new media world, particularly the VOD world, that he’s practically giving away VOD ad space to hook future clients. The hitch: Gallagher gives away long-form VOD ads as an incentive to get clients to shift their local ad dollars to cable. So far, an underwhelming number of clients have bought into Gallagher’s vision of VOD as cable’s unique advertising platform. (You can count them on one hand.) However, one client that decided to try it out is a little old company called General Motors. Comcast’s hope is that other advertisers will sample VOD once they learn about GM’s experience with the platform. Last year, Comcast Spotlight, General Motors corporate and Philadelphia area GM dealers launched GM Showcase, a content category featured as part of Comcast’s on-demand service. It consists of new car presentation videos, test-drive segments of various models and in-depth profiles of cars and trucks focusing on equipment and safety features. All Comcast digital customers in Philadelphia can check out GM Showcase. In its first 12 months (February 2004-February 2005), GM Showcase clocked more than 125,000 views. Gallagher estimates GM Showcase averaged more than 10,000 views per month this year. Comcast and GM did not provide details on the number of individuals that have seen GM Showcase or the segments that they viewed. "This gives us a whole different way to reach consumers, giving them information that they couldn’t get before through a 30- or 60-second message," says Kevin Fuelling, GM’s advertising/marketing manager for Philadelphia, Baltimore and Washington, D.C. "The results are promising and the dealer feedback increases every month." Fuelling and his colleagues at GM can’t quantify the impact GM Showcase has had so far on sales of GM cars in Philly, beyond anecdotal reaction from some dealers. Calling VOD "the shiniest tool in our toolbox," Gallagher says GM dealerships have responded well to the VOD play. "Many of the dealers want copies of the videos running on VOD for use in their showrooms. Of course, we provide them." With the number of times Comcast subscribers nationwide view on-demand content rising monthly—the MSO says there were 100 million VOD views in March—Gallagher expects more advertisers to jump in and credits the GM campaign for breaking the ice with ad and media buying agencies. "Not only can they see how they can get a long-form message out to their customers, but they are starting to understand that when a VOD viewer chooses content from one of their clients, they already indicate by that action the interest in that client’s message and product or service." General Motors doesn’t pay Spotlight for GM Showcase to be presented as part of Comcast’s on-demand service. Instead, Spotlight gets a bigger share of the $25 million GM spends on local TV ads in Fuelling’s market. Initially, GM promised to spend $1 million more on Spotlight ads per year, spread across 50 basic and digital channels. In reality, GM has increased its spending by "significantly more" than $1 million a year, Gallagher says, declining to go into specifics. Shifting Market Share With VOD In the winter of 2003, Comcast Spotlight president Charlie Thurston and SVP Hank Oster visited GM executives at their New York regional headquarters to advocate a VOD buy in every market served by Spotlight. Thurston and Oster came with an offer they thought GM execs would find tough to refuse: GM experiments with VOD for free, and Spotlight gets a bigger share of its TV ad budgets. Moreover, the increase would be at least double-digit nationwide—not 15-20% in some markets and 2% elsewhere. "The play was: Wouldn’t you love to be the first advertiser in the nation to take advantage of this thing called VOD?" Gallagher says. "The purpose was to cement our relationship with GM and grow our share of their business." At first, GM execs were skeptical about VOD. "It’s something you have to see," says Fuelling. "You can’t draw it on a piece of paper in a conference room or explain it over coffee in a restaurant." Eventually, their attitude went "from cautious to cautiously optimistic." The second round of negotiations took place in Philadelphia, which is where Fuelling and Gallagher entered the picture. The parties agreed that launching GM Showcase in one market made more sense than launching it nationally. Fuelling was sold on the idea of long-form on-demand content that didn’t come with a price tag (beyond the shift in market share to Spotlight). The trick was to get his Philly dealerships on board. "The main question we had was over how we ensure customers see what we produce," he says. "How do we know this is not a waste of time or resources?" Spotlight responded by sharing data on usage of Comcast’s original VOD content in Philly, and it offered to produce the initial segments at its own expense. Spotlight also promised GM that if it moved more dollars into local basic cable, Spotlight would place every GM ad on a top-rated program, regardless of channel. "The feedback we got from GM was it would be a huge leap of faith to make a deal," Gallagher says. "So we had to do some huge leaps on our part—offer production resources for VOD and guarantee ratings performance on the extra spots which matched the demographics GM wanted." As part of Spotlight’s attempt to help GM get full dealership support, Gallagher began working with Heather Bresky, an agent at LCI, GM’s media buying agency for Philadelphia. At a dealer meeting arranged by Bresky, 70% of the local car dealers voiced their approval of VOD, while 30% remained skeptical. Bresky held a second meeting with the holdouts at Comcast’s headquarters, where the dealers sampled the MSO’s on-demand service. Bresky’s perseverance led to a GM/Spotlight deal in summer 2003, through which Spotlight picked up more than 1,800 30-second spots in the deal’s first year, spread across 40 channels. Bresky arranged the GM time buys on various nets, including placement on MTV’s The Real World: Philadelphia; tournaments on The Golf Channel (for Buick, a major PGA Tour sponsor); and ESPN events. Spotlight produced promos for shows carrying GM spots, and invited viewers to check out GM Showcase by clicking on an icon near the bottom of the screen. "[Bresky] was courageous enough to see the possibility and say it could work," says Gallagher. "She put her neck on the line to get the approval and move the budgets." GM’s On-Demand Showroom When GM Showcase launched in February 2004, Comcast had about 650,000 digital customers, and plenty of General Motors on-demand content to show them. The previous month, Comcast went to the Philadelphia Auto Show and taped a batch of five-minute segments, each covering features of a particular car, and all hosted by former local news anchor Rich Noonan. After the auto show, Comcast added footage provided by GM to each segment that enabled viewers to see how the cars performed under different conditions. "We pre-scripted some ideas, went with some of their ideas and then tweaked the presentations," Fuelling says. "We dug into our pockets to produce this," adds Gallagher, who declined to provide the production costs. "It was not cheap." Comcast’s digital subs in Philly can find GM Showcase with their remote by selecting "Spotlight" on Comcast’s main VOD menu and clicking through to it. Viewers can pick the content they want from a group of categories, with each car model designated with its own category. Last fall GM added segments produced in-house, including previews of the new Pontiac GTO, test-drive recaps and a "Tales of the Road" piece dealing with auto safety. Comcast chipped in with profiles from the 2005 Philadelphia Auto Show, shot in January. GM plans to launch Showcase in other Comcast markets. Boston is a likely site, says Fuelling. "We’ll ride this wave and see where it goes."

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