by Dave Zornow
CSP Magazine, June 2002
Twenty years ago, ad-supported cable was the new kid on the block. As distribution and ratings increased, the industry frequently marked its progress with glowing reports of an increased total cable share in comparison to a slipping broadcast share. In the early years, it was an eye opener that an aggregate cable number could compete with broadcast’s total share.
But times have changed and no one in the media business or the trade press is impressed anymore. Seasoned media buyers have heard this story hundreds of times. Younger buyers grew up watching TV during the 80’s and 90’s and instinctively know what brands like Nickelodeon, Cartoon Network Discovery, ESPN and MTV represent.
Cable needs a new story. The old broadcast enemy has been vanquished – or in some cases, is as much of a cable stakeholder as any of the original founding fathers of cable. A good place to start is by redefining the competition. “One of the first rules successful businesses ask is: How does my customer see me?” says Josh Chasin, President of Warp Speed Marketing, a strategic planning and research media consultancy. “If I look at cable through the eyes of my nine year old nephew, or through the president of P&G, they both see it as television.” Chasin says the industry has to move past the broadcast vs. cable mentality. “Distribution differences that mattered at the dawn of the medium are often irrelevant. Don’t sell against broadcast – team up with the TVB and package with local TV stations to show how the targetability of cable combined with the lower spot TV CPMs can increase advertiser ROI.”
One of ad supported cable’s first stories was its ability to efficiently target with little waste. But the small audiences and high spot cable costs per point made it a tough sell in the early years. With each year seeing only a handful of new network shows getting renewed and more mass appeal, low-brow programming (Millionaire, Survivor, etc) filling the airwaves this may be a good time to review and renew cable’s quality demos story. “The number of cable networks keeps increasing as the share of audience for any single network becomes more marginalized,” says Rob Rose, a former cable and ad agency marketing manager. ”As an advertiser, the real story is how well I can target audiences in aggregate. Show me how cable can do that better than any other media.”
Rose, now vice president, sales & marketing at the Internet company CrownPeak Technologies suggests that cable can also steal back selling points from the Internet that the Web originally stole from cable. Advertisers assume they are reaching committed and interested consumers when they place ads on sites where the site content closely matches the target audience for the advertising which is a variation on the cable’s “environment” selling angle. Gary Lico, president and CEO of leading independent program supplier CABLEready, says cable can cater to niches to deliver sizable audiences which support the channel’s brand. “We make FORENSIC FILES for Court TV, eschewing unnecessary ugliness and including more Court TV-specific legal elements. When Fox did forensics for broadcast, they felt they had to be more gratuitous (in terms of violence) and less informative,” says Lico.
Nationally, cable’s ability to deliver quality an audience in a content related environment doesn’t necessarily translate into higher CPMs. Broadcast CPMs are usually higher than cable costs per thousand. The original rationale that cable’s limited distribution justified a markdown has now mostly disappeared. Today the gap is explained by broadcast reach arguments, supply and demand, client perceptions or an ad agency’s reluctance to pay more for what they now get for less. In theory, cable’s targeted no-waste CPMs in a related environment should command a premium. But even with the increases in distribution and the emphasis on original and quality programming there’s still a big gap.
If distribution is no longer a differentiation, what can cable do to distinguish itself from the competition? Adelphia’s Western Region VP Media Services Mike Wilczynski says cable can use its local advantage to get closer to both advertisers and consumers while promoting worthy causes. Adelphia has started a program in Southern California and Colorado Springs where advertisers and their AE’s produce and air spots promoting their favorite local charities. A similar set of testimonials were also produced with Adelphia employees who talked about their work in the community and some of their favorite causes. “This is helping to solidify relationships and building new links between our viewers, our advertisers and Adelphia.” Wilczynski says that especially since 9-11, people have wanted to give something back to the community but struggled with ways they can do this. The Adelphia program is a win-win-win for consumers, cable and advertisers while improving employee morale and demonstrating the unique local strengths of the medium. ##
Dave Zornow is President/TNG Research, a media research consultancy and applications development company that works with media sellers and research providers.
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