November 6, 2007
- Top Story: Q3: Signs of Life
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Great Ideas
- Launching with Love
- Getting Meetings Scheduled
- Credit Goes Digital
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Briefing Room
- Google Taps Nielsen for Set-Top Ratings Service
- NCC Tallies $3M in Cable Political Revenues
- TV Stations Go Live with Electronic Billing System
- Ad Support Is Key to Success of Hulu Online-Video
Venture
- Chrysler, TBS Sponsorship Transcends the
Traditional
- Tennis Channel Nets New Ad-Sales Rep
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- People
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Q3: Signs of Life
After a flat first half of the year, cable MSOs appear to have rediscovered a formula for modest growth in the local-ad-sales business.
Quarterly earnings reports for the July-September period should show mid-single-digit growth year-over-year for local-ad-sales revenues, according to public filings and comments made by ad-sales executives in advance of earnings releases.
Industry bellwether Comcast, which represents roughly one-half of local-ad-sales revenues reported by the six largest publicly held U.S. cable companies, reported that its ad-sales revenue grew by 6.5% in Q3 after falling by 1.8% through the first six months of the year.
Insight Communications, which reported Q3 results Nov. 5, said its ad-sales revenues rose 5.5% for the latest quarter.
Cable One, whose parent, Washington Post, doesn’t break down cable-advertising revenue, recorded “a good third quarter,” with growth in a similar mid-single-digit range, vice president of advertising Mike Bowker said.
Even so, ad-sales growth appears to be lagging overall revenue gains at large MSOs, which are fueled increasingly by acceleration in revenue-generating units across telephone and digital-video subscription categories. Comcast’s overall cable revenue rose 11%, for instance, vs. the 6.5% hike in advertising.
The scales could tip as large MSOs Charter Communications and Time Warner Cable report Q3 earnings early in November, but it appears that the trend generally is toward a welcome return to rising revenues fueled in part by the beginnings of some political advertising tied to state governor’s races and presidential primary spending.
National Cable Communications, the MSO-owned national ad-rep firm, recorded $3 million in political ad sales through late October, according to senior VP Andrew Capone.
Still, comments from Comcast’s Q3 earnings statement caution that the ad-sales increase doesn’t signal a return to glory. Comcast noted that its Q3 year-over-year advertising-revenue gains were driven mainly by the calendar: An extra broadcast week fell into the latest Q3 period vs. that of 2006. Through the first nine months of 2007, Comcast noted, “advertising revenue increased 1% to $1.1 billion, reflecting continued weakness across the television-advertising market and a decline in political advertising.” Comcast reported political-advertising revenue of more than $90 million in the 2006 election year.
MSOs have been challenged in 2007 by the political-spending downturn, plus a home-mortgage crisis that has dampened spending from the retail home-improvement category. Said Mediacom Communications group VP Steve Litwer: “Everybody’s doing the best they can in a difficult environment.”
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Attaining Wedded Bliss, Getting Meetings Booked and Accelerating Credit Approval
Theme It Out: Sticking to a signature theme from a popular cable program can help to leave a memorable impression and attract interest among local advertisers in new channel launches. That’s one lesson learned from an Oct. 17 launch event Cox Media of New Orleans presented in association with Rainbow Media. To introduce Rainbow’s WE network to the New Orleans media community, Cox invited advertisers to a mock “wedding” that played off the theme of WE’s “Go Bridal” block on Sunday nights. The betrothing couple in this case was Cox Media and WE, with the bridal party represented (in full formal dress) by various individuals from each company. Held at popular restaurant Muriel’s, the event helped Cox Media to
secure four new sponsors from the entertainment and restaurant categories, including Muriel’s and a local limousine company.
Get the Appointment: AEs who are contacting prospects for the first time over the phone should keep in mind that the purpose of a cold-call is to secure an appointment, not close a deal. So advices Janek Performance Group, which trains sales organizations in selling techniques. Among tips for getting the meeting: Have a concrete proposal that entices prospects and makes it difficult to say “no.” Researching prospects in advance is a must, Janek says. Some suggested dialogue: “I’ve been looking over your print ads, and I would like to show you examples of what some changes in layout and graphics could do to make your ads stand out more.” Janek says those types of pitches take more preparation but pay off in higher odds of
getting appointments booked. For more: www.janek.com
Save Processing Time: Time spent ensuring that new-to-cable clients are good credit risks can sometimes interfere with getting campaigns on the air -- and may lead prospects to advertise elsewhere. Time Warner Cable Media Sales’ Southwest division introduced one way to shorten the back-room evaluation time by posting a downloadable copy of its credit application on the company’s client Web site, along with traffic instructions and tape specifications. The approach means that new clients can grab, fill out and return the application quickly, without even picking up the phone.
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The Cabletelevision Advertising Bureau confirmed the departure of former vice president of sales and marketing Dave Leitner, who had been working to devise industry-accepted approaches for displaying and describing advanced advertising technologies and methodologies. Leitner had been working with MSOs, program networks and the Cable & Telecommunications Association for Marketing to produce documentation surrounding advanced advertising initiatives and ways to familiarize media buyers with new cable-advertising technologies. A CAB spokesperson declined to comment on Leitner’s exit or whether the trade association would name a successor. In an e-mail message sent to colleagues, Leitner said he was “sad to be leaving, but happy for the opportunity” to
return to MediaVest, where he will work on media planning and consumer research for MediaVest’s Avon account. Before joining the CAB in January 2006, Leitner had worked for MediaVest on consumer-electronics accounts.
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Targeting On-Demand Ad Decisions
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Dean Denhart
President and CEO
BlackArrow |
There’s a new ecosystem emerging around on-demand advertising, and Dean Denhart wants in. Fresh off a $12 million fund-raising that attracted investors including Cisco Systems and Comcast Interactive Capital, the former SBC Communications and PacBell executive hopes to help cable operators execute a flurry of on-the-spot decisions that will align targeted commercials with on-demand TV viewers.
Q: What’s a former telco guy doing building an advanced advertising company?
A: There are some interesting synergies between the telecommunications and the cable worlds in many ways. There are parallels in the experience of putting DSL [digital subscriber line] into the phone infrastructure years ago. The telephone companies had to fundamentally change how they ran their business, and how to provision, install and maintain it. When you think about putting in dynamic video ad management, you’ve also got to go through a technology evolution and a set of prescribed steps. So I think there’s an interesting parallel.
Q: What leads you and your investors to believe there’s an interesting opportunity emerging for what BlackArrow does?
A: I think that if you look at where the viewing trends are going, in terms of linear television versus nontraditional or viewer-controlled viewing, what you’re seeing is a growth in both the broadband side and the time-shifted or VOD [video-on-demand] television side. But in the 6 billion hours of projected viewing on broadband (Internet), less than 10% of that is expected to be higher-quality, longer-form content. Then look at the 8 billion projected VOD viewing hours: That’s a huge opportunity to do a much better job at dynamic targeted advertising. So we’re going to where we think the opportunity is.
Q: Do you compete with incumbent VOD-server manufacturers, or complement them, or both?
A: It’s truly a complementary solution. We are an ad-management, ad-decision and ad-targeting company. We partner with the likes of Cisco, SeaChange [International], RGB, BigBand [Networks] and others. What we offer is the ability to have an ad-management solution across this platform. So a programmer can provide an advertising package to General Motors or Procter &Gamble and target a specific consumer type regardless of playout solution.
Q: When will you be in deployment or trial?
A: Everybody’s under a nondisclosure agreement with everything. We do have our first customer going live this week, although we can’t disclose them yet. Publicly, we’ve been out there with Cisco, SeaChange, RGB and BigBand, and our investors include Comcast. We have a pretty good relationship with the MSOs and the vast majority of the technology companies.
Q: What are the business factors beyond technology needed to fuel the onset of on-demand dynamic insertion?
A: Great question. The heart of the challenge is taking a programmer that’s used to selling advertising in a traditional way. What you’ve really got to do is take the relationship-based part of your business and the CPM [cost per thousand homes] part and create a whole new way of selling to advertisers. You’ve got to sell in a targeted way; but the ability to have rate cards and sell to a more targeted solution is brand-new. Do you sell a three-second or 15-second pre-roll? On VOD, you’re only going have three to seven minutes per hour. So how do you create a business model or a revenue split model? A transformation of the business has to occur at the same time.
Q: What interests you personally about this category?
A: I’ve been a buyer of technology almost my whole life. Here, we have the ability to build something from the ground up that’s focused on a brand-new opportunity. We’re not retrofitting a legacy system. This is green-field, it’s all new. It’s never been done before. The ability to solve this multiplatform thing is very daunting. I think we have a pretty good shot at that. "
--Interviewed by Stewart Schley
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Nielsen to Record, Report Granular Viewing Data for Google, EchoStar
(Excerpted from an article in the Oct. 29 issue of Multichannel News)
Nielsen Media Research will be providing Google with demographic information on exactly who is watching the TV advertising the online giant is selling for EchoStar Communications, officials said last week.
For More…NCC Political Ad Sales Top $3M, Mainly from Primary Campaigns
(Excerpted from an article in the Oct. 22 issue of Multichannel News)
National Cable Communications, which handles ad sales for Cox Communications, Comcast and Time Warner Cable, said it has booked $3 million so far in political ads. That figure represents a “significant early purchase” in the primary season, according to Andrew Capone, NCC’s senior vice president, business development and marketing.
For More…TV Broadcasters Go Live with Computerized Spot-Administration System
(Excerpted from an article in the Oct. 29 issue of Broadcasting & Cable)
The first phase of ePort, the Television Bureau of Advertising’s computerized system for ordering, processing and invoicing TV spots, will go live as a handful of ad agencies begin ordering spots electronically instead of using the long-established model of sending faxes to stations and having staffers manually rekey the data.
For More…NBC, Fox Online Video Venture Depends on Advertiser Support
(Excerpted from an article in the Oct. 29 issue of Multichannel News)
Cisco Systems, Intel, General Motors and Toyota are among initial advertisers on Hulu, the high-profile online-video portal launched by a venture of NBC Universal and News Corp.
For More…Chrysler’s TBS Sponsorship Reflects New Multiplatform Focus
(Excerpted from an Oct. 30 article on Multichannel.com)
A new Chrysler sponsorship package on TBS, centered on sitcom Tyler Perry’s House of Payne, spans a variety of messaging vehicles including product integration plus advertising via TBS’ wireless-application-protocol service, TBS mobi. The package also features a tune-in shot with the show’s cast and the 2008 version of Chrysler’s Town & Country minivan that will air five times on TBS during the show’s 9 p.m.-10 p.m. Wednesday window from Oct. 31-Nov. 21.
For More…Sony Unit to Rep Tennis Channel Ad Inventory
(Excerpted from an Oct. 30 article on Multichannel.com)
Tennis Channel, a 24-hour sports and lifestyle service, named Sony Pictures Television as its exclusive ad sales representative for national inventory and direct-response messaging.
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The New York Times quotes advertising executives who say it’s likely that Google can convince cable MSOs to sign up for Google’s nascent-but-growing TV-ad representation business.
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The Boston Business Journal cites a new Forrester Research report projecting that interactive marketing will come to represent 18% of all advertising, up from the current 8%, decreasing the percentage spent on traditional advertising.
For More…
The Wall Street Journal (subscription) points out how many viewers are shunning TV commercials on major over-the-air network shows with the help of digital-video recorders. New Nielsen reports estimate the size of the lost audience.
For More…
Variety reports on Rentrak’s efforts to crack open Nielsen’s dominance in TV ratings by gleaning viewing information from roughly 500,000 digital-cable set-top boxes.
For More…
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Comcast Network Advertising Sales named Sara Kaliski vice president, online advertising sales. She had been director. .
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