Adlink has become the first interconnect to break the $100
million barrier in annual ad sales, and its executives can reel off several reasons why.
The Los Angeles interconnect -- executives from which
projected that the figure was attainable this past February -- passed that milestone by
Nov. 10, about one week ahead of schedule. This left it seven weeks to lift that tally by
several million dollars.
Looking at the big picture, Adlink CEO Charlie Thurston
cited four pivotal events in the past five years that led to that achievement.
The first was going digital in 1995, he said, followed in
1996 by the addition of Century Communications Corp. to its MSO participants, which
enabled the interconnect to offer advertisers full coverage of the Los Angeles DMA.
The third factor was the steady expansion of insertable
networks, from 14 in 1997 to 35 now, he said. And the latest pivotal event was starting
its own "Targeted TV" branding campaign last year, he added. Adlink will
continue with variations on Targeted TV.
Ad revenue has climbed from $29 million in 1995 to $83.1
million last year. This year's $100 million-plus put Adlink more than $17 million
ahead of 1998 and lifted its gross revenue per subscriber from $30.50 last year to $37
this year, Thurston disclosed.
Thurston -- who praised the interconnect's MSO
partners for supporting its digital plans as far back as 1993 and for funding its channel
expansions -- said roughly one-third (actually, 33 percent) of its participating
MSOs' inventory is dedicated to Adlink.
Although he declined to compare Adlink's results with
those of other major-market interconnects, Thurston and other executives pointed out that
operators in other DMAs don't allocate that much inventory for interconnect sale.
The New York and Philadelphia interconnects, for instance,
generate sales well into eight figures, but, as New York Interconnect vice president and
general manager Eglon Simons noted, his MSO participants dedicate only 15 percent of
inventory for the interconnect.
Apart from the usual one-stop-shopping appeal of
interconnects, Adlink offers greater flexibility and segmentation with its
"Adtag" and "Adcopy" capabilities. Adtag and Adcopy generated $9
million to $10 million this year, Adlink executive vice president of sales and marketing
Hank Oster said.
Adtag enables Adlink to tag auto spots, for instance, with
dealer names and locations in up to 70 geographic areas of the Los Angeles DMA, while
Adcopy allows Adlink to run different spots -- for example, one for a subcompact car and
another for a sport-utility vehicle -- to reach different geodemographic targets.
Adlink "builds its core sales on the clustering
concept, combining like network brands" that target specific demographic segments,
Oster said. The growth in insertable networks alone has translated into about $8.5 million
so far, he added.
And "marketing is very much part of sales here"
-- fully one-third of its sales -- added vice president of marketing and communications
Vicki Lins. National revenues alone rose 17 percent to $30 million-plus, with marketing
tie-ins accounting for $22 million and promotions for $8 million, Oster pointed out. But
"we don't throw promotion in as just value-added," Lins stressed.
Adlink's biggest single marketing tie-in event this
year was Comedy Central's "L.A. Stand-Up Competition," a talent search that
will now become an annual event, Lins said. The event generated $1 million for Adlink from
Ford Motor Co.'s Lincoln-Mercury division and Taco Bell Corp. Additional sponsorship
layers are likely to be added in 2000, she hinted.
Adlink also sold General Motors Corp.'s Chevrolet unit
on a major integrated marketing program that encompasses a sweepstakes, on-air
sponsorships, vignettes, Adtag/Adcopy and network co-branding opportunities, Lins said.
As one example, Chevy sponsors demographic-specific
vignettes and car models to target prospects in the market's mountain region and in
its beach areas. That partnership is now entering its third year, she noted.
To keep the momentum going, Adlink began a targeted sales
initiative earlier this year, zeroing in on the automotive, political and Internet-related
categories, Oster said. In automotive, Lincoln-Mercury and Chevrolet are among
Adlink's biggest clients.
The interconnect has also scored successes in breaking new
spot-cable clients, ranging from Sears, Roebuck & Co., Kellogg Co. and Miller Brewing
Co. to Pizza Hut and Union 76, all of which are traditionally network clients, Oster and
Now, Adlink is preparing its sales initiative for 2000,
this time targeting three other categories -- entertainment, financial and beverages --
Each of those sectors is broader than ever, he pointed out,
with entertainment encompassing movies, programming, theme parks and entertainment
retailers; financial growing from banks to online trading, brokerage firms and mortgage
companies; and beverages now covering soft drinks, beer and wine, as well as bottled
water, isotonic drinks and health quaffs.
At MTV Networks, vice president of affiliate ad sales Jason
Malamud lauded Adlink as being "among the most creative and effective in using added
value to close new advertisers, as well as to promote their programming services."
On the buyer side, TN Media Inc. senior vice president
Howard Nass echoed that opinion: "They have a quality sales staff that's
aggressive and promotionally oriented. They know how to position their medium to the
buyer," Nass said.
Numerous TN clients have bought into their promotions, he
said, adding, "When they come to you with an idea, they deliver on the promise,
Malamud cited MTV's annual Video Music Awards
special and the Dec. 5 VH1/Vogue Fashion Awards special as examples of events
around which the interconnect has developed sales tie-ins.
Adlink, which booked a clothing retailer for the fashion
show, was especially creative with the 1998 VMA event, which originated in Los
Angeles, Malamud said. The interconnect ran tie-in contest spots in Macy's Los
Angeles stores and hosted a screening of the live show at the House of Blues.
In addition, Adlink was "remarkably successful"
with MTV's off-the-shelf "Studio Tour" promotion, he added.
Designed to build out to 40 networks, Adlink should grow
its list of insertable networks by five to reach 40 "by the end of the second quarter
of 2000," Thurston said. But the CEO could not indicate what might come afterward.
First of all, it's important to manage growth.
"We have to maximize every bit of that inventory and take a deep breath," he
said, "before moving beyond that."