Chicago -- Signs of bullishness were everywhere at the
Cabletelevision Advertising Bureau's Local Sales Management Conference here last week.
CAB president Joseph Ostrow projected that total cable ad
volume would climb to $12 billion in 2000, up 15 percent from about $10.4 billion this
And National Cable Communications CEO Tom Olson said last
week that the national spot-cable rep firm is looking for that segment to increase its
share with double-digit growth beyond 2000.
Continuing its momentum from last year, spot cable seems to
be confirming that bullishness thus far.
MediaOne Group Inc. vice president of ad sales Ed Dunbar --
also chairman of the CAB's committee on national spot advertising -- said, "National
spot only recently moved into double-digit [growth]," but its growth is running at
three times that of the rest of the industry.
Last year, national spot sales jumped 39 percent, and
they're running at about the same rate to date, he added.
Citing Veronis, Suhler & Associates Inc. projections,
Olson said total cable ad volume should hit $16.4 billion in 2002 -- a hefty increase from
$9.2 billion in 1998 and $3.3 billion back in 1992.
Spot cable will continue its upward trajectory, as well,
approaching $1.1 billion in 2003 versus $855 million in 1998, he said.
Spot and local combined should rise to $4.7 billion in 2002
from $2.5 billion in 1998 and just under $1 billion in 1992, Olson added, citing Veronis,
Suhler and NCC estimates.
PEAK IN 2000
Overall, ad spending in the major media looks to be strong
through 2002, although Olson noted that most projections see a peak in 2000 and a drop in
2001 due to a falloff from the hoopla over the year 2000, the presidential election and
the Olympic Games.
Ostrow urged his conference audience to consider "all
budgets [as] fair game, whether it is TV, print, promotion, direct mail or weekly
shoppers." But most of the operators' attention during sessions seemed to be on TV
Although broadcast television and cable will continue to
fight print for ad dollars, Olson expected basic-cable viewership to move ahead of
broadcast TV in 2000 in terms of share of hours per person, and ahead of newspapers in ad
Explaining the reasons behind spot cable's rosy outlook,
Olson cited the trend toward major markets becoming consolidated or interconnected. That,
he added, enables cable to offer itself the way national advertisers prefer to buy -- on a
marketwide basis, with one invoice.
Adding to the ease of buying is the increasing availability
of electronic data interface, he said.
Video Networks Inc. announced separately at the CAB show
that it has now installed its "EC Tracker" EDI system at more than 100
In its latest move to get the message out to the ad
community on such spot cable improvements, NCC will break a trade ad campaign today (June
14), timed to coincide with the National Show, touting cable's audience growth.
The theme, "Spot Cable -- Reach Your World," is
the same as that of the industry's spot cable tour last fall. The effort will run through
the second quarter, with future ads focusing on NCC's resources in technology, research
A tie-in mailing will include testimonials from buyers at
Leo Burnett USA's Starcom Media Services and J. Walter Thompson Co.
T&B STILL NEEDS IMPROVEMENT
The biggest remaining area of improvement is traffic and
billing. Olson indicated that NCC is preparing to evaluate the available T&B systems,
after which it will likely issue requests for proposals from T&B vendors.
Philadelphia Interconnect vice president and general
manager Jim Klunder agreed that advertisers gravitate to the consolidated/interconnected
markets because they present ease of execution, competitive rates and one contact,
contract and invoice.
He pointed to Adlink, the Los Angeles interconnect, as the
prime example of "reaping the rewards" of that one-stop-shopping approach.
At South Florida Cable Advertising, national sales manager
Christine Dubin said the Florida interconnect's presentations in association with NCC
ultimately convinced Toyota Motor Sales USA's Lexus division to commit to a spot cable
That upscale automaker has now budgeted $300,000 for the
interconnect for the third and fourth quarters, she added.
While she conceded that there is sometimes friction between
systems and rep firms, Dubin cited the Lexus sale as an example of the fruits of sales
Olson emphasized that even smaller systems and markets can
get in on the consolidation trend by doing the same kinds of things as the larger ones. By
consolidating and, thus, "speaking with one voice" to advertisers, he added,
they, too, can "realize a lot of the same benefits."
NEW FOCUS ON NETWORKS
The partnership concept was also applied to networks and
affiliates at the CAB show, where past sessions had not concentrated on programmers.
Network programming is what's been driving cable's audience
growth, which, in turn, has been fueling a boom period in ad sales for not only the
networks, but also the operators' local sales and national spot sales.
In one session, several network executives indicated how
they position their services for local sales.
With the basic networks currently enjoying a hot cable
upfront -- and some still looking for a $1 billion uptick, to $3.8 billion, for 1999-2000
-- Ostrow is already eagerly awaiting next year's upfront, which he fully expects to be
Due to the current upfront selling season, some sales
senior vice presidents offered their comments on videotape, some of which were applicable
to local selling.
For example, John Silvestri, executive vice president of
sales at USA Networks Inc., said USA Network, as a general-entertainment service,
positions itself as a ratings leader offering different demographics across different
Several in-person executives talked about clients or
categories they had broken or upgraded:
Fox Family Channel senior vice president of New York
sales David McCoy said that network's increase in original family-friendly fare has led
the auto category to boost spending sharply in the past three years.
BET Holdings Inc. executive vice president of
broadcast-media sales Louis Carr said Black Entertainment Television's two-year
concentration on telecommunications has led to that category becoming the network's No. 1
Discovery Networks U.S. Midwest regional sales vice
president Pepe Miller said Discovery Channel upgraded MasterCard International spending
with an "Eco-Challenge" sponsorship, which included incorporating footage from
that event into its TV campaign.
Lifetime Television senior vice president of ad
sales Lynn Picard and E! Entertainment Television senior vice president of ad sales Neil
Baker cited financial gains, with Baker also pointing to computer- and Internet-related
Fox News Channel ad executive Paul Rittenberg,
noting that cable news is a growth segment in audience, singled out Charles Schwab &
Co., which was lured by sponsorship of FNC's newly created market-closing report.
ESPN central region vice president Bill Burke
mentioned insurer Lincoln National Corp., which was drawn to ESPN's SportsCentury programs.
Carr, observing that BET is "a window to black
America" and "people of color will become the new majority in the new
millennium," said BET is preparing to launch a marketing campaign to tell the ad
community about the value of the African-American consumer.
A record "$10 million to $15 million" will be
spent on cable spots and trade ads bearing that message, he added.
CAB keynoter Decker Anstrom, the National Cable Television
Association's president and CEO, addressed the network/affiliate partnership from a
Reiterating that operators "must restrain cable-rate
increases in the future," Anstrom said the networks, too, must be restrained in their
Cable operators' ongoing "upward price
pressures," he added, should be lessened by ad-revenue streams flowing into
programmers and operators.
Anstrom also urged operators to "spare some local
inventory" for such things as the NCTA's ongoing "On-Time Guarantee"
campaign and the Ad Council's public-service announcements.
Ad Council president Peggy Conlon, who followed Anstrom,
also urged cable support for PSAs.
Touching on other matters, Anstrom said:
The MSO consolidation spurt "will pass the test
in Washington unless it came down to one company owning everything."
"We must defeat any digital must-carry
The digital-cable trend offers "choice and
control" to subscribers and promising ad-sales opportunities for operators. The
latter will eventually include targeted and interactive advertising that will give cable
"some direct-mail capabilities."
The NCTA's biggest concern is that "our
competitors [like America Online Inc.] will try to use politics to hold us back."