It’s getting harder and harder to have any single spot stand out on TV, and everyone knows it. Clutter and competition are two big reasons cable networks are offering unique ways to set an advertiser’s brand apart, and clients are taking note.
Pundits agree that big dollars will again shift to cable from broadcast — anywhere from $500 million to possibly $1 billion, according to published reports. However, given the also widely held view that this will be a soft — possibly even flat — upfront year, more and more cable networks are touting their expertise in extending a client’s digital branding as an added allure in an otherwise hardscrabble marketplace.
Indeed, with cable networks now getting better aggregate viewership than broadcast, the case for why advertisers need cable is moot. How best to use what cable networks have to offer becomes an intriguing proposition, particularly as video on demand, high-speed Internet access, music downloads, instant messaging, interactive click-on-screen triggers, growing HDTV programming, and even voice-over-Internet protocol telephony become unique weapons in the cable upfront arsenal.
Of course, cable is not alone in turning toward high-tech bells and whistles. And whatever enthusiasm cable networks bring to their embrace of VOD and HD, there are limitations.
Mitch Oscar, executive vice president and director of Carat Digital, says, “Cable system operators have 21 million high-speed interactive subscribers and a backchannel to quickly utilize interactive television applications.”
But cable VOD is not unique. Direct-broadcast satellite providers such as EchoStar Communications Corp. and DirecTV Inc. are already getting into long-form advertising experiences, Oscar adds, either through their own VOD applications or using digital video recorders.
“However, the other advantage for cable is, because it is very localized, it can develop marketing campaigns that are very specific and can evolve into ROI [return on investment] models,” Oscar says. “Satellite, because it’s national, it’s much more difficult. It’s diffuse across the country.”
Clearly, the playing field is shifting. News Corp.’s Fox network — as well as the Dish Network and DirecTV satellite platforms — have recently unveiled deals and alliances that involve customized and/or interactive commercials.
Dish recently ran an interactive campaign from Mercedes Benz, thanks to a deal struck by the ITV advertising agency Critical Mass and the ITV media rep firm Turner Media Group.
Fox has allied itself with Visible World Inc., a private New York firm that owns software long used by Comcast Spotlight and other interconnects to give national spots a customized local feel.
Seth Haberman, founder and president of Visible World, has been pitching other broadcasters with the notion of offering advertisers the ability to localize advertising to meet special geographic or demographic needs.
Separately, DirecTV announced a deal with DaimlerChrysler Corp. to deliver interactive ads to DirecTV subscribers with set-top boxes enabled with interactive software, including DVRs. By pressing a button on their remote, DBS customers can schedule a test drive or view video clips — a digital opportunity that until recently had only been available on cable.
While cable networks have distribution deals with DBS platforms (and many are corporate siblings of broadcast networks), they are competitors for ad dollars as well. And 2005 may be the best chance the cable networks have to leverage their head start on the techno front.
ATTACKING THE CLUTTER ISSUE
Driving the efforts forward is the growing belief that broadcast and a number of cable networks are drowning amid a sea of 30-second and back-to-back-to-back 15-second spots that leave viewers with enough time between program breaks to not only grab a cold beer and hit the bathroom, but grill a cheeseburger, toss a salad and finish a manicure.
Indeed, according to a recent Media IQ evaluation, 15-second spots now account for more than 36% of all commercial inventory sold by the broadcast networks. In some dayparts, particularly daytime, that range increases to nearly two-thirds of all units sold.
“Clutter is a huge issue,” says Chris Pizzurro, vice president of multimedia marketing at Turner Broadcasting System Inc. “At TBS and [Turner Network Television], we have broadband and VOD offerings that we call digital extensions of sponsorships,” he says.
These include some cable VOD “vignettes” that can be accessed via the television remote without having to use a computer screen. All of these “are clutter-free,” Pizzurro adds.
“On [VOD telecasts of] The Real Gilligan’s Island we’re offering full video bumpers that simply say 'This show is brought to you by,’ and then offers the show commercial-free.”
VOD extensions are offered to advertisers that are already buying time.
“If you’ve invested in the show, then we offer you this,” Pizzurro says, adding that current sponsors for the show include Pfizer Inc., home improvement chain Lowe’s and Ford Mustang.
“Ford [Motor Co.] used our VOD application in a test last year,” Pizzurro says. “Ford got bumpers at the beginning and the end of each program.” He adds that Turner officials were “very encouraged” by the VOD activity of its networks, as related by the company’s MSO affiliates.
The issue, he notes, is not ROI, but ROO — return on objectives.
“[Advertisers] are looking for opportunities, and they will want to partner with us,” Pizzurro says. “Clients are asking to share their goals for their campaigns. One goal might be return on investment, but another might be brand effectiveness and brand awareness.”
According to Turner data, subscribers are willing to watch a 30-second, even 90-second bumper upfront on VOD telecasts if they know the show runs commercial-free. “We have data that shows [viewers] didn’t fast-forward through these spots,” he adds.
That view is shared by David Cohen senior vice president, interactive media, at Universal McCann Interactive. Cohen reports that recently some 97% of those viewing a Tylenol spot on Turner VOD “stayed with it.”
Cable News Network supplied Universal McCann with archival programming related to the weather to be used with the VOD Tylenol ads, Cohen says. “They came up with 10 solid [programs] for us” as part of the on-demand Tylenol buy.
CNN has been offering advertisers extended sponsorships from cable to its VOD platforms for some time now. Along with Tylenol, the advertisers include General Motors Corp. and Xerox Corp. CNN’s corporate sibling Cartoon Network has netted such VOD advertisers as Kellogg Co., Kraft Foods Inc., Nintendo Co. and Lego Group.
Meanwhile, Adult Swim, Cartoon’s late-night network, now boasts its own VOD channel.
VOD, of course, as a platform is available to anyone — broadcast or cable — who has content to sell and is willing to negotiate with the MSOs. But ad executives note that, so far, cable networks have been ahead of the curve in exploiting MSO relationships and becoming much more proactive in creating advertiser VOD packages.
“For the moment, cable networks are a little more progressive in using VOD,” Cohen says. “I haven’t heard anything from the big four broadcast nets.”
Of course Turner isn’t alone in supplying VOD propositions. Scripps Networks has been offering VOD and Internet packages since 2003 on Home & Garden Television’s Dream Home.
“We offer a one-hour online tour of the dream home with 15 different videos Internet viewers can walk through,” says Jeff Meyer, vice president of interactive sales at Scripps. “On VOD, we have customized the options so that VOD customers can actually look at the dream house as it’s being built. It’s consistently one of the most popular video assets we own.
“These are all separate profit centers,” Meyer adds.
Why charge more for something still only in 25 million digital cable homes? Because, “I’m not aware of anyone — local broadcast or satellite — that can offer the breadth of cable VOD programming,” Meyer says, adding that broadcasters don’t always license VOD rights. “ABC doesn’t own the VOD rights to Desperate Housewives, for example.”
Currently, Scripps’ digital channels, Fine Living and Do-It-Yourself, offer 10 hours of VOD programming on Comcast Corp., Time Warner Cable and Insight Communications Co. systems.
Among the VOD offerings are such fare as Quick & Easy Meals, Unwrapped and 30 Minute Meals With Rachel Ray. Every Scripps network has at least 10 hours of VOD time, or 40 hours a day total, with 25% of the programming “refreshed” weekly.
Sara Lee and Kraft currently run ads on these VOD platforms, Meyer says.
Clients can buy separate VOD time, but typically, Meyer says, Scripps “starts with our best clients and offers them extended multi-platform packages. Then, if there’s inventory left over, we will sell it separately.”
For Lifetime Television, the new woman not only likes to shop, she likes “webisodes” as well.
Lifetime is introducing 15 to 20 “Momasodes,” Web-based video content for Lifetime.com users that will discuss relaxation and crafts with product integration throughout.
“Lifetime wants to be at the forefront of Web-based video content,” says Michael Alvarez, vice president of Lifetime Partnerships. “One of our goals is how to give an on-air sponsorship more shelf life. LifetimeTV.com created customized content including Kiss and Tell, which debuted in February, and American Mom.”
Neither of the two offerings are considered added value, Alvarez hastens to point out. “We expect premium prices.”
Kiss and Tell was a two-week Web site offering with 30-second bumpers hosted by Amy Sidaris that directed site goers to Lifetime’s Valentine movies.
“We had 60,000 viewers for this test,” adds Linda Black, Lifetime vice president of business and marketing development. “We had no sponsor, but it was one of our top five sites. We felt it was really important to get the concept down and see how consumers would consume content.”
Lifetime currently is working on a special broadband vignette with Pontiac and will be launching a Lifetime Wireless for Women application this summer.
“Imagine getting relationship tips, horoscopes or sweepstake on your cell phone,” Black explains, “with downloadable ring tones.”
“Lots of advertisers want to connect with Lifetime’s special relationship with women,” Alvarez says, adding that a VOD application is “in development.”
Meanwhile, NBC Universal — home of Bravo, USA Network and Sci Fi Channel — is in the testing stages with wireless, Internet, VOD and free on-demand applications, says Jeff Lucas, senior vice president for the cable entertainment group. In that pursuit, Bravo recently hired Marietta Hurwitz as vice president of interactive marketing and content.
“Bravo is a channel always on the cutting edge,” Lucas adds, “and that transfers over to how they deal with different forms of media.”
Currently, Lucas sees automotive, retail, wireless and fast food as good sources for what he calls “technological extensions.”
“Cable is not so much unique [in new technologies],” Lucas adds, “as in the forefront. We have to be. We are much more competitive. [There are] 62 other networks out there. Cable’s been first because it has to be.”
Lucas is especially proud of Universal HD’s 1 million HD households. “We are the only 24-hour network with all our programming and our commercials in [HD],” he adds. (Discovery Networks, which boasts it was the first to go HD on a 24-hour-a-day basis, acknowledges that not all of the commercials on its HD Theater are delivered in HD.) So far Sharp Electronics Corp. is doing a test with Bravo.
NBC Universal’s Spanish-language channel mun2 is also getting into the techno act. mun2, which is part of the Telemundo Group and in the midst of a revamp, aims to “reach young adult Latino viewers through their everyday world, specifically technology,” says Antoinette Zel, executive vice president of cable networks and network strategic planning at Telemundo. “We aim to leverage digital extensions within (this) new programming format to provide advertisers with a holistic experience.”
The extensions are also to be found among News Corp.’s cable channels. Bruce Lefkowitz, senior vice president, advertising at FX Networks, notes that National Geographic Channel recently completed a VOD test with a credit card company.
“The NGC brand lends itself extremely well to VOD application,” he says. “We will have an aggressive VOD strategy and offering for this year’s upfront.”
One of his major pitches involves clutter.
“National Geographic already enjoys the perception of being the least cluttered environment in all of cable, according to a recent BETA study across all A18 plus, A18-34, A18-49, and A18-49 $75K demos,” he says. “We believe our VOD offerings can provide advertisers with an even more impactful isolated position to enhance their message.”
The results of the credit card/VOD test “indicated that attentiveness and brand recognition of the VOD sponsor was extremely high,” Lefkowitz says.
Despite all of the new innovations, Carat’s Oscar sees challenges for both cable and DBS in their mutual lack of measurement of whatever new platforms they use.
“Both of their businesses are in selling subscriptions,” Oscar says. “They’ve never had to measure anything. Now we’re in a digital world where every click counts. Cable has begun to give us data, and they will give us more, but it’s not enough to understand what I see is a bigger issue: How are people actually watching TV? What are they thinking? What are they doing?”