Local Systems Go Outside for Marketing Help

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With the ever-shorter turnaround time required for
marketing campaigns -- ranging from customer-retention campaigns to those that target
direct-broadcast satellite services -- many cable operators are turning to outside
marketing specialists.

"Most cable operators outsource some portion of their
marketing," said Woody Woodward, vice president of marketing for Time Warner
Cable's northeast Ohio division. "Very few operators do A-to-Z marketing
in-house. The outside agencies fill in the gaps between vendor-supplied campaigns and ones
that are locally originated," he added.

Typically, these agencies either utilize tested, proven
campaigns, also known as "syndicated packages," which can be adapted for
individual cable operators, or they customize campaigns or projects from scratch.

Cincinnati-based Sullivan Advertising specializes in
syndicated product, while St. Paul, Minn.-based The Main Street Group and Akron,
Ohio-based Zelinko Communications concentrate more on customized campaigns.

First Team Cable Marketing, based in Wilmington, Del.,
mixes both kinds of work, partner Paul McQuade said.

Sullivan bills itself as "the industry's
advertising agency," and it has worked on acquisition, upgrade and retention
campaigns for MSOs nationally and regionally, as well as with individual local systems,
said its founder and chief executive, Neal Sullivan.

The Main Street Group's primary strength is direct
marketing, said its president, Scott Bakken. "Most of what we do is customized,"
he said, adding that his company was not like Sullivan, which does quite a bit off the
shelf.

"Once I realized that there was a niche for cable-TV
marketing," said Jim Zelinko, founder of Zelinko Communications, who began his career
in cable with a direct-marketing campaign for Time Warner in Akron, "I was able to
start developing packages for specific needs."

Zelinko asserted that some of his competitors "develop
their programs and then go out and try to sell them," while his company develops
"specific campaigns" for clients, "which we can then offer
nationwide."

McQuade said First Team customizes "a lot of products,
like any typical ad agency," including acquisition campaigns, upgrades, new tiers,
digital tiers and new-product launches.

Meanwhile, syndicated product, he asserted, costs cable
systems "far less than it would for them to do it in-house."

OPS RATE WORK HIGH

For the most part, operators concurred and gave these niche
companies high marks for both cost-efficiency and expertise.

"They're on top of industry news -- even the
status of federal regulations -- so the use of time in discussing strategies with them is
very efficient," said Dan Santelle, vice president of sales and marketing for Time
Warner's Columbia, S.C., system.

In addition, marketing firms specializing in cable are a
good source of information on strategic executions, Santelle said. "They have a good
arsenal of materials and ideas, ways to attack a problem. The fact that you don't
always have to reinvent the wheel is helpful, too -- you can look at what others have
tried."

The importance of knowing the cable business can't be
overstated, operators and outside marketers agreed.

"If someone says they're looking at a two-pronged
campaign for digital and analog services," McQuade said, "a typical agency would
say, 'OK, great. What are digital and analog?'"

Operators like the fact that "there's not a
learning curve there," said Jeannie Boldt, marketing and promotions manager at
Paragon Cable in Minneapolis. "[The niche marketers] understand the product, what we
need and what we try to do."

Indeed, being able to identify hot industry trends and then
fulfill cable operators' needs as they arise are a critical stock-in-trade for the
niche companies.

At the moment, the marketing executives said, local
operators are clamoring for anti-DBS campaigns.

"The push is really on anti-DBS right now,"
McQuade said, adding that First Team has developed three turnkey anti-DBS campaigns and
three anti-wireless campaigns, complete with film spots, bill inserts and other collateral
materials.

TIMING ISSUES

Time requirements can vary widely, depending on the type of
project needed, the means of execution and how many parties are involved.

Paragon, which has worked with Main Street, has a fairly
small marketing department. "Sometimes, when we are working on projects that
don't have a whole lot of lead time," Boldt said, "we can call them in for
some assistance, and they're always right there.

"On a number of occasions, we have been working on
some pretty tight time lines," Boldt added -- including projects on realignment and
pricing notices -- and Main Street did a nice job helping Paragon to juggle all of them.

"A company like Sullivan can look at the best
practices from a variety of companies," said Ellen Lloyd, executive director of video
marketing at Tele-Communications Inc. "They do a very good job in coming up with
syndicated product that meets the needs of the entire industry, rather than something
that's just unique to TCI."

Minnie Marshall, cable-marketing manager at Chambers
Communications, a small MSO with 82,000 subscribers in five systems, who has worked with
Zelinko, said that by joining a print run with other small MSOs, she can save considerable
time and money.

"If I can tag on with another of [Zelinko's]
clients, it takes more lead time, obviously, but it helps a lot," she said.

While acknowledging that a print run with multiple cable
operators can be turned around quickly, McQuade warned, "It can still be
time-consuming because of the last company coming in. They can usually slip right into a
print run, but the guys who are in on the front end always want to know why we need such a
long lead time. It's because of the last-minute guys."

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