They might not always be willing to share ad-revenue totals with their network partners, but cable operators keep a sharp eye on what's spent on sales promotions — and how much money comes in from advertisers.
They're also mindful of turning "value-added" into "value-earned," a topic explored during one session at the Cabletelevision Advertising Bureau's sales conference here two weeks ago.
Need more 'loot'
National Cable Communications director of promotions Lori Greenwood said it's imperative that cable make it known from the outset that, in order to renew a given promotion heavy on added value, the account must increase its investment the next time around.
Clients and their ad agencies will always make the "you did it for us last year" argument, she said, so "you have to be really clear" about the increased budget.
For instance, Walt Disney Pictures spent $500,000 last November on the "Loot of a Thousand Winners Sweepstakes" to promote the studio's animated film Treasure Planet, said Greenwood.
That campaign also benefited from all the promotion spots contributed by participating interconnects in 16 markets, which were lined up by the spot-cable sales rep. Those avails were worth an additional $255,000, she said.
Greenwood said she has already told Disney — which contributed a cruise as the top prize, plus hundreds of passes to local screenings — that it must increase its budget for the next NCC promotion.
Existing clients of Adelphia Media Services in Ontario, Calif., must deliver a minimum of 15% in incremental spending to qualify for its customized promotions (though not its evergreens), said general sales manager Mike Mejia. New accounts must reach a specific budget level, he said.
A variety of these promotions are available, so the operator is recognized as "giving more than spots and dots," he said. His system, which had planned to cut the 24 promotions it offered last year in half, instead had implemented 27 as of May, he said.
The reason for the uptick, he said, is that the promotions have been successful.
For Adelphia, the most used promotions are point-of-sale enter-to-win contests, character meet-and-greets, evergreens, customized promos and linkups with movies. About 90% of its promotions involve networks, he estimated, since those tend to perform best.
In its next movie endeavor, Mejia said Adelphia would tie in with the seven-city tour for Sinbad, DreamWorks SKG's summer release.
On the other hand, Karen Narciso, Time Warner Cable's San Antonio-based Southwest regional director of marketing, said enter-to-win contests are not doing well, because consumers are more wary that companies will use their names for telemarketing purposes.
Operators also must be vigilant about the costs of mounting promotions, various officials said. Terryl Williams, Charter Media's regional marketing manager in Murfreesboro, Tenn., said her systems look to make money on promotions by estimating cost, then setting minimum sponsor requirements.
She agreed with Adelphia's Mejia, who said, "We're always looking to get at least a 10-to-1 [return on investment]."
Unlike broadcasters, which tend to line up a number of tie-in spomnsors, cable operators like to limit the number of promotion sponsors — preferably with category exclusivity. Narciso said most clients with annual budgets get exclusives.
NCC's Greenwood noted that marquee events such as MTV: Music Television's Video Music Awards and Nickelodeon's Kids' Choice Awards are less likely to offer local exclusives.