All of the major MSOs agreed last week to scrap paper bills sent to ad agencies for national and local spot buys, committing to move to an electronic data-interchange platform by June 28.
The goal of the agreement, spurred by the Cabletelevision Advertising Bureau, is to reduce administrative costs and make it easier for ad agencies to spend money on cable advertising.
"We've been told by ad agencies that the easier we are to do business with, the more revenue we're going to get," said CAB president Sean Cunningham.
The MSOs that signed off on moving to an EDI platform are Adelphia Communications Corp., Bresnan Communications, Bright House Networks, Cable One Inc., Charter Communications Inc., Comcast Corp., Cox Communications Inc., Insight Communications Co., Cablevision Systems Corp. and Time Warner Cable.
National Cable Communications, the rep firm owned by Time Warner, Cox and Comcast, offered to supply an EDI platform that it has used since 2001 to other operators for free.
NCC president Greg Schaefer said MSOs are already using EDI platforms to bill most ad agencies for national spot buys, but only about 15% of local spot buys are billed through EDI.
Cox senior vice president of ad sales Billy Farina said EDI would allow the MSO to reduce the number of mistakes that are made with paper bills. "It's less prone for any kind of error. It's faster, it's more cost-efficient, and I also think it's much more customer-friendly," Farina added.
Eglon Simons, executive vice president of Cablevision's Rainbow Advertising Sales Co. unit, said EDI also allows the MSO to reduce its receivables. "That's simply because the customer receives the invoice much faster — it's almost instantaneous," Simons said.
Cable executives are also looking to use EDI as a way to differentiate themselves from local broadcast stations, many of which still rely on paper bills.
Abby Auerbach, executive vice president of the Television Bureau of Advertising, said about 800 of the nation's 1,200 TV stations have electronic invoicing capability.