MSOs See Growth in Ad Sales.com

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Chicago -- The question of whether the Internet is friend
or foe was addressed anew at the recent Cabletelevision Advertising Bureau Local Cable
Sales Management Conference here.

The general consensus: So far, the Web is an ally in
operators' sales tied to their local Web sites, as well as in networks' integrated ad
sales to national clients.

Comcast Corp.'s Comcast Cable Communications, Cox
Communications Inc. and Time Warner Cable's Paragon Cable unit's Cable Advertising of San
Antonio are among cable companies enjoying some initial success in selling the Web as a
local medium.

The session attracted a goodly portion of the 1,050
attendees who signed up for the conference.

The Internet may still be an infant as an ad medium, but
it's hard to ignore. Advertisers have already boosted spending on the Web by 231 percent,
to $1.5 billion in 1998, said Linda Kohlhagen, general manager at Cox's CableRep ad-sales
operation in Orange County, Calif.

William Farina, Cox's new vice president of ad sales, who's
also chairing the CAB's committee on new media, said the various major MSOs are in
different stages of development when it comes to Internet ad sales.

Farina added that Cox Interactive Media has developed 29
city sites, including OCnow in Orange County, which Kohlhagen described as one of the
first and most successful of the sites mounted thus far by Cox.

Launched in spring 1998, OCnow currently generates 2.5
million page views daily, Kohlhagen said, adding that Cox uses that figure rather than
hits as the preferred unit of measuring viewership.

The site -- with Web "channels" devoted to autos,
travel, news, entertainment and sports -- sells its commercial inventory to clients like
Job Doctor, AutoConnect and Ford Motor Co. and Toyota Motor Sales USA Lexus dealerships in
conjunction with the cable system, she added.

Kohlhagen attributed a great deal of OCnow's initial
success to marketing support. As she put it, "A site without promotion is like a
billboard in a basement."

The 30-second promo spots for the site devote one-half of
the time to OCnow and the remainder to a commercial for one of its sponsors, she noted.

CASA general manager Phil Johnson agreed with Kohlhagen on
the importance of promotion. "You need to promote your site, or the site is
doomed," he said.

Johnson conceded that there were "lessons learned the
hard way" as CASA developed and sold its kids-oriented Web site. "Can you make
money on the Internet? Obviously you can, [but] there are no rules. There is no one right
way. You have to be flexible."

In a Texan drawl, he observed, "Git yourself a podner
or two." After contacting various companies, including cable networks, Johnson said,
the programmers offered content for CASA's use, but no financial backing.

Comcast has been developing "In Your Town" sites
in various markets, including "In Sarasota." Maggie Hutter, area manager of ad
sales for Comcast in Sarasota, Fla., said the MSO began by buying an existing site and its
150 clients.

In the three years since, she added, Comcast learned much
from its heavy client churn and from the lengthy sales calls needed to educate prospects
on a new medium and pricing.

The latter, which began at a mere $50 per month for a Web
page, proved too low to create an incentive for Comcast's account executives to sell, she
said, so that was upped to between $350 and $600 monthly.

Moreover, Comcast now sells the site only to its cable
accounts, with a Web specialist brought in to develop new clients. The site currently has
210 clients, she added.

Everything from its ESPN National Football League coverage
to Discovery Channel's "Shark Week" now has a local Web component, Hutter said.

Similar to what happened at Comcast, CASA's sales force had
to work out some kinks and overcome initial resistance to the concept, Johnson said.

"Never underestimate account executives' resistance to
change," he added. Despite the necessity of promotion support, he said, "They
will whine because you have invested [advertising] inventory" for promotion purposes.

But once they recognized that "it's all about
eyeballs, so it's not all that different from cable," sales grew, Johnson said.

CASA chose the kids' genre because it has a large cable
audience and "it's locally underserved" by broadcast television and the Web, he
added.

Johnson urged local sales managers to "take a
leadership role in developing integrated cable/Internet product strategies, or face being
left out."

Programmers are also heavily involved in integrating cable
and Web ad sales.

On the enemy-or-ally issue, Discovery Networks U.S. Midwest
sales vice president Pepe Miller said, "Clearly, at Discovery, the Internet is
friend."

ESPN central region vice president Bill Burke went further,
describing the Internet as already "part of the family… It's more than a
friend."

BET Holdings Inc. executive vice president Louis Carr felt
that the Web as an ad medium is "much as cable was in the '80s."

Internet technology was also featured in other ways at the
conference.

Access Television Network, for instance, is using that
technology to hasten the sale of cable systems' remnant or unsold inventory.

At the show, Access introduced the Web-based
"e-Quote" system, whereby operators can inform Access when they have time
available, and Access can respond more rapidly with bids for those avails.

In the past five years, the company said, it's generated
$70 million in revenues from operators' remnant time.

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