National Cable Communications is in the early stages of a major spot-cable ad-sales initiative that would package cable's national, local and regional news channels for national spot advertisers.
The goal: to grab ad dollars away from broadcasters by breaking clients — and their agencies — of the habit of equating news with over-the-air newscasts. This initiative could have major ramifications, as some TV stations draw as much as 25 percent to 40 percent of revenue from local newscasts, according to NCC CEO Tom Olson and industry sources.
"We've got to convince the buying community to break out of their mindset that, if they need news, go to broadcast stations, and we need to break the mindset on where news runs," Olson observed. "In broadcast, there's early news from 4 to 6 p.m. and network news from 6 to 7 p.m. But on cable, it's all day long, and there's an audience all day long."
For the past four to six weeks, NCC has been analyzing the ratings in 30 large and small DMAs from New York to Washington to Cleveland, said Olson. The spot-cable rep firm has just started to pitch agencies and clients, and several executives contacted for this story were unfamiliar with the NCC programs.
"The only thing that will pull dollars off of broadcast would be pricing, and the ability to do promotions, ratings and competitive separation," said Zenith Media Services executive vice president and director of local broadcast Bonita LeFlore, who assessed the NCC pitch sight unseen.
She said NCC's costs per thousands (CPMs) would need to be "competitive."
The NCC strategy "sounds like a cume [cumulative-audience] pitch, which may work for some advertisers if the package delivers," LeFlore added.
Since the mid-1990s, there has been a noticeable downward trend in broadcast-station news audiences and "a corresponding ascendancy for cable-generated news products," said Olson. Cable news networks — not just national services, but local offerings like New York 1 News in the No. 1 DMA — also tend to attract upscale households, he added.
Olson declined to estimate the potential of news sales in specific markets.
Time Warner CityCable senior vice president and general manager Steve Berman, who oversees sales for NY1, did not return phone calls by press time.
Olson said his premise even holds water in big TV markets where there are no dedicated local-news cable channels, such as Cleveland. He cited Nielsen Media Research ratings which showed how the over-the-air local-news audience there has eroded between May 1994 and May 2001.
The local broadcasters' aggregate share for early fringe and late news was "down significantly, about 17 percent," while cable's aggregate share in Cleveland jumped roughly 19 percent, said Olson.
The early-morning daypart showed a converse trend, as over-the-air stations, in the aggregate, gained share both in terms of households and adults 25 to 54. That's due largely to the fact that few broadcasters offered early-morning news eight years ago, said Olson.
Since there's no local cable-news service in Cleveland, NCC has suggested that agencies who buy both early and late local newscasts should "peel one of those off and give [that budget] to us," said Dan Lawlor, senior vice president and general manager of the rep's CableLink interconnect division. "We'll offer primetime [avails on national news networks] that will dramatically increase their reach."
That's similar to the approach NCC will take in other CableLink markets where there are no local news channels, he added.
In Washington, cable-news ratings growth and broadcast-news deterioration has been "even more dramatic," partly because because of Comcast Corp.-owned NewsChannel 8, said Olson.
Though NCC doesn't rep NewsChannel 8, the company is working with Comcast MarketLink Washington, officials said. D.C. interconnect general manager Pam Barratta didn't return calls by press time.
Automotive is at the top of the list of ad categories that NCC will target in this initiative, said Olson, because it "brings in an awful lot" of dollars for both TV and cable. Cable's ability to offer pod exclusivity "gives us a huge advantage" over broadcast stations, he said.
Some agency buyers agreed, and noted that in New York, it's not uncommon for competitors' ads to run sequentially within a single broadcast pod.
NCC will also make its pitch to airlines and travel, financial and insurance companies, said Olson.
RASCO NEWS RESULTS
As NCC preps its program, Rainbow Advertising Sales Corp. — which began phasing out its third-party news business last fall to concentrate solely on parent Cablevision Systems Corp.'s assets in the New York DMA — continues to score with a similar initiative.
RASCO and Cablevision have long had success in packaging the MSO's five News 12 services with national news networks via the New York Interconnect, said Cablevision senior vice president of sales Roger Stallard. This year, there's been strength in department stores, travel and tourism (including airlines and resorts) and restaurants, he noted.
RASCO's also snatched some ad-sales share from the Big Apple's over-the-air newscasts and has added "more and more clients every month," said executive vice president of New York sales Michael Wach.