National Cable Communications, despite the sluggish advertising market overall, posted a 5 percent gain during the third quarter from the year-ago period, an uptick the spot-cable ad-sales rep firm attributed to the success of its new-business development efforts and its interconnect initiative.
The July-through-September span marked the first quarter in 2001 to have surpassed the rep's results from the prior year, said NCC senior vice president and director of sales Andrew Ward.
During the first half of 2000, NCC's results were strong, while the third quarter weakened. Ward said NCC this year sustained a double-digit drop in first-half sales, while the third quarter evinced signs of a turnaround.
Factoring in Sept. 11 and the aftermath of the terrorist attacks, Ward estimated that NCC was off about 10 percent over the first nine months of 2001, relative to the comparable span in 2000.
NCC's fourth-quarter outlook, meanwhile, was unclear. "We don't yet have a handle on how holiday shopping is shaping up," Ward said.
Assessing the company's strategies over the years, Ward said NCC's list of prospective clients had been too narrow.
"We've relied too heavily on too few categories, most notably automotive, telecommunications and media/entertainment — all of which cut spending in the third quarter," he said.
But since last November — when Marc Bodner became vice president of sales development and marketing — NCC has striven to widen its client base.
"Now we're going after categories like financial services, retail, restaurants and beverages," Ward said, by contacting clients and ad agencies at the planning levels.
This gambit has helped NCC blunt some of the shortfalls within its traditional sectors.
Bodner estimated that 15 percent of NCC's sales through September came from his department's new-business efforts.
"Restaurants, various retailers and travel and tourism, believe it or not, are probably the three biggest categories," Bodner said. He added that the first category has been "under-developed by cable," while "retail historically has been poor users of the television medium, period."
Although MSOs like AT&T Broadband and Charter Communications Inc. have long contended that liquor is not a major ad category, NCC found that segment to be on the upswing in third quarter. Ward noted that unspecified MSOs have relaxed their advertising guidelines relative to the category, subject to case-by-case creative approvals and time-slot restrictions.
NCC started by pitching beer clients like Heineken and Amstel, followed by wine accounts and new brands like Zima and Smirnoff Ice. Subsequently, it began targeting hard-liquor marketers, Bodner said.
NCC will soon home in on pharmaceutical marketers and drugstores. Bodner said a forthcoming consumer-profile research project will give drugstore clients "a tactical, strategic marketing spin to what we do" and "show businesses why advertising investment pays off."
In 2002, NCC plans to turn its attention and pitches to movie studios, financial services, consumer-electronics chains like Best Buy and Circuit City Stores, home-improvement retailers like Lowe's and Home Depot, and such cellular phone providers as Cingular and Verizon Communications.
Complementing its push to reach new clients, NCC is expanding its deployment of network value-added promotions. Although MTV Networks and Comedy Central have historically worked with NCC to good effect in this context, Ward said, "We're undertaking that strategy with all the networks. We've had a tremendous amount of success on the promotion front."
Those efforts have been guided by NCC director of promotions Lori Greenwood, who reports to Bodner.
To that end, NCC recently booked Travel Alberta and Baltimore Tourism for A&E Network's "Escape the Ordinary" promotion, with those clients spending a combined $1.7 million, and also signed Backyard Burgers and Culver's, two regional fast-food chains, to spend $1.5 million on The Learning Channel's "Everyday Heroes" promo.
NCC has several more tie-in buys in the works involving A&E Television Networks, Discovery Networks and ESPN, Bodner said.
Elsewhere, NCC worked with MTVN on booking Nescafe, VoiceStream, Skechers (with retail partner Journeys Shoe Stores) and Luciderm (with retail partner Walgreen's) on spot deals for MTV: Music Television's Video Music Awards. NCC estimated those buys at $1.3 million-plus.
Nescafe, besides being an MTV International VMA sponsor, bought a spot sponsorship of that event in Los Angeles, to introduce Frothe, an instant hot-coffee mix. That deal included supporting MTV's "Party Like a Rock Star" sweepstakes in 23 markets and VMA viewing parties in conjunction with radio stations and Adlink in L.A.
Technological advances are also helping NCC augment its market share. The leading spot rep firm and its clients are increasingly using a Web-based platform for buying and selling inventory and also relying on streamlining the backroom buying process through electronic data interface.
NCC has expanded its EDI initiative to well over 2,000 cable operators, or 85 percent of its represented sytems, according to Ward. That effort is underlined in NCC's recent trade ad campaign proclaiming: "We're making the process simple."
Another element in NCC's multi-pronged attack is interconnecting markets. Ward said both these facets have historically stunted the growth of spot-cable revenues.
Currently, 44 of the top 100 markets industry-wide have been consolidated, he said, including 18 of the top 25. The 44 markets among the top 100 include seven developed by NCC, reaching 4 million cable homes.
NCC's recently consolidated markets have registered double-digit gains in the first nine months of the year, effectively snagging spot dollars from television stations, NCC executives said.
NCC, which consolidated Grand Rapids, Mich., and Wilkes-Barre/Scranton, Pa., last January, has also connected such markets as Providence/New Bedford, R.I., Hartford/New Haven, Conn., and Buffalo, N.Y., where it has recorded a 40 percent advance. CableLink added Cleveland and Albany/Schenectady/Troy, N.Y. last June. The former is NCC's largest interconnected market thus far, reaching 1.3 million-plus cable homes.