Offering commercial services and selling advertising to local businesses aren’t new concepts for cable operators. But combining the two business units into one division is unique in the industry.
“We have eliminated the quarantine between our commercial lines of business and we have designed bundled offerings that combine media, advertising and delivery of commercial services, which makes us a one-stop shop ,” Suddenlink president of Commercial and Advertising Operations (CAO) Kevin Stephens said.
Under Stephens, the commercial services part of the CAO group has experienced double-digit revenue growth to nearly $258 million in 2012 — about 12.5% of total annual revenue — and executives are bullish it can maintain double-digit growth for the foreseeable future. About 9% of Suddenlink’s commercial customers subscribe to the triple play of voice, video and Internet services, chief financial officer Mary Meduski said.
The goal is to increase that number while convincing those clients to also buy advertising. The opportunities are vast, she said.
Suddenlink’s CAO oversees all ad sales and direct commercial product sales, as well as the carrier-services business, offering services to resellers including wireless providers AT&T, Verizon, US Cellular and Sprint.
Ad-sales is the company’s most mature commercial business, generating single-digit growth each year, Stephens said. Technological advances such as TV Everywhere, addressability and interactivity provide Suddenlink with the opportunity to make ad sales a double-digit growth business going forward.
The sale of traditional commercial services is the unit’s largest revenue-generating business and it continues to grow rapidly. The company currently has about 17% of the commercial-services market in its footprint, so there is plenty of upside to be had, Stephens said.
The carrier-services business, launched four years ago, provides Suddenlink with some of its biggest opportunities.
Suddenlink’s location in second- and third-tier markets can often appear to be a disadvantage in an industry where scale is tantamount to success. But the fact that it’s often the only game in town gives Suddenlink a distinct advantage, Stephens said.
“We’re offering the same or, in many cases, better products and services than are being offered by larger companies in bigger cities with much higher densities,” he said.
Tying all of those services together into a single sales pitch is icing on the cake. When a sales agent goes into a business to hook up phone, Internet and video service, he or she also makes an advertising pitch.
“It’s an absolutely unique way of doing business,” Stephens said.
It wasn’t necessarily easy, though. When the commercial and advertising businesses were combined, most adsales staffers were unfamiliar with Suddenlink’s line of commercial products.
The two divisions began holding joint strategic meetings, first just to get to know each other and each unit’s line of business. Eventually, they began designing bundles combining advertising with commercial-services products.
“We’re still in the third inning with our commercial services business,” said Suddenlink CEO Jerry Kent. “We’re growing that business 20% a year and we’re taking nearly 20 cents of every dollar in the market right now.”