Ad-sales executives at key MSOs and interconnects feel they're now seeing light at the end of the tunnel — and they're hoping it's not an oncoming train.
Most of the executives pointed to greatly improved ad sales during the third quarter and even stronger sales already being booked for the fourth quarter.
Privately, many of them expressed uneasiness that something could derail the turnaround, whether it's the faltering economy and stock market, unrest in the Middle East or the ongoing threat of terrorism in this country.
At Time Warner Cable, president of ad sales Larry Fischer said his MSO's third-quarter ad sales "finished really strong." September — a five-week month this year — was "the strongest month I've seen in close to two years, fueled by programming and certain [ad] categories."
The programming included Major League Baseball's New York Yankees on its New York system and Minnesota Twins on its Minneapolis system, as well as National Football League coverage on ESPN and MTV: Music Television's Video Music Awards
— moved up to August to avoid proximity to the Sept. 11 anniversary.
Advertisers seemed to be holding back on ad spending until after that anniversary had passed, Fischer and others noted.
At Adlink, president Bob McCauley said the Los Angeles interconnect "missed budget badly in July," but sales improved in August and rose 15 percent in September.
Rainbow Advertising Sales Corp. executive vice president of New York sales Michael Wach said its New York Interconnect had "a great third quarter, as the market started to firm up." The quarter closed with gains "well into double-digits and we made budget," Wach said.
The category that created the most stir was political.
Time Warner saw "tons of political advertising," Fischer said, citing independent candidate Tom Golisano's ad battle against Republican incumbent Gov. George Pataki in New York, where there also was a primary ad fight between Democrats Carl McCall and Andrew Cuomo, until the latter dropped out.
Other races also helped the MSO. "We're doing just fine in North Carolina," he said, where Time Warner benefited from the hotly contested race between Democrat Erskine Bowles and the GOP's Elizabeth Dole.
Regional news channels also benefit MSOs during political-campaign seasons, Fischer added, citing New York 1 News in particular. (According to Fischer, the MSO's flagship New York system is "approaching 500,000 digital-cable subscribers," and the operator plans to insert local spots on NY1's Hispanic spinoff digital channel, due early next year.)
At the New York Interconnect, political spending has "gotten heavier and heavier" since September, Wach noted.
In New York's gubernatorial race, Golisano and McCall spent heavily on the interconnect, he said. But he's still waiting for ad spending from Frank Lautenberg, the Democratic New Jersey senatorial candidate who replaced the scandal-ridden Sen. Robert Torricelli earlier this month.
At Adlink, the California gubernatorial race in particular "helped us tremendously," McCauley said.
"The airlines have come back after having been non-existent [as spenders] since Sept. 11," he said. "Retail and financial also are coming back and media has been terrific," as various networks have promoted new fall-season programming "after having been hammered last [fall]."
Meanwhile, travel, theme parks and other recreation and telecommunications segments continue to be "clobbered" and are not spending much.
Wach said a lot of accounts, especially in automotive and telecommunications, have returned to the fold and the movie and entertainment segment also is growing.
Other strong third-quarter categories were healthcare, financial, media (especially the broadcast networks, plugging their new fall primetime seasons), movies and entertainment and fast food, Fischer said. Automotive spending, in particular, was energetic, although he attributed that more to factory zero-percent financing than to dealer advertising.
On the down side, he said airlines and brokerage firms were among the missing, with the former replaced by gasoline companies and the latter by mutual funds. Packaged goods and most retail showed signs of "softening" during the quarter, he noted.
During the year-to-date, Time Warner Cable notched "brisk growth — in the middle-double-digits," Fischer said. Indeed, if the MSO's sales pacing holds up, he said, "We should finish with a strong fourth quarter, likely to be our strongest quarter of the year — [with growth] in the mid-teens."
The Big Apple interconnect's year-to-date performance was also solid — "up nicely, also into double-digits," Wach said. He dubbed that "a nice sign coming off the horrific events of last year."
The remainder of 2002 "also is looking very good," so good in fact that "we've already made budget for the fourth quarter."
Adlink's McCauley described his interconnect's year-to-date results as akin to "an ocean liner changing direction. The first half was just bad news," after which the third quarter showed improvement. October through December so far look strong, although he said there remains some uncertainty.
Sales have been "pacing just slightly up" over a year ago, but he maintained, "There can't really be an apples-to-apples comparison fall to fall," given the widespread ad-sales collapse after the Sept. 11 terrorist attacks.
Although the interconnect was 4 percent behind budget for the nine-month span, McCauley said he expects to make budget by year's end.
AT&T Broadband and Cox Communications Inc. officials declined to discuss their ad-sales performance until they report their financial results to analysts later this month.
Comcast Corp. executives also begged off because their top-echelon ad-sales executives are still relatively new to the MSO.