Steve Litwer has been selling cable television since 1992, when his old mentor Sonja Farrand lured him away from the radio business to sell local ad spots in Kansas City, Mo. The two have worked together ever since having moved from AT&T Broadband to Mediacom Communications in 2001. Since 2005, he has served as group vice president of advertising sales for Mediacom’s OnMedia division. He will now take over as senior vice president, OnMedia Advertising Sales Division, replacing Farrand, who is retiring after 23 years in the cable industry. Litwer recently talked to Local Ad Sales. An edited transcript follows:
Q: You’ve worked with Sonja Farrand for a long time. Now that you are officially in charge, are any changes in order for On Media?
A: I don’t plan any abrupt changes. We have a steady culture and we have been successful. I see no need for major disruptions at this point.
I have worked with Sonja for a long time. It will be kind of weird to tell you the truth. I have big shoes to fill. Sonja hired me in 1982 when I was a kid in my twenties at a radio station in Kansas City. When she went into cable in 1984, we couldn’t figure out what she was doing. I came into the cable game in 1992 and worked for her in cable. I finally understood why she left radio. Cable is a fantastic business. I am pretty optimistic about the business.
Q: What are your biggest opportunities going forward?
A: Of course there are issues we must deal with, but when I look at the world of business, I know people will continue to advertise. Newspaper and radio are losing share and TV, which we are part of, is gaining it. I believe in the power of TV and I believe in the power of cable TV. We as a society have a love affair with online right now. That won’t necessarily end. But the best place to brand your product is TV, not online. That will continue to be the case.
I also believe that the local interconnect is not necessarily the Holy Grail for cable. The zone is the Holy Grail. Do we want to compete with broadcasters or do we want to command the zone where they can’t go? Of course, we want national dollars, but if you handle your local business well, it will work well for national dollars as well. We’re big supporters of NCC. They work hard and we have a team that works closely with them. But we also know that our strength is our local markets.
Q: What challenges do you face?
A: Taking out the political bump we expect to have this year, we’re challenged to grow our business in 2008 because of the auto and housing slumps. Home sales were off 27% in 2007. That’s incredible. Imagine how that is affecting home furnishing, which is a big category for us. We all know the challenges in the auto business right now. Our challenge is to go out and convince those people to advertise and to develop new business.
We think our biggest opportunity for new business lies in health care. People will spend money to get well. Boomers will need more medical attention going forward. The issue is that most of us don’t know how to sell health care. They’re not used to advertising and we’re trying to get them comfortable with the concept. So we’re training ourselves on how to attract clinics, doctors and other health care providers. We think that category can be as big as auto within three years.
Q: What kind of impact will VOD advertising have for you?
A: We don’t really know what kind of impact VOD will have. But it does separate us from the competition. We’re bound and committed to experimenting with VOD and other forms of advertising. I think spot will continue to be 99% of our business for a few more years. VOD isn’t a magic bullet but we are bullish. We are part of Canoe and we’re optimistic about the potential.
Q: Will the recession have negative implications for OnMedia in 2008?
A: We tell our people that no matter what they read about recession, we can still succeed. Even if car sales are off 3%, that means 97% of the people are still going to be interested in buying a car. We’ve got a local medium and we have to be great at local transactions. That is what we do best. Advertising, like politics, is really all local.
We all have to roll up our sleeves and get to work. Every company has one purpose: to create customers. It’s all about blocking and tackling. The small plays and small moves all add up.
Q: What kind of impact will the election season have on OnMedia?
A: Two things happened at the Iowa Caucuses. The amount of money spent on advertising was vastly higher than in years past. I read that contenders spent about $40 million in Iowa alone. That is multiple times more than in was spent in 2004. The NCC has improved its ability to make a case for cable and they did a great job of getting our share of the money. We got a bigger piece of ad pie than past years.
On the local side, we know how our zones overlay congressional districts and we have specialists in every market who are trained to know local politics. They know the market. They know the field level personnel and they know how to sell spots to those folks.
Every two years we get a little better and better at convincing them to buy local spots. In 2002, we calculated that we got 2% of TV ad dollars. In 2006, we got 4%. Those aren’t huge numbers, but we doubled our share and we’re accelerating those numbers this time around as well.
Q: What’s the best part of your job?
A: I feel very fortunate that I work with some of the greatest managers and salespeople in the industry. Our mission statement is: We will honor and respect each other. When you do that, they honor and respect their customers. My greatest effort will be to continue that ethic and sensibility. It’s very important to me and to everyone at Mediacom.