Sizing Up Cable and Web Buys

Author:
Updated:
Original:

When Larry Schmuhl hired an advertising agency three years ago to help market Blackjack Pizza to customers throughout the company’s footprint in the Rocky Mountain region, agency executives steered him away from buying cable spots and sticking strictly with broadcast buys.

But the Westminster, Colo.-based Blackjack Pizza vice president, who had been buying cable before hiring the agency, balked after three years and told the agency to come back with a cable strategy. He’s glad he did and so is the agency, Schmuhl said.

“The agency had extensive experience with broadcast and networks,” Schmuhl said. “They were against cable. But we convinced them to buy some cable and I think they were surprised by the success cable has had for us. I think we helped them turn their perspective around. We still need to do broadcast but cable is integral to our strategy.”

Mountain States Toyota in Denver spends about 20% of its ad budget on cable, 40% on broadcast, and the rest on grassroots and service projects. The Denver area auto dealer stopped buying newspaper in 2005 and eschews radio as well, according to Tim Van Bingsbergen, GM of Mountain States Toyota and director of the Toyota Dealers Advertising Group. Van Bingsbergen reexamines his media buys twice a year with his Comcast Spotlight executive, he said.

“My [Comcast Spotlight] AE is good about that and they always bring new opportunities,” he said. “We don’t always look at those very seriously, at least until we have enough information to make an educated decision. But today’s consumer is increasingly moving to cable and [having ads on that platform] is a great opportunity to grab their attention.”

Comcast recently pitched its on-demand Green Channel and Comcast.net opportunities to Van Bingsbergen, but he’s staying clear of those ad outlets for now. He likes the concept — except that it isn’t delivered in high definition — but doesn’t think Comcast has marketed its Green Channel enough for viewers to know where to find it or what it offers.

“We want some hard numbers to look at before we go there,” Van Bingsbergen said. “I’m experimental, but I want to know that where I’m putting my dollars is going to work for me. I am doing some Internet advertising with the Denver Post’s new auto Web site right now. I like it because I can track it. When Comcast comes back to me with more specific data on their on demand offerings and their Internet offerings, I’ll listen to their pitch again.”

Being able to track a media buy is driving a lot of advertisers to the Web, said Jon Rosen, Spot Runner’s newly named vice president of sales and business development. Rosen has more than 17 years of experience in sales and business development for Internet companies with a specialization in advertising and e-commerce. Before coming to Spot Runner, Rosen was senior vice president of Web business for Autobytel, an automotive media and marketing services company. Before that, Rosen was head of strategy and business development for AOL’s Search and Directional Media Group, where he launched the company’s search marketing programs and oversaw strategy, corporate development and new business initiatives related to search, ecommerce and travel products. So he understands the strength of tracking ad buys.

Internet search has changed the ad market significantly, Rosen said. Advertisers are becoming increasingly comfortable with the medium and it’s easy to track an ad’s effectiveness.

“Advertisers are looking closely these days at [return on investment] or proxy metrics,” Rosen said. “I hear the word ‘yield’ more by local advertisers than ever before. I almost never heard that word from local advertisers even 24 months ago.”

To be sure, local advertisers are no longer shooting from the hip when it comes to media purchases. Schmuhl is careful to make sure all his TV spot buys are run during a particular time of day (mostly around the dinner hour) and on channels that appeal to his target demographics: 18- to 34-year old males. That means buying ad spots on sports networks and in college markets, outlets that skew to younger audiences like MTV.

Van Bingsbergen is also careful to make media purchases based on demographics, not just the number of eyeballs. That means the most-watched shows or networks aren’t necessarily where he wants his ads. He’s looking for high-income consumers and women drivers and expects advertising prospects to provide data showing where those consumers can be found on the dial. 

Many local business owners and operators remain convinced they can’t advertise on cable because of cost and production issues, Rosen said. Spot Runner is constantly trying to change that perception. Often, potential advertisers will have one of two responses: “We don’t understand” and “We can’t afford to advertise.”

Providing clients with the kind of metrics and analytics they need to understand what they’re buying makes all the difference in the world, Rosen said. He sees search as the having the biggest growth potential for advertisers, followed by TV — both broadcast and cable. Cable clearly offers local advertisers benefits of targeting specific demographics as well as specific geographic areas, he said. Internet advertising, particularly search, provides exact tracking measurements.

“The advertiser with the right tools says, ‘I’m not going to pull back during tough economic times,’” Rosen said. “The better informed they are, the less they pull back.”

Schmuhl falls into that category. Despite a downturn in his business this year, Blackjack Pizza increased his advertising budget by 10%, keeping the mix of broadcast and cable about the same as last year (60% broadcast; 40% cable). Still, he likes what cable brings to the table. Comcast Spotlight “has done a great job of bringing value-added components to our advertising mix,” he said, including events and bill insert coupons to Latino viewers. “They’ve offered some non-traditional opportunities we’d probably never see from the broadcasters.”

Related