Top MSO Comcast Corp. is renaming its advertising-sales unit Comcast Spotlight, and putting more marketing dollars behind its effort to get cable a bigger share of the ad-sales business.
A major goal of the new branding and marketing campaign is to help narrow the divide with local broadcasters, which generate more ad revenue from selling local spots than cable operators, said vice president of marketing and communications Vicki Lins.
Comcast also wants to show off its ability to let advertisers insert ads on local cable systems through regional and national media buys, and is eager to help programmers generate ad sales for on-demand programming.
The new brand also has some practical benefits for Comcast, which after its merger with AT&T Broadband, has operated advertising interconnects under several different monikers, including AT&T Media Services, Cable Advertising of Metro Atlanta and Metro Link. Until today, the MSO's ad-sales unit was known simply as Comcast Advertising Sales.
"We're really pushing to build a new media brand for Comcast, and post-deal, the size and scope of our business allows us to compete on an entirely different level with broadcasters than has ever been experienced in the spot cable arena before," Lins said. "We felt that rebranding would signify change and would signal to clients that spot cable is not what it used to be, and neither are we."
Comcast touted local ad sales reach as one of the key benefits of its acquisition of AT&T Broadband.
In 2003, Comcast generated about $1 billion in local ad sales. Comcast Corp. president and CEO Brian Roberts and Comcast Cable Communications Inc. president Steve Burke have set the bar high for their ad-sales crew, looking to double local ad sales revenue to $2 billion by 2007.
The ways in which Lins said Comcast Spotlight would work to meet those goals include:
- Interconnecting its 72 cable markets and teaming up with operators that own adjoining systems to create "one-stop shopping" for advertisers.
- Rolling out new segmentation products that will allow Comcast to target ads to subscribers based on where they live, how much money they earn and their spending habits.
- Adding advertising to video-on-demand content and rolling out ITV advertising applications.
Looking to boost its targeted advertising capabilities, Comcast has rolled out two products from New York-based technology firm Visible World. The vendor's Adtag application allows Comcast to run 25-second ads in a market, and add five-second tags to the spots that direct viewers to the closest retail location that sells the product featured in the commercial.
Its Adcopy application lets the MSO run unique commercials simultaneously on the same network. For example, that would allow Comcast to send viewers in an area of a system populated with families an ad for a minivan, while subscribers in a part of town dominated by singles and couples with no children would see a spot for a sedan.
Comcast owns an equity stake in Visible World.
Adtag and Adcopy are available in New York, Chicago and Detroit, and Lins said Comcast will roll the targeted advertising products out to Philadelphia, Boston, San Francisco, Dallas and Denver by the middle of the year.
Comcast is testing different models for VOD advertising, and Lins said the company is holding high-level talks with ad agencies to find the best ways to add advertising to VOD content.
She said Comcast is considering wrapping advertising information around VOD content and forcing subscribers who are getting accustomed to fast-forwarding through commercials to watch the ads.
"Common chatter is that consumers don't want to see ads. That's not necessarily true. Research shows that consumers do want to see ads that are relevant to them," Lins said.
Lins cited one model that might appeal to subscribers who saw a preview for a James Bond movie that featured a BMW Roadster. The ad could include an interactive-TV trigger that would allow the viewer to click a button on his remote control for more information about the car.
Comcast Spotlight, which has 3,200 employees, operates advertising interconnects in 55 of Comcast's 72 markets.
Lins said Comcast's focus on the interconnects helps it compete against the wide reach of local broadcasters by allowing advertisers to cut media buys for local systems in deals that are regional and national in scope.
Comcast generates about half of its ad revenue through local deals, and half via regional and national agreements. Lins said the MSO expects to generate more revenue in the future through broader agreements with advertisers.
"You'll see the percentage of our revenue coming from the local retail business dropping," Lins said. "It's just the shift in revenue dollars because clients who buy an entire market or multiple markets are paying substantially more for it, so the big revenue growth opportunity is on the regional/national levels of our business."
Comcast has a long way to go to narrow the advertising revenue divide with local broadcasters. While cable operators generated about $4.6 billion in local-ad revenue in 2003, TV stations raked in about $13 billion in ad revenue, according to estimates from the Cabletelevision Advertising Bureau.
Local broadcast spots are a better buy for advertisers because broadcasters can offer media buyers a wider reach at a lower cost per viewer, said Gary Belis, a spokesman for the Television Bureau of Advertising, which represents TV stations.
"The per [person] cost of reaching a viewer [on cable] is much higher than reaching a viewer on local broadcast," Belis said. There are also a limited number of spots available on local cable, Belis maintained.
Lins said Comcast will look to shift ad dollars from broadcasters to Comcast systems by improving its research capabilities and working with organizations like the CAB to provide advertisers with accurate information on the reach offered by local cable avails. Comcast Spotlight also plans to run a year-long ad campaign in media trade publications and newspapers such as The Wall Street Journal and The New York Times, along with billboards and Internet ads.
"The key message is that spot cable is not the industry that it used to be, that we've changed and evolved, and with all of that growth has come opportunity, and the biggest and best opportunities for advertisers are with cable and not broadcast," Lins said.