You'd Better Shop Around

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When sales executives employed by MSOs and interconnects talk up the ad categories that are key to bolstering their results, automotive is perennially at the top of the list.

Asked for a rundown of local cable's top categories, Cabletelevision Advertising Bureau vice president of local sales and marketing Kevin Barry said, "It's automotive, automotive and then automotive."

But while there aren't any hard ad-spending statistics available for local cable, Barry said, various forms of retail combine to represent the second-strongest sector for the medium.

As regional and even national retailers secure local flights — and mom and pop shops buy schedules — the store that is key to every community generally does not run many spots, if any. Even as local cable makes inroads into other retail sectors, supermarkets and grocery stores have remained elusive to many local-cable ad executives.

Grocery is indeed difficult to break, said Cable One Inc. vice president of ad sales Ron Pancratz. "Always has been, except for a store here or there," perhaps an outlet promoting a store opening. "But not a chain."

Grocery stores represented just 1% of Insight Communications Co.'s local volume, said vice president of ad sales Kevin Dowell.

The supermarket business "generally has been a tough category to crack," conceded Comcast Ad Sales senior vice president Hank Oster, with consolidation in that retail segment not helping matters much. "[It's been] very good in some areas, little in others."

"There are fewer players, and [consequently] less competitive advertising," said Oster.

"We have not had much success" with grocery stores, said Cox Communications Inc. vice president of ad sales Billy Farina. He said he hopes new technologies would help the MSO make inroads.

Habits die hard

In part, Barry said, grocery stores have been a tough sector to open because for decades, those retailers have been geared toward advertising in newspapers. He likened any progress being made to "water on a stone."

Major marketers like Kraft Foods and Procter & Gamble Co. spend heavily on TV, but they also spend lots on free-standing ad inserts in Sunday newspapers. That's done mainly to get consumers to try their products, with cents-off coupons as the incentive.

It's because cooperative dollars tend to gravitate toward newspapers that "grocery continues to be a challenge," noted Charter vice president of ad sales Jim Heneghan. He described the practice as "going with the horse they've ridden a long time."

But Cox's Farina disputed the premise that these stores are locked into newspapers by habit. While that category has been heavily committed to that medium for decades, he pointed out that that's been true of many other categories as well.

"Perhaps we haven't told our story well enough," he said. For instance, grocery retailers may not be aware of the speed with which copy changes can now be made by cable systems, thanks to digital ad-insertion gear — thereby making that "a non-issue."

To Farina's point, that message evidently needs to get hammered home even more frequently. Several of the executives contacted for this story said grocery stores still refer to cable systems' onetime inability to make quick-turnaround copy changes, and seem largely unaware of strides cable has made in that area.

Supermarket success

Not everyone, though, has succumbed to the difficulties in surmounting the longstanding obstacles to doing business with grocery retailers. Executives at Adlink, the Los Angeles interconnect, Time Warner Cable and Rainbow Advertising Sales Corp., for instance, have made some inroads with supermarkets.

"We haven't found it hard to crack the grocery business," said RASCO president David Kline, citing buys from New York City-area chains Pathmark and ShopRite. The problem is that neither has had much of an ad budget in the New York DMA of late, he said.

For Adlink — whose fastest-growing categories through first quarter included retail (up 89%) — vice president and general sales manager Rick Oster said the grocery-store segment "has traditionally been a struggle."

But ad dollars have started to follow the audience to cable, he noted. Grocery jumped 25% in first quarter, according to Oster, with Foster Farms among the rep's new-to-cable customers.

Time Warner Cable president of ad sales Larry Fischer pointed out that the grocery sector has historically also posed problems for broadcast TV.

"Grocery is not a strong category for TV generally," he said, "although some are more progressive than others, like Wegman's [in upstate New York]."

Vendor push fizzled

Efforts to improve the industry's position with supermarkets haven't necessarily yielded all that much fruit.

CAB's Barry praised Turner Network Sales' latest vendor-program efforts in 2002-03 as "on the right track." But TNS vice president of local ad sales Jerry Ware said the year-long initiative that targeted grocery stores was disappointing.

The grocery category is "particularly hard for cable," said Ware. That's why TNS developed a vendor program two years ago, linked first to Turner Network Television and then, in the past year, to TBS Superstation.

But after some success at pursuing retailers in general in 2001, Ware said he could offer no update on TNS' 2002-03 follow-up vendor efforts — with a sweepstakes linked to TBS's "Dinner and a Movie" franchise — because "affiliates had no success in selling through. Newspapers have such a hold [on this business] that it will take more time."

But TNS still is making its vendor program available to interested affiliates, he noted.

Echoing the earlier edicts about accelerating the learning curve, Ware noted: "Cable needs to educate the grocery business on its ability to turn around fast" on price changes, due to digital-insertion technology.

That ability has vastly improved in recent years, so "we need to bring them up to speed," he added.

So has the ease with which media buyers can buy cable time, due to interconnects that have brought one-stop shopping to numerous key markets, Ware added.

For its part, Lifetime Television affiliates have delivered grocery ad sales with its public-service campaigns, vice president of affiliate ad sales and distribution marketing Tracy Barrett said. Its breast-cancer awareness drive brings not just hospitals but banks and grocery stores — "everywhere women are," as she explained.

Nickelodeon has found at least one vehicle that appeals to the grocery trade: the annual April Kids' Choice Awards, whose national sponsors included Kraft Foods. That program and network, given their solid kid and family appeal, also pull in clients from a wide range of other sectors — from apparel retailers to healthcare and insurance, MTV Networks vice president of affiliate ad sales Jason Malamud said.

Elsewhere within MTVN, he said, furniture was "by far the No. 1 [local] category" in the recent TV Land Awards special, in terms of percentage. Consumer-electronics stores were among the other leaders.

Other retail categories

Another family-oriented service, Hallmark Channel, also claims success with a wide spectrum of clientele. "Hallmark is almost an all-purpose network when it comes to categories," senior director of distribution services Rita Caprino said, citing local successes with everything from financial planners to lawyers to another class of retailers, gardening accounts.

National Cable Communications executive vice president Andrew Ward said that other retailers, including appliance and consumer-electronics stores, have performed well this year. NCC also has had traction with home-furnishings and home-improvement outlets, as did Charter, according to Heneghan.

Insight's Dowell also said department stores and home-furnishings outlets were strong spenders this year.

Pancratz added, "We got some nice contracts with retailers, especially furniture."

In the Time Warner camp, Fischer also gave the thumbs up to that retail segment.

RASCO's Kline, who put sales growth at the New York Interconnect, its systems and the News 12 networks at "double-digit" so far in the second quarter — said part of the gain was being fueled by increased spending on the interconnects from Macy's and Men's Wearhouse.

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