How To Lasso A Local Ad
Cable networks offer new incentives to operators
By Stewart Schley -- Broadcasting & Cable, 10/1/2006 8:00:00 PM
As cable-TV networks work to help their affiliates sell local advertising time, the channels are changing the ways in which they try to provide ad support.
All cable operators get local time to sell within most of the cable networks they carry. Those networks try to drive local sales by offering promotions, contests and advertising opportunities.
The motivation is simple: They want to keep cable operators happy, and the local promotions help overall viewership.
Now video-on-demand (VOD) advertising is gaining some traction in the local-cable ad arena. A case in point: Rainbow Media had an alliance with Comcast Spotlight over the summer to offer an ad-supported, on-demand version of AMC's popular original film Broken Trail, starring Robert Duvall.
Within the movie, Comcast embedded three commercial breaks containing a seven-second “billboard” for local advertisers along with a 30-second commercial for a local advertiser.
Comcast Spotlight says it generated revenue “in the high six figures” from a six-market exhibition of the movie over Comcast's VOD platform.
Likewise, cable companies in more than 50 markets will take part in an October promotion tied to Sci Fi Channel's Battlestar Galactica series, according to NBC Universal VP of Affiliate Ad Sales Brian Hunt.
The promotion awards a trip for two to Seattle for a cast party and a visit to the Science Fiction Museum and Hall of Fame for each of the top 25 TV markets participating. The same prize is awarded to one winner from a pool of smaller-market affiliates.
The Galactica effort also includes that VOD hook: NBC Universal has teamed with Comcast and Time Warner Cable to offer a free on-demand presentation of the series.
Cable networks recognize that hyping their own promotions now sometimes gets in the way of cable operators' trying to sell new phone service or high-speed Internet bundles to customers. Hunt sees more cable operators using time to hawk their own new products.
Hunt's solution: Join forces. For the November VOD debut of the Universal Pictures movie The Breakup, starring Jennifer Anniston, NBC Universal is supplying its affiliates with a series of “taggable” ad spots that feature dating tips from Bravo TV personality Jay Rodriguez. Taggable spots usually consist of 20 seconds of network promotional content, such as the dating tips, and leave 10 seconds for local-sponsor references. That way, affiliates accomplish two goals at once.
“A lot of times, there are inventory pressures,” says Hunt. “The VOD guy wants to promote the movie, and if the ad-sales guy can sell a sponsorship, it helps both departments.”
The sort of taggable spot used for the Breakup promotion remains a staple of affiliate ad-sales support. An example: Turner Network Sales last week said it's making available for the rest of 2006 a series of taggable spots featuring CNN and Headline News personalities. The spots will offer health and weather-preparation tips.
“We hear it all the time from our affiliates: They want great taggable spots,” says Kathy Newberger, director of affiliate ad sales for Rainbow Media.
She says some affiliates favor commercials that leave more time for local-sponsor references than traditional 20-second/10-second formats provide.
They're going to get it. For an upcoming WE promotion that involves local casting calls, Rainbow Media is reversing its ratio. The taggable spot will feature just 10 seconds of network promotional content, and the cable operator gets to peddle the remaining 20 seconds.
Those taggable spots are a staple of the local-cable ad-sales business. But some wrinkles are developing. Cable-network executives say operators are becoming more cautious about devoting local ad time to so-called cross-channel commercials. Those are taggable commercials, let's say for CNN, that the cable network gives away to local cable operators to run on any channel. The cable system's incentive to run them is that it once again gets a 10-second window at the end of the spot that it can sell to local advertisers.
Getting bang for the buck
But now some cable operators believe that's not getting much bang for the buck.
“I think they're applying a rate to [cross-channel inventory], assigning a value to it and evaluating what's being received in return for it,” says Kurt Greves, VP of affiliate advertising for Rainbow Media Holdings LLC, which offers cable affiliates local ad time on its AMC and WE: Women's Entertainment networks.
In the past, he says, some networks profited from the relatively loose control that cable operators exerted over cross-channel inventory.
“There were windows for abuse.” Now, Greves adds, “the operators have definitely reeled that in.”
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