Real numbers needed
Old measurement problems persist as cable tries Boston test of new system
By Deborah D. McAdams -- Broadcasting & Cable, 6/4/2000 8:00:00 PM
The wonders of interactive television are painted as an advertiser's dream, but ask buyers what they really want and the answer is good old-fashioned numbers. Give us reliable measurement, they say, and watch the local cable-advertising pot grow dramatically.
That's not to say the current growth rate is measly. The dollar amount spent on local cable is growing by 25% to 35% a year, according to Joe Ostrow, president and CEO of the Cabletelevision Advertising Bureau.
The CAB's 2000 projection puts local cable ad spending at $2.87 billion. That's money in operators' pockets in exchange for minutes forked over by the proliferating cable networks.
But another $5 billion is being lost in the haze of marginal local-measurement systems that rely primarily on diaries or meters, Ostrow said. The problem with diaries is that people tend to get slack about what they report. Meters, in turn, indicate only household numbers and no demographic information.
"Translated, local loses as much as 40% of their numbers in measurement," Ostrow said.
Measurement is just one of the issues to be examined at the CAB's annual Local Cable Sales Management Conference in Denver, running through today.
Nielsen Media Research, the pre-eminent source of audience measurement, is trying to address local-measurement discrepancies by testing local peoplemeters in Boston in September. Digital and interactive technologies may also help with numbers in the future, but that doesn't help buyers today.
The CAB is compiling case histories of businesses that registered an immediate uptick in traffic when ads appeared on cable. That direct-response method works well for local car dealers advertising in their hometowns but less well for national advertisers buying local or regional spots.
Howard Nass suggests an approach once used by independent TV stations: cuming.
"Let's say there's a market where the sample size is 200 homes. Let's say a show does a 1.0 rating. That means two of those households watched. If somebody went to the bathroom, we're in deep doo-doo," he said. "But if nine networks cumed to a 9 rating, that means that, of 200, 18 watched cable. Now I have a number to work with."
Nass said he would then buy across a group of cable networks in a given time to hit the cume.
Cume might work for general entertainment networks but not so well for more-targeted nets, Bonita LeFlore pointed out. LeFlore is executive vice president and director of local broadcast for Zenith U.S.
"The benefit of cable is that you're able to cut up geography and format, almost like radio," she explained, "so if you're buying women 35-plus, there would be a group of networks you would want to cume. But you'd be pulling in smaller, weaker networks, and a lot of smaller networks might not take local inserts."
The buyers' other major gripe about local cable is an old one: Tracking and billing is sloppy. Broadcast stations bill 15 to 30 days after a spot airs, usually when it was supposed to. Cable operations take 60 to 90 days, and the rate of discrepancy, or spots run at the wrong time, is more than 30%, say buyers.
At Nass' firm, about 90% of the money spent on local advertising goes to broadcasters; cable gets about 10%.
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