The Personal Touch
Mediacom's sales sizzle while others cool
By Stewart Schley -- Broadcasting & Cable, 7/9/2006 8:00:00 PM
Memo to anyone applying for a job with Mediacom Communications' local-ad-sales division: Don't plan on getting too comfortable at your desk.
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|Source: B&C analysis of company reports.
The mantra at OnMedia, the ad-sales arm of the eighth-largest U.S. cable company: Those who can sell do sell, including top managers. And especially when it comes to pitching larger retail clients—the 20% of its clients who provide 80% of its revenue.
“Everybody in our business understands the importance of general managers' associating with clients,” says Steve Litwer, group VP of advertising sales for Mediacom. “Where we depart slightly is that we think that not only should you know the biggest clients to preserve that business but you should know there are companies all over town that don't do any business with us. Sometimes our account executives can't even get to them. So our feeling is, [the general manager] should be making the cold call. Go over there and see them. Don't even take an account executive.”
That philosophy seems to work for OnMedia, which roared past other cable operators in first quarter 2006 by registering 17% year-over-year revenue growth from advertising sales (to $13.4 million), nearly all of it reflecting organic growth from “same-store” comparisons of markets.
Mediacom's growth rate compares with an industry average of 3.5% for the six publicly held U.S. cable operators and is nearly twice the pace reported by Charter Communications, the second-fastest-growing cable-ad-sales group. Litwer says Mediacom is pacing for the second quarter at a rate nearly identical to the first.
The nation's largest cable operator, Comcast, registered a 4.4% increase, with first-quarter revenues from advertising rising to $309 million from $296 million.
Two cable operators reported a year-to-year decline in first-quarter ad-sales revenue. Time Warner Inc. said advertising revenue from its cable division dipped 1.7%, to $117 million. Cable­vision Systems Corp.'s ad revenue fell to $23 million in the first quarter, from $24 million in the comparable 2005 period, a 4.2% decline.
OnMedia has its favored tactics that drive revenue. For example, Litwer is a disciple of what he calls “seminar selling,” a program that gathers local business owners in a hotel or conference room for a presentation that may feature a prominent guest speaker along with OnMedia's managers and account executives.
The seminar inspires a sort of self-generated conversational buzz among businesspeople who often have few opportunities otherwise to talk shop, says Litwer. The events commonly generate sales or follow-up appointments on the spot.
For Litwer, though, the real value is what's going on behind the scenes to support a key OnMedia goal: generating new business. “People constantly ask me about this as if it were some kind of a cheap trick,” he says. “But it works. Why does it work? Because it's a system. You take a staff of 10 account executives and ask each one to find 20 business owners who have never done business with us before. You now have a captive audience of 200 decision-makers. You're creating a little club. But it's your club.”
Litwer has personally rung up 300 or more appearances over the past six years in hotel rooms and conference centers from Chicago to Dubuque, Iowa. “These programs always get results,” he says.
Unlike industry giant Comcast Spotlight, which sells local-TV advertising in 22 of the top 25 U.S. markets, Mediacom is consigned to smaller communities, many of them across Iowa and Missouri. “Sixty percent of my markets I can drive to within a matter of hours,” Litwer says. OnMedia's largest consolidated market, Des Moines, ranks No. 73. OnMedia's reliance on local, direct-client business that makes up a majority of its revenue has led Farrand and Litwer to emphasize the basics.
Personal relationships are key. Robert Montgomery, senior director of OnMedia's Des Moines ad-sales operation, says his highest-billing account executive is on a first-name basis with nearly everyone who works at the companies on her account list. “You walk into a business with her,” Montgomery says, “and it's like walking into the Cheers bar and she's Norm.”
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