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CAB Plans Big Research Push

CEO Cunningham seeks to prove cable strength, cancels February confab 11/02/2003 07:00:00 PM Eastern

The cable industry's new top pitchman, Cabletelevision Advertising Bureau President and CEO Sean Cunningham, says advertisers and agencies are nearing the "breaking point" for paying a premium for broadcast television. What they will make a break for, he thinks, is cable.

Toe-to-Toe Television
The CAB commissioned a study into how viewers perceive cable and broadcast television
Perception Those who think they're 'About the Same' Those who think one is better
SOURCE: CAB, Insight Express
Fewer commercials 60% 35% cable 5% broadcast
Programs that speak to me 55% 35% cable 10% broadcast
Appointment viewing 68% 20% cable 12% broadcast
Better selection 40% 55% cable 5% broadcast

He wants to prove that conclusively. So much so that, for one year only, CAB is diverting funds it once used for its annual conference to conduct new research to fortify cable's position. "We've got 'more for more,' and the competitor in the market charges 'more for less,'" Cunningham said.

During the summer or in the TV season, cable ratings prove that viewers will watch as much—if not more—cable than broadcast. "Through the first five weeks of the fall season, ad-supported cable's audience grew 2.1% to a 46.5 rating, compared with a year ago, while the seven broadcast networks slipped 1.3% to a 52.9 rating." But getting media buyers to break their habits and redistribute money has proven difficult.

In recent years, cable nets have raked in increasing ad dollars, but that's a result more of increased spending than of reallocation.

But Cunningham says the mood is changing. He predicts the fourth quarter will be a key test.

Since joining the CAB in June, Cunningham has been on a 100-day fact-finding mission, surveying cable and advertising executives. He recently got approval from the CAB board to initiate his own cable campaign.

"People weren't updated on the realities of how cable has changed," he said. For example, he was surprised that many media planners and agency executives didn't realize there are 72 interconnects in key DMAs or that the number of ad-insertable networks keeps growing. Also, people thought there was more clutter on cable than broadcast.

And yet media buyers and planners are buying cable by the billions—about $6 billion in last spring's upfront alone.

To combat the misconceptions, CAB plans to triple spending on research. To pay for it, the organization will put its annual conference on hold for a year. It will still hold regional meetings and organize more small gatherings, he said. The cable networks pay for the national conference but instead will put that money into the research next year.

The research will focus on three areas—the CAB's "triple play," Cunningham calls it. CAB will (1) look at Nielsen data supporting cable as a replacement for broadcast in prime time; (2) commission consumer-based research on how cable is used; and (3) crunch numbers to show the positive return on investment for cable advertising.

"I know from having been an agency person, there is a great story here," said Cunningham, who was most recently executive vice president and managing director for ad agency Universal McCann, New York.

His timing may be good. The broadcast networks have had a lackluster fall season, with no new hit emerging. Frustrated advertisers and buyers may be more receptive to cable. Even if more dollars shift to cable, though, the broadcast networks still command a much higher cost-per-thousand (CPM), and the price gap has been widening in recent years.

Cunningham contends that cable's growth story will help narrow CPM parity. "This is a medium in a success cycle, in a growth mode, with great ROI. You should pay more. The behavior that is becoming less defensible is paying more for less," which he contends is the case with broadcasting.

Cable's recent string of hits—from Queer Eye for the Straight Guy
on Bravo to FX's Nip/Tuck—help support Cunningham's claims. Queer Eye, a cable show, has been so hot that it replayed several times on NBC, including a recent Friday night. And after a strong debut in the summer, Nip/Tuck
remained solid into the competitive fall season.

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