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How To Lasso A Local Ad

Cable networks offer new incentives to operators 9/29/2006 08:00:00 PM Eastern

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.

Joining forces

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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