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Integrated Marketing and the Promise of Cable

Cable nets can combine several things that marketers are willing to pay a premium for 1/11/2004 07:00:00 PM Eastern

Buy two, get one free" can be an effective sales pitch for supermarkets and amusement parks but not for luxury cars and fashion attire—or cable television networks. Yet, in the name of "integrated marketing," many of America's most valuable cable networks are giving away the store. Not only are they diluting their brand value in the name of short-term growth, but they're missing cable's biggest opportunity: to become the platform on which consumer marketers build real, effective integrated marketing solutions.

Today, many cable nets are combining value-added elements like product placement or sponsorships with ad rotation across multiple platforms, and calling this integration. But their approaches are really little more than plain old bundling. By wrapping freebies together with the time sale, they are diminishing the value of both the creative components and the network time itself. Worse, cable nets risk fueling an "arms race" similar to that in magazines, with value-added extras now offered so extensively that it is increasingly difficult to gauge how much of it results in additional growth.

A large part of the problem is that "integrated marketing" means different things to agencies, advertisers and their media partners. Like "synergy," "stickiness" and "mind share," the term is being overused to defend multiple objectives. Clients want a holistic approach that helps their brands stand out from the clutter while delivering a higher return on investment. Agencies aim to win a larger share of client's overall marketing spend by delivering value beyond producing a TV spot and buying media time. For media conglomerates, integrated marketing is a way to lock in a larger share of clients' overall budgets in an increasingly fragmented media world. For those cable networks not aligned with a larger parent, integrated marketing is a way to differentiate their offerings from larger competitors.

Done right, integration should mean offering marketers value beyond the traditional spot—through product placements, sponsorships, preferred positioning, or off-TV tie-ins, such as online and live events—in a way that delivers more than the sum of the parts.

For example, MTV Networks' "MPEG Us" campaign for Sony illustrates how effective integration can work. MTV helped Sony develop an innovative marketing campaign for its digital entertainment products to reach MTV's younger-skewing, tech-savvy audience during last year's Video Music Awards
using an "MTV 360" approach. Beyond raising the visibility of Sony through promotional spots on MTV, MTV2, and mtv.com, the campaign included a Sony-sponsored contest run on MTV for which viewers submitted 10-second MPEG shorts; the winning shorts received heavy rotation on MTV. Sony's ads ran not only during the August awards show but also as part of a campaign extending through the fall. The rotation of the winning submissions was also woven together with ads from Sony and clips from star acts like Eminem in the same 10-second format.

However, consistently achieving this level of integration has proved elusive for most cable networks, given the historic lack of cooperation among their sales, programming, marketing and back-office functions. The sheer volume of marketing programs that cable networks are managing—as value-added becomes the norm, rather than something that is talked about during the sales pitch but not followed through on by either party—makes it challenging to execute effectively and ensure that the sales generated are truly incremental.

To make matters worse, the way many cable groups deliver on marketing programs and the way they sell "brand-extension" networks—such as Discovery Health, ESPN Classic, or Lifetime Movie Network—are often not well aligned. As a result, buyers lose sight of the benefits of a truly integrated effort, and the networks wind up commoditizing strategic assets that are central to their long-term growth. "Integrated marketing" too often ends up a fancy term to rationalize the bundling of multiple networks' inventory in return for a few extra bucks.

The good news is that cable networks—not broadcast, print, the ad agencies or advertisers' marketing departments—have the best opportunity to lead the charge in integrated marketing as agencies and advertisers increasingly look to leading media players for marketing solutions. Cable networks are well-positioned to win share of the media buy, because they can combine several things that marketers are willing to pay a premium for: targeted demographics, brand equity that can provide a "halo" in reinforcing a brand's own identities, and a deep understanding of their audience's psychographics. Cable goes beyond reach and frequency, targeting viewer's passions.

To drive true incremental growth from integrated marketing, cable networks must focus on three objectives: (1) targeting integrated campaigns to those ad buyers willing to spend significantly more; (2) creating value through real integration; and (3) aligning the organization and sales processes to execute integrated-marketing campaigns more smoothly.

In our experience, several themes have consistently emerged when developing plans for advertisers to offer more customized marketing pitches. First, different programming options are better suited for different types of advertisers. For example, "event" programming is often best for advertisers focused on product launches while series sponsorship is often better for those focused on brand building. Ad sales can therefore work proactively to better match the menu of potential options with the advertisers most likely to commit incremental business or pay higher prices.

Networks must also be selective in the number of customers for whom they take an integrated marketing approach. There is a natural limit to how many highly customized marketing programs a network can effectively deliver. By treating their offerings in a more modular way, networks can also capture more scale benefits, providing extensive customization only where merited while still providing the rest of the customer base with opportunities to participate in more "standardized" marketing programs.

An effective integrated-marketing strategy requires a more collaborative relationship with the agency and a clear understanding of the advertiser's brand objectives. Effective campaigns can take three to six months to execute. Maintaining a sufficient level of focus over the required lead-time often requires a transformation of planning processes, incentives and internal tools to facilitate collaboration between sales and programming. At the end of the day, the network needs to ensure that it delivers a turnkey solution to the customer.

Cable will continue to take share away from broadcast; viewing trends and the huge supply of highly targeted impressions on cable will guarantee that. But, if cable-network owners move beyond their traditional, short-term focus and work to get integrated marketing right, they can leapfrog other media and become the partners for which consumer marketers yearn.

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