With ratings down across the landscape, cable networks are looking for new and different ways to work with their advertising clients as the upfront market approaches.
While network sales executives see a strong economy and dollars returning to TV from digital competitors, buyers note that cable might still be squeezed by stronger demand for the perceived bigger reach of broadcast and the targetability of digital.
At a time when viewers are cutting the cord and increasing their over-the-air viewing of broadcast TV and streaming of online content, noncore networks are getting left out of the skinnier bundles rolled out by new distributors.
Similarly, networks with smaller or declining ratings face an uphill climb with media buyers.
“Viewership is down. The long tail of cable will have a problem getting demand,” said one media buyer. “I think it’s going to be a challenging upfront for a number of our business partners.”
Of course, business is good for networks and groups with strong ratings stories for advertisers.
In many cases, the sales operations for major cable network groups have been consolidated into larger units that include broadcast networks. Earlier this year, the Disney-ABC Television Group combined the sales operations for the Disney channels and Freeform with ABC under Rita Ferro.
To some cable veterans, that means cable networks get less priority.
“I think we all just have to fight back, figure out what our brand propositions are, what our values are and in an interesting way, we’ve actually made more changes to set ourselves up for the future than we were doing when we were rolling along with ratings,” said a senior ad-sales executive.
For big media companies, cable is still an important part of the overall portfolio.
“Our goal in the 2017 upfront is to work with our clients to build their brands across all of our assets,” Mark Marshall, executive VP, entertainment sales at NBCUniversal, said. “As you’ve seen, more marketers are becoming disenchanted with digital-only media plans and our partners are asking for more and more premium video, so our entertainment vertical is uniquely positioned to help fulfill business objectives.”
That entertainment vertical includes USA Network, the top cable network in total viewing, and Syfy. Marshall said Syfy is benefiting from its ever-passionate fan base and a stronger investment in original programming.
“Our digital-video offering combines premium video content with the best in advanced targeting platforms,” Marshall added.
Brands Tuning Into NBCU’s Symphony
Earlier this month, NBCUniversal said it was earmarking $1 billion worth of its ad inventory for data-driven, targeted campaigns. It introduced a new product, Audience Symphony, that lets marketers reach their target consumers across NBCU’s entire portfolio of broadcast and cable networks, digital properties and partner companies.
NBCU said it planned to start signing clients up before the upfront gets underway.
Last week, Viacom, Turner and Fox Networks Group announced OpenAP, a new audience platform designed to provide agencies and clients with industry standards for defining target audiences and third-party measurement.
The three members of the OpenAP consortium are inviting other TV programmers to join and expect their initiative to have an impact on the upfront.
“It will play prominently in the upfront,” Viacom head of ad sales Sean Moran said. “All of us have been using advanced targeting in a lot of the deals that we do. They’ve been sought after by key agency holding companies.
“The fact that we’re making it easier for them is going to help folks go down this path in the upfront, so they’re going to be getting to more of their customers in a more effective way,” Moran said.
Added Turner president of ad sales Donna Speciale, “With this happening and simplifying [targeted audience buying], you’re going to see a lot more targeted audience buying for clients now in the television space.”
Programmers holding upfront events this month are mainly in an upbeat mood.
A+E Networks will hold an upfront event on March 21. “I think you’ll see the vision of how cultural insights are going to more and more impact where we’re going to take things editorially,” Peter Olsen, executive VP for ad sales at A+E, said. “It’s a pretty big change for us in terms of how we’re approaching it and it creates a lot of opportunities for marketers.”
Besides selling commercials, A+E has moved into a number of other businesses designed to help advertisers, including a content studio and an in-house ad agency.
“That kind of diversified revenue model is interesting, and I think we’re all doing it,” Olsen said.
Olsen wants the senior-level media buyers and clients attending the event to walk away thinking that A+E is bigger than what their current perception is.
“We’re not just our three core brands,” he said, referring to A&E Network, History and Lifetime. “We’ve invested in some digital content companies, we’ve built in-house resources, from an ad-sales perspective we’ve partnered with Hearst, we’ve partnered with Vice and we’re partnering with some other digital and social content makers.”
Discovery Communications will hold a press event on March 28 before meeting individually with media agencies and clients.
“We’ve taken our content and we’ve built new ad products,” said Ben Price, president of ad sales at Discovery. “We can work with a client, take our IP, push it through all those platforms, along with some branded content with their brands, and we’ve got a structure that can sell across everything. There’s no silos. No digital silo, no linear silo.”
Discovery started making the transition last year. “We’re in a great position as we go into the upfront to really do some strong 360-degree deals,” Price said.
In the past year, Discovery has integrated Anheuser-Busch into its scripted program Harley & the Davidsons on Discovery Channel. It also put Ace Hardware and Delta Faucets into Pet Nation on Animal Planet.
“We’ve got a track record of doing them well,” Price said.
In its upfront presentations, Discovery will emphasize three things: its content, the trust its networks enjoy and the engagement they generate with audiences.
Discovery has a lot of networks, but Price said most of the presentations will focus on the biggest networks, including Discovery, TLC and ID, which have positive ratings stories to tell. “At the same time, we’ve got Velocity and Science, and those truly are super-fan networks. They have people that stay very engaged and they continue to grow,” he said.
Discovery will also play up some of its newer digital products.
“We know the linear side is very important but the growth area for us in many ways is digital,” Price said. With its Discovery Go streaming video app, the company is attracting a much younger millennial audience and that’s creating new opportunities with marketers it already does business with.
In the auto business, Discovery was usually a good vehicle for selling luxurylevel autos and trucks,” he said. “Now we have an opportunity to go for entrylevel cars, the cars targeted to younger viewers.”
For their part, Crown Media holds an upfront dinner at the Rainbow Room for Hallmark Channel and Hallmark Movies & Mysteries on March 29. Business is good.
“I think if you look across the portfolio of cable networks, it’s hard to find those that have a similar story to us in terms of our audience is growing and demand for our product is growing,” Ed Georger, executive VP for ad sales at Crown Media, said. “If I look across all of cable, I do think there’s still a lot of belief and a lot of value that advertisers seek in television, and I think they continue to find a valuable audience in cable.”
Ratings erosion means that available impressions are scarce. “But it does speak to the appetite that marketers and advertisers continue to have for cable because demand is certainly outpacing the supply,” he said.
The Hallmark formula has been successful because audiences these days are looking for feel-good programming, Georger said. “Viewers know that when they get to our channel, it’s very reliable. You know what you’re going to get and our ratings tell us they appreciate what we’re doing.”
Advertisers also appreciate Hallmark’s approach. “The other thing I’ve heard from a lot of advertisers is the importance of delivering their schedules in the weeks and in the months that they planned,” Georger said. “In a lot of places, cable struggles to deliver within that window because of the ratings decline.”
Rising ratings means Crown hasn’t had to be aggressive about data-driven initiatives. Crown has invested in research and offered to guarantee schedules based on sales data, Georger said.
“We don’t want to be left behind in that area, but when the age-sex demographics of our channel and the Nielsen measurement continues to build and grow, there’s less of a need to find another story,” he said.