Operators Need To “Get Close”

CAB chief stresses value of tight customer bonds

Former advertising executive Sean Cunningham had a vision for boosting local cable’s ad revenue when he joined the Cabletelevision Advertising Bureau as its president/CEO nearly two years ago. That vision is taking center stage at the annual Cable Sales Management Conference in Chicago this week.

“One of the differentiators of cable television is the strength and connection to customers, consumers, viewers, as evidenced by the perpetual migration to cable and the dual destination of branded networks and great programming,” Cunningham says. “It’s personal, it’s passionate, and it’s about viewers’ pursuits.”

Dubbed “Get Close,” Cunningham’s theme has become central to all of CAB’s activities, including its day-to-day operations and the sales conference. He is also pushing the idea that viewers don’t distinguish between broadcasting and cable, which is one of the reasons CAB’s Web site is www.onetvworld.org.

Each day, CAB sales teams tout the cable story—including its 54% share of the television audience—in meetings with media planners, buyers and advertisers.

“When I laid out a five-year vision for the CAB,” Cunningham says, “I thought it was critical that you change minds, make an impression and start a real dialogue in groups of 10, 15, 20 people.”

Meeting Face to Face

Kevin Dowell, senior VP of Insight Media and a CAB board member, says meeting face to face with advertisers and agencies is critical for local cable to grow ad revenue. “Decisions are made at the advertiser level,” he says. “So for us to continually talk to the agencies and continually talk to the trade publications and to multisystem operators, and get in a car or in an airplane and talk to people on their turf about their business and issues, is invaluable.”

The Get Close theme has also worked its way onto the Web site, which essentially brings a library of cable facts to media planners and buyers.

And Get Close, as Cunningham notes, is an underlying theme at the CAB sales conference. More than 900 cable executives are attending, along with dozens of agency people. Keynote speakers include Tim Brosnan, Major League Baseball’s executive VP of business.

With the Get Close concept, the CAB is reiterating cable’s strengths directly to decision-makers who place billions of ad dollars into local television.

Cunningham estimates local cable ad sales will top out at nearly $6 billion this year. But that is just over a quarter of the $22 billion local broadcast stations pulled in last year, according to Nielsen Monitor-Plus. And that is the problem—and the opportunity—for the CAB and Cunningham. It is a big pie, and cable is now getting bigger pieces.

Despite local cable’s growth, there remain challenges for it to generate more ad revenue. Perhaps the biggest among these is the dearth of Nielsen ratings for cable networks in local markets.

That has recently begun to change, with Nielsen Media Research’s electronic measurement system, the local people meter (LPM), rolled out in top markets, including New York, Los Angeles and Chicago. In markets where it is up and running, the LPM replaced the paper diaries that are still used in most other markets to collect demographic ratings.

LPM Better Than Diaries

For measuring the cable audience, the LPM typically does a better job than the diaries, in which survey respondents keep logs of TV viewing. In fact, last July, Nielsen found that the LPM in New York picked up 23% more channels than were measured by the diary. In Los Angeles, the number of channels went up 21%; in Chicago, 18%; and in San Francisco, they were up 46 %.

Cunningham says the LPM is more accurate than the diaries, but he adds that Nielsen’s measurement of local cable still has at least one major shortcoming: “What Nielsen [measures] least well, as articulated by the Media Rating Council, is local cable. Thankfully,” he adds, “the local people meter is a great answer [to that]. But we’re deployed in only a handful of markets.”

Another challenge facing local cable is the continued growth of direct-broadcast–satellite services. DBS is now in nearly 20% of homes, and it is growing. It doesn’t carry local advertising, so it doesn’t compete with cable for local ad dollars. It does, however, compete for subscribers. Its continued growth is largely the cause of cable penetration’s leveling off at about 66%. And with Rupert Murdoch’s control of DBS leader DirecTV, many observers believe the cable-DBS war has yet to begin.

Despite that, cable’s audience is growing as viewers migrate away from broadcast TV, says Cunningham. And, he adds, cable interconnects, which group distinct cable systems into one media buy, are making it easier for advertisers to place market-wide campaigns.

“We’re looking at a medium inside television that is looking at year-over-year double-digit growth in ad sales because it is getting ever more audience, which makes cash registers ring and generates sales and floor traffic—whether it’s at auto dealerships or retailers,” he says. “The overall theme is: getting closer to the consumer, closer to the customer and closer to the sale. It’s about the undeniable, fundamental, DNA elements of cable television.”