A rosier prospect

The healthiest segment expects 3%-5% growth in revenue this year
Author:
Publish date:

Despite the gloomy outlook for other media, local cable is expected to enjoy ad growth in 2002, buoyed in part by the Winter Olympics and congressional races. A number of forecasters project a single-digit increase, 3% to 5%.

Local cable will do relatively well because it's affordable and effective compared with local broadcast, especially in medium-size and smaller markets, says CableOne Inc. Vice President of Advertising Sales Ron Pancratz, noting that, in a down economy, local retailers really pinch pennies when it comes to advertising.

Universal McCann Senior Vice President and Director of Forecasting Robert Coen concurs: "Local cable does better than most media. It's cheaper." Jack Myers Report
estimates that local-cable advertising grew 5% last year and will see the same gain this year. Cabletelevision Advertising Bureau (CAB) Vice President, Local Sales and Marketing, Kevin Barry, however, considers Myers'
5% estimate for 2001 too high and 5% projection for 2002 too low.

"For local cable, 2001 was a very tough year," Barry said. "We're going to be close to being flat, or up barely. But we are budgeting for growth this year, in the single digits, in the upper end of that."

The CAB projects that local cable will rack up $3.57 billion in ad revenue this year, 6% more than in 2001.

The medium will benefit from selling local avails during Olympics coverage on CNBC and MSNBC, Barry said. And, for November's congressional elections, advertisers are expected to use local cable to efficiently target districts.

"In terms of the Olympics, we're seeing an awful lot of interest on the West Coast," said AT&T Broadband Senior Vice President of Media Services Judi Heady, citing such markets as Salt Lake City, where the games are being held, Denver and Seattle.

In New York, Rainbow Advertising Sales Corp. is doing well selling the Olympics, according to Executive Vice President, New York Sales, Michael Wach, whose portfolio includes Cablevision Systems Corp.'s local ads and the New York Interconnect.

"The Sept. 11 attack exacerbated what was looking to be a very weak marketplace," Wach said.

He expects automotive to come back this year, as well as banks, financial services, movies and entertainment. Barry and Heady both predict that health-care providers and hospitals will be "hot" ad categories for local cable in 2002. The jury is out, though, on whether travel will rebound for local cable.

<p>Prognosticator</p><p>Prediction</p>

Merrill Lynch

flat

UBS Warburg

+3.0%

Jack Myers Report

+5.0%

CAB

+6.0%

Related