Small but Powerful

Viamedia handles ad sales for systems with bigger fish to fry

Jeff Carter is building a big business serving small customers —lots of them. Carter is the president and co-founder of Lexington, Ky.-based Viamedia, an ad-selling firm that allows cable systems to tap into its expertise and research, and let cable systems spend their energy selling cable modems and phone service.

And while local-cable ad sales constitute just a sliver of the total TV-ad universe, Carter boasts that privately held Viamedia's business has grown “in excess of 50% this year over last.” Since he formed the company with CEO Todd Donnelly in 2001, it has grown to 135 employees with 11 regional sales offices.

Viamedia mainly serves as the local-cable ad-sales representative for upstart cable operators such as RCN in New York and Boston, WOW! in Cleveland, and Knology in Huntsville, Ala., and 19 other markets. In the business, those operators are called overbuilders, and they compete for ad dollars and subscribers with entrenched cable operators in those markets. Viamedia's cable clients reach 1.4 million customers.

Viamedia is a big help in smaller towns, like St. Cloud, Minn., and Midland, Texas. And when it signs up a new partner, it puts its expertise on the ground fast, as it did with Grande Communications in Waco, Texas, where Viamedia brought in its top sales staff and, in three days, “put more on the books” than the system booked all year, according to Carter.

What Viamedia thrives on is that overbuilders target their services to upscale demos. “These cable systems launched with a bundled strategy, so they tend to move toward those areas of their particular metros that can afford the product, primarily higher-income areas,” Carter says. “If we're representing 10%-15% of a market and General Motors is coming into the market with a Cadillac buy, then it makes good sense for them to consider us part of that buy.”

Viamedia also represents regional news channels, notably the Ohio News Network. That cable network, reaching over 1 million Ohio homes, has its own sales staff but uses Viamedia for some of its business. Altogether, Viamedia's deals with regional news networks gives advertisers access to another 5.2 million homes.

But Viamedia's best value is to cable operators that “choose to focus their energy building new customers and launching new services and getting high-speed Internet and telephony out there in the market. That's where they were going to realize 90%-95% of their earnings,” Carter explains.

Cable operators “don't want to focus 30% of their time on 5% of their [earnings],” Carter says. Viamedia, on the other hand, will gladly take those small potatoes for them.