Yes, local cable advertising continues to grow at a nice clip. But the number of ad-supported networks competing for the attention of advertisers and affiliates is also rapidly increasing.
To stand out from the pack, Rainbow Media has taken an unusual step for a national programmer: to establish a local ad sales operation that will work with system operators to expand local ad sales for its AMC movie channel and WE: Women's Entertainment network.
Local cable ad sales jumped from $1.7 billion in 1996 to $4.3 billion in 2004 and are set to jump by 15% this year to nearly $5.0 billion, Kagan Media and the CAB estimate. But the business is highly complex, and few national programmers have tried to move into the labor-intensive local sales sector—so Rainbow is trying to introduce them.
Kurt Greves, VP of affiliate advertising at Rainbow Network Sales, who will spearhead the programmer's new effort, launched a pioneering local ad sales operation in the early 2000s while he was working for Comedy Central. But that operation folded in 2003 when Viacom consolidated its network operations and laid off a number of employees.
“Most networks just don't have the time to devote to this,” Greves admits. “It is a lot of work, but the potential payoff is huge.”
Part of that payoff will be better relations with local operators and advertisers. “I see my role as taking the networks out of the clutter of the local sales environment,” Greves explains. “With all the networks, you have to give account executives some good reasons to select your network.”
Greves believes that, by working with cable companies, Rainbow's national sales staff and rep firm National Cable Communications, Rainbow can assemble packages to help affiliates increase their local ad sales revenue.
Although the affiliates will keep the local ad revenue, the alliances will allow AMC and WE to offer advertisers more-attractive packages, thus boosting their sales efforts. Better relations with both affiliates and advertisers creates new opportunities to “enhance the visibility of our brands at a local level” with customized promotions and marketing campaigns, Greves says.
Kathy Newberger, director of affiliate advertising, will report to Greves at the new division.
The move into local sales is part of a larger reorganization and expansion of Rainbow Media's affiliate relations and sales efforts, says Todd Green, who is Greves' boss and the VP of affiliate marketing at Rainbow Network Sales.
Earlier this year, all the affiliate and ad sales operations for Rainbow's AMC, WE, the Independent Film Channel and video-on-demand operations were consolidated into one operation headed by Gregg Hill, president, distribution, Rainbow Network Sales.
“Having the affiliates and sales operations under one roof has made it much easier for us to serve the operator's needs,” says Green. Given the increased importance of the growing local cable ad business for the operators, “adding local ad sales was the logical next step for us.”
The new division is just beginning to talk to affiliates and therefore has yet to announce any deals with advertisers.
Green says Rainbow will also be working closely with affiliates to provide them with customized packages to better promote such upcoming programming as AMC's Monsterfest and WE's McLeod's Daughters.
He adds, “The new infrastructure gives us an additional mechanism for local outreach.”