Broadcast Ad Gap? No Problem, Cable Nets Say

Cable networks are desperate to narrow the CPM gap between them and the broadcast nets. But these same networks aren’t planning anything special going into this upfront season. It’s still business as usual. By John P. Ourand Ad sales executives at cable networks are confident that this will be the year that cable finally begins to take prime-time ad dollars from the broadcast nets—so confident, in fact, that they aren’t preparing any special presentations to lure the ad dollars away from the broadcast nets. In the run-up to this spring’s upfront, the cable networks we contacted aren’t doing anything new or different to force a narrowing of the ad gap that has seen broadcast take 70% of prime-time ad dollars, even though it commands less than 50% of the ratings. Instead, they are: Ad buyers, disappointed by last year’s underperforming, overpriced broadcast fare, are bound to adjust their spending patterns to reflect ratings reality, the cable networks suggest. All they have to do is keep doing what they’ve been doing and fan the flames of the buyers’ anger. “I really think this is the year,” says David Levy, president of Turner Entertainment Group Sales and Marketing. “At 17% last year, broadcasters had the largest CPM increase they experienced in quite some time. But they’ve under-delivered. They’ve canceled high-profile shows. It’s really set broadcast back.” Tim Brooks, Lifetime’s EVP, research, also looks to fuel the anger of media buyers, commenting: “Agencies have let broadcasters hijack this and taken them to the cleaners.” Steve Gigliotti, EVP, ad sales and emerging media, at Scripps Networks says ad buyers are being open about their anger over the broadcasters’ under-performance this year. “We’re talking about the cost of broadcast and the efficiency of broadcast,” he says. “We’re not the biggest network. But we’re efficient in targeting our demos [women, 25 to 54]. The biggest way to shrink the gap is to convince advertisers to get the most efficient buy.” Broadcasters are beginning to take notice. With its plumage drooping, the Peacock network’s entertainment czar Jeff Zucker is taking the unprecedented step this summer of launching the majority of his 2004/05 fall schedule directly after NBC’s Olympics coverage ends. (Zucker also keeps swiping Bravo’s hit series Queer Eye for the Straight Guy for NBC, as he did on Super Bowl Sunday.) The WB and Fox are also launching their new programming during cable’s traditional summer launchpad instead of in late September, a factor which underlines how the television landscape is changing—and why more and more cable programmers are touting the need to buy and sell ad time in one TV marketplace. Cable’s Pitch
Turner calls it the “One Television World.” The Cabletelevision Advertising Bureau calls it “Big Time TV.” Lifetime refers to “Brand Resonance.” Each cable network has a different name for the 2004/05 season pitch they are making to advertisers before this spring’s upfront selling season begins. But the messages they are sending to the agencies are virtually identical: There should no longer be any distinction between broadcast and cable TV, and media buyers need to start treating cable and broadcast nets equally. Or, as CAB president and CEO Sean Cunningham says, “Television is television.” Already, that movement has taken hold in some areas, notably at ESPN/ABC Sports, which are being packaged together, and NBC, which sells its broadcast net alongside its cable networks. While most cable networks aren’t being positioned with broadcast networks, they are pushing for ad agencies to treat broadcast and cable equally. The belief among cable sales execs is that the agency executives are the only ones who see a difference between cable and broadcast television. “If clients looked at it and saw it as a one-television market, they’d get a bigger bang for their buck. We want to be on the same playing field as everyone else,” says Turner’s Levy. According to the cable folks, this view is starting to take a stronger hold in the ad-buying arena. “I’m seeing very little quarrel with the one-television view in the marketplace,” Cunningham says. Lifetime’s Brooks agrees: “There’s a whole generation of decision makers on the client side that were brought up on cable—that grew up watching Nickelodeon. It has to break down over time. There’s no way, a decade from now, that you’ll continue to see this gap. No way.” On the news side, CNN Ad Sales’ COO Greg D’Alba predicted that some networks will begin to get out of the news business as they lose leverage power in the upfronts. “When will they lose that leverage? It could be within the next year. We certainly feel that trend,” D’Alba says. “It’s not wishful thinking—it’s practical thinking. It’s eventual. Major advertisers and buying companies are putting too much revenue against a medium that’s downturning.” All About Me
Rather than pushing cable as a whole, each network is pitching its unique strengths to the ad buyers. Dovetailing from last year’s Millennium III analysis tool that showed cable as an adequate substitute for broadcast television, Turner is presenting sponsorship opportunities that broadcasters can’t match. Levy points to Johnson & Johnson movies, Lowe’s and Kia sponsorships and last year’s NBA/The Hulk deals on TNT. “We are a 24-hour, seven-day-a-week program network,” Levy says. “Broadcasters are blocks of program time. We can promote and offer sponsorship opportunities throughout the day.” Lifetime is naturally pushing its brand image, which Brooks says is strong in the “four pillars” of consumer behavior: loyalty, attachment, community and engagement. “Cable has an advantage in the brand environment over broadcast,” Brooks says. “In a cluttered media environment, with TVs and remotes, our commercial setting is more likely to be watched and believed. Some networks can really bring this issue to the table. Broadcasters can’t. This is something we can document to buyers.” To that end, Brooks is pushing the fact that Lifetime’s targeted demo—women 18 to 49—stay with the network much longer (an average of about 25 minutes) than they do with other nets. “With that average, they will definitely stay through at least one commercial break,” he says. And Scripps is pushing its targeted demo as the best place for advertisers. “We reach a targeted audience,” Gigliotti says. “There’s still a need to be as efficient as you can be. Targeted audiences are more efficient.” An election-primed CNN is pitching the vast scope of its offerings, having signed five advertisers (including Chrysler) to run multiplatform deals across its TV nets, websites and print magazines (such as Time). “We provide multidimensional, multiplatform marketing partnerships,” says D’Alba. “There’s a similarity of content across the board.”