Why Aren’t Ad Agencies Listening to TV Viewers?

A Q&A with Sean Cunningham, president and CEO of the Cabletelevision Advertising Bureau By John P. Ourand It’s been a year since Sean Cunningham became president and CEO of the Cabletelevision Advertising Bureau, which represents ad-supported cable networks and ad-insertable cable systems. During that time, Cunningham has experienced firsthand cable’s decade-long frustration over having rapidly taken viewers from broadcast without having significantly closed the broadcast dollars ad gap. For the first time last year, cable beat broadcast in the full prime-time season (by less than 1 share point). This year, cable expanded its lead to 4.6 share points. As the CAB gets ready for its annual Sales Management Conference (June 6-8 at the Hilton Chicago), there is reason for optimism. Most projections have cable grabbing upfront increases of around 20%, compared to broadcast’s paltry 3% rise. CW: What does it mean for cable that broadcasters only saw 3% increases in their upfront? Sean Cunningham: Every indication is that cable is looking at a really, really big upfront. Certainly the biggest ever. CW: Advertisers complain that younger demos aren’t watching TV anymore—broadcast or cable. Cunningham: That’s a view of television through a broadcaster’s set of glasses. Unfortunately, there still are a lot of people mistaking broadcast for television, which is mind-boggling in this day and age. There are still people who help to shape macro opinions about our industry, who are looking at broadcasting trends and, for some bizarre reason, are ascribing them as "television" trends. CW: With the Internet and video games, certainly kids are spending more leisure time away from TV. Cunningham: There is a precipitous year-over-year drop for the key young male demographic (18 to 24 and 18 to 34) on broadcast prime time. Cable has no drop. It has gained. CW: What’s happening outside of prime time? Cunningham: Young men are redefining what prime time is to them. More often, they start watching TV at 10 p.m. And some of their heaviest incidents of viewing are between midnight and 1 a.m. CW: Broadcasters argue that they still have the sheer numbers for advertisers who want to reach a mass audience. Cunningham: That stopped being true a few years ago. The tipping point on weekly reach has come and gone. We did a comprehensive analysis of cable’s ability to build one-week reach versus broadcasters’ ability to build one-week reach, and it is parity (see chart). In a lot of key demographics, cable has surpassed broadcast in weekly reach ability—against young men, against teens, against kids, even some of the older male demographics. CW: Your conference is going to talk about cable’s "value." What’s that really mean? Cunningham: There is a connectivity, a stickiness, that viewers have. We just underwrote the latest chapter of SRI/Knowledge Networks’ "How People Use TV" study to get a sense of peoples’ attachment to cable and broadcast. The attentiveness, the attachment, the loyalty for cable is categorically higher than broadcast. They like both instruments, but there is a higher connectivity with cable content, both cable programming and cable brands. CW: Are agencies buying this? Cunningham: Absolutely. They get it, with respect to where the audiences are going, and they understand the reasons why. The part that is eye-opening to them is the degree of change—how quickly it’s all happened—and the constant nature of viewers’ attraction to cable. CW: Can MSOs do more on the ad sales front? Cunningham: In terms of their role in the spot television and local television equation, MSOs are changing the face of what’s possible for advertisers and agencies on a DMA and sub-DMA level. Their contributions over the last few years have given advertisers more access, more options and a tighter ability to connect with targets in geographic ways that television has never seen before. CW: In which ways? Cunningham: At the spot cable level, we’ve seen interconnections rise tenfold, from a handful of interconnects in 2002 to more than a hundred already in 2004, and in 90 of the top 100 markets by the end of 2004. The MSOs’ contribution for agencies and advertisers to be able to do one-stop shopping at the DMA level is changing the face of spot advertising. CW: Don’t local ad sales arms still need to be beefed up? Cunningham: The local and zone business grows every year by double digits. That’s because of the ability of the sales forces to move product and activate customers. We’re talking about local retailers who know instantly what’s working and what’s not working. CW: What’s your favorite ad campaign? Cunningham: This is a bit of an advertising industry answer. MasterCard’s "Priceless" campaign is some of the consistently best advertising that’s come around in a long time. And any kind of tune-in advertising for the New York Yankees, for me personally, is the most effective advertising on television. CW: Because the Yankees spots are well done, or because you’re a big fan? Cunningham: You could put the logo up on the screen. The white pinstripes, the midnight blue interlocking "NY"; it’s probably the greatest brand in the world. CW: Where’s summer vacation this year? Cunningham: Montauk, on the tip of Long Island. I’m going to see if my 3-year-old daughter and 2-year-old son have any interest in boats.