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CYNOPSIS MEDIA PRESENTS: Upfront Special Report – Advertising in the Cable Market
By Randee DawnYear after year, cable networks have proved adaptable and nimble in developing content and attracting ad dollars; 2013 was the third consecutive year that cable outstripped broadcast for ad dollars. It’s a streak likely to continue once upfronts conclude in May.
But cable network executives are not yet doing a victory dance. The $10.2 billion in upfront commitments the Cable Television Advertising Bureau reports that ad-supported cable networks earned from 2013-14 funnel into dozens of networks, while the $9.15 billion the big five broadcast networks (including The CW) took in for the same period only has to feed, well, five.
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FROM AMC STUDIOS
RICHARD LAGRAVENESE & TONY GOLDWYN
"You have to eat someone else’s pizza," says Bruce Lefkowitz, EVP, Fox Cable Entertainment Networks. "Cable budgets aren’t growing the same way they did in the 1990s. Last year, there were eight slices in the pie and we got one slice. This year, the company says we need one and a half slices, but the owner is still only making one pie. So you have a lot of people eating each others’ pizza."
And while cable networks may be flexible in finding ways to appeal to buyers, the overarching challenge is finding a way to prove consistent, aggregate viewership across multiple platforms to ad buyers. "It’s about, ‘How do we all get our arms round the fragmented viewing of linear product?’" says Horizon Media’s Dave Campanelli, SVP, director of national TV. "It’s important for networks to protect the ecosystems of their products, and not let them get lost across different outlets."
Naturally, this competition has led to a lot of out-of-the-box thinking. Networks now routinely creatively ally with advertisers for individualized ads (think Geico’s gecko on a Viking ship, tying in with History’s Vikings). Other ideas that have enticed buyers recently include event-ized, live programming, adjunct web content and roadblocking series across a cable channel family’s networks (think Cosmos on ten 21st Century Fox nets, including Fox, FX and National Geographic).
"Advertisers are looking for something that gives them an association with the show," says Arlene Manos, AMC Networks’ president, national ad sales, pointing to how The Walking Dead theme was featured in a Microsoft ad, or a tie-in between Portlandia and Subaru that resulted in in-show product placement and Subaru-sponsored webisodes.
For Scripps Networks, the ads in its 2000+ hours of live programming each year are so targeted that viewers don’t see them as intrusions. "(Our viewers) like the advertising," says Jon Steinlauf, EVP ad sales and marketing at Scripps Networks Interactive. "There’s an interest in the advertiser as resource, as opposed to it being clutter and interruption." At Scripps, he says, ads are "vertical print models," the way they are in magazines. "Some people buy magazines for the advertising," he says. "We have that same quality."
Other networks focus on branding first and foremost: Hallmark Channel has successfully colonized the holiday space and earns the network record ratings and top demo slots for "Countdown to Christmas" programming, including 12 original Christmas season movies in 2013. "Events like ‘Holiday’ are a marketer’s dream," says Bill Abbott, president and CEO, Crown Media Family Networks. "What better brand to associate yourself with than Hallmark?"
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MARRIAGE BOOT CAMP REALITY STARS REALITY TV BROUGHT THEM TOGETHER.
REAL LIFE MAY TEAR THEM APART.
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TANISHA AND CLIVE (BAD GIRL’S CLUB)
GET A SNEAK PEEK!.
Brand is also on the mind of networks like Turner, which partnered with the Funny or Die website last year to give itself access to that specific audience. "A lot of people in the industry create branded content, but is it being seen?" asks Donna Speciale, President of Turner Entertainment ad sales. "We’ve produced hundreds of hours of branded content for clients who now have the megaphone of TBS, which amplifies the branded content. Turner’s portfolio has every age, sex, demographic and lifestyle behavior that you can ask for."
But advertising needs are changing, says Scott Felenstein, EVP ad sales for Discovery Communications. "Clients are trying to look at buying differently," says Felenstein. "They’re looking for more accountability, buying audiences regardless of dayparts, and using more analytics to determine what to buy."
According to Fox’s Lefkowitz, this "hyper-targeting" of audiences is the "next generation of TV ad sales." "Marketers no longer want to know that yes, I reached adults 18-49 and that’s who consumed the product. In their perfect world, it would be men 18-49 who have blond hair and shop at Home Depot on Thursday. If they could get that granularity, it would be the holy grail."
Such precision already exists on some level, largely with independent and untethered networks like BBC America, TVOne and NUVOtv, who appeal to advertisers based on their draw for particular ethnicities or income levels. TVOne, which has been increasing its original hours yearly and last year established its first tentpole programming with the NAACP Image Awards, uses personalities from its 53-owned radio stations to help promote its programming, while NUVOtv uses its partnership with VEVO and programs like The New Point of View, which provides a showcase for emerging Latino filmmakers to interact with its viewership.
BBC America’s audience is affluent and tech savvy, so they invest in social media and event screenings (a theatrical showing of "Doctor Who" earned $10.2 million in one weekend and surpassed the latest "Hunger Games" entry in per-screen dollars), but BBC Worldwide America general manager Perry Simon says they have to be judicious about how they cannibalize their own shows. "We’re conscious of that tipping point," he says. "You don’t want to take viewers away from live viewing, but you still create buzz so you generate more live viewing. We’re an independent in a world that’s increasingly dominated by bigger channel groups, so we have to up our game."
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Channel groups (like NBCUniversal or Fox) have been commonplace for years, but have recently begun to coordinate efforts and present as a unified front. "Network by network delivery, most networks are flat," says Billie Gold, VP and director of buying/programming research for Carat. "It’s so hard to get real reach. They’re starting to harness the power of their mother brand, and launch shows on five networks at once."
"In aggregate we’re stronger than we are individually," says AMC’s Manos, who points to strong programming across the board for her networks, from Thursday night reality series on WE tv (like Braxton Family Values) to Sundance Channel’s original series like Red Road. "AMC has a very deep slate."
Group strength like that is something Mel Berning, A&E Networks’ president of ad sales, appreciates. "A&E appeals to adults, Lifetime to women, History to men," he says. "We can super-serve those parts of the audience that are really core to an advertiser’s brand."
Viacom found another way to super-serve clients with Viacom Velocity and the Viacom Echo Social Media Network in January, a full-service integrated marketing and creative content solution group designed to wed advertisers’ needs with company content. "We are a one-stop shop on delivering value," says Jeff Lucas, sales head for Viacom Media Networks Music and Entertainment Group. "We can co-create content customized for a brand in the authentic voice of a specific network or brand, in our house, because we own the show."
Owning enough content to be valuable to ad buyers on that level alone is where most networks would like to be. How that happens, however, isn’t clear yet. There are still yet more battles to be waged between cable and broadcast to see who sits on the ad buyer throne.
But cable’s future looks bright. "Much of the success that’s being driven by cable right now is because viewers are engaged," says Hallmark’s Abbott. "Cable overall is the driver of a lot of the entertainment industry, and as such, ad dollars will continue to flow there."
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