Buyers Aware: What Advertisers Want

To understand what progress cable needs to make to become even more alluring to advertisers and their agencies, it pays to check in with Patrick McNew and Sue Johenning.

McNew is the Detroit-based executive vice president of Local Media Network and director of operations for PHD USA. The agency counts among its clients one of cable’s top three advertisers, DaimlerChryslerAG, which spent $95.5 million on cable in 2003 to trumpet its Jeep, Chrysler, Dodge and Mercedes automobile lines. All told, McNew’s team is responsible for negotiating, buying and stewarding over $1.5 billion of client money.

Johenning is the Los Angeles-based executive vice president and director of local broadcast at media firm Initiative. She directs one of the largest spot purchasing operations in the U.S., with billings in excess of $3 billion. Her staff of 200 works with clients like Acura, Carl’s, Denny’s, First Interstate Bank and The Walt Disney Co. Johenning was promoted to her post in 2003, replacing long-time spot maven, Kathy Crawford.

Recently, Johenning and McNew shared some thoughts with correspondent Jean Bergantini Grillo about how they use cable — and the areas where cable could use improvement. An edited transcript follows.

MCN: How can you use cable most effectively?

JOHENNING: The addressability of local cable is the most significant point of differentiation versus broadcast. The ability to finely target geographic areas is of particular importance to retailers who may want to send different messages to different segments of the same DMA.

McNEW: We continually benchmark our local-market costs and CPMs [cost per thousand ad rates] — whether on cable or over-the-air — to network costs and CPMs. If we find local market or broadcast CPMs completely out of line with the local market and, just as important, with their respective network CPMs, we might recommend moving money from spot to network.

That said, local cable can be used very effectively by delivering high frequency on a network by combining tonnage and broad rotators along with higher-rated programs. The use of local-cable sports packages and news channels are other great ways to capture a cable audience.

MCN: How can cable become more attractive to agencies and advertisers?

McNEW: Cable can become more attractive with better pricing. For us that means cheaper, more competitive CPMs. We are active in all 210 DMAs, and there are still smaller cable systems out there that can’t even take an order unless it’s placed two or three weeks before start. There are — believe it or not — cable systems that still can’t provide accurate and exact times on invoices. This needs to change. Cable has to become better at notifying the agency of make goods.

Did I mention posting? The local system operators need to understand and stay ahead of the game when it comes to posting local schedules. These are all backroom issues the traditional broadcaster has had to face and refine over the years.

Perhaps it’s because the [Federal Communications Commission] mandated many years ago that stations had to renew their licenses based on their ability to serve the public interest, convenience and necessity, that they have had a better internal system … In the large markets, however, the large cable operators have made impressive and substantial strides in improving the systems issues.

On the selling side, local cable sellers need to provide agencies with better information on how cable covers the market. We need full disclosure on all of the systems that it takes to deliver the entire DMA. Cable has an advantage over local broadcast when it comes to desirable niche audiences. Young demographics, and especially young men, have become increasingly difficult to reach in the broadcast spot medium. Cable can really help deliver those missing demographics, but they need to tell this story.

JOHENNING: Interconnects, with their one-stop shopping, and geo-/demo-targeting, are enticing, but advertisers do not have unlimited funds. Competitive cable pricing is still an issue. Also, we still do not have local cable audience measurement. Fusion is only an interim solution. (For more on fusion, see story page 36.) As an industry, we need a better model to measure viewing.

Mounds of available data present another challenge. Cable is still usually planned and purchased as a separate medium. Major third-party processors have yet to provide planners and buyers with user-friendly products for evaluating data.

MCN: What innovative or interesting local cable campaigns have you worked on? What local campaigns have been most or least effective?

JOHENNING: Cable lends itself well to being part of an innovative media campaign. We’ve had a lot of fun and success with programs involving regional sports cable packages and developing tie-ins with various networks at the local level. We’ve found local cable to be very receptive to promotions, and these have become integral elements of many [of our] campaigns.

McNEW: We’ve done a ton of interesting promotions that have used local cable. For instance, News 12 in New York’s “What’s Hot in the Hamptons?” segment for Jeep. We’ve done car shows, winter driving tips, ski reports … also for News 12. We’ve done too many sports franchises to mention.

Another example is a Dodge tie-in with the MTV Video Music Awards we did to reinforce the national buy. In Los Angeles, Adlink provided a sponsorship for Dodge of the VMA telecast locally. Dodge received 100 promotional spots that ran over 34 cable networks. Anytime you can localize a promotion and involve the viewer, it’s worth it.

MCN: What shortcomings of spot broadcast can cable capitalize on?

McNEW: There is natural erosion in spot broadcast that makes cable more effective with niche advertising and able to deliver the “hard to reach” demos in the spot-broadcast medium. Cable programs/networks cater to a very specific audience, which may be small but very valuable. However, this needs to be made attractive on a fair and competitive cost basis.

JOHENNING: Local cable has demonstrated an ability to be proactive and innovative in the area of electronic exchange of data. This has helped facilitate the planning and buying process of a medium that has historically been very labor intensive.

Until broadcast is truly digital, cable clearly holds the advantage of addressability, geo-targeting, video-on-demand and other options not available in broadcast.