For Comcast Ad Unit, Spotlight Is on Advances

NEW YORK — Comcast marked the 10th anniversary of its advertising sales division Comcast Spotlight with a posh luncheon on the terrace of the American Museum of Natural History, complete with tuxedo-clad waiters and red-umbrella toting models lining the way into the event for the 175 media and advertising clients attending.

But the celebration was not without substance. Comcast held the event primarily as a thank you to clients — and noted that if its pending acquisition of Time Warner Cable is approved, New York area cable advertisers will actually be able to see in their own homes the cable system their ads are placed on.

Comcast Cable CEO Neil Smit and Spotlight president Charlie Thurston highlighted what has been and will continue to be a major revenue generator.

Comcast Spotlight was launched in 2004 with about 72 market interconnects. Today it has a presence in nearly 80 markets with more than 35 million owned and represented homes. Through its Interconnect Plus (I+) service, Comcast’s satellite and telco initiative launched in 2011, Spotlight advertisers have access to customers from DirecTV, Dish Network, Verizon Communications and AT&T.

I+ now spans 72 DMAs in the top 46 markets in the country, where spot-cable penetration has increased about 48%, Thurston said.

“Normally a single show on broadcast celebrates a 5% or 10% ratings increase. We boosted ratings, shares, impressions, any metric you can apply on an average of 48%, sign-on to sign-off, for our 50 networks in the top 46 DMAs,” Thurston said. “The four telco and satellite partners have added back 20 million subs to spot cable nationwide and there are numerous expansion options.”

Despite its size and scope, Spotlight has been a hidden gem in the vast Comcast conglomerate. Thurston said the unit is expected to generate about $2.5 billion in revenue in 2014, up from $2.2 billion in 2013 and seven times what the division generated in 2002.

“What started as a modest in-house ad division has blossomed nicely into must-buy TV,” Thurston said.

Fueling that growth will be strong political ad revenue — $250 million in 2014, compared to $240 million in 2012 (a presidential election year) and $47 million in 2013.

Digital ad revenue, boosted by its recent acquisition of online ad campaign company FreeWheel, should rise to $127 million in 2014, up from $108 million in 2013.

“We are furthest along on our multiscreen initiative, tying linear advertisers together with matching online capability,” Thurston said. “Overall ad recall is up 35% when TV and online are synched.”

Thurston said advertisers are looking to replace banner ads on the XFinity portal with video. “Fast forward five years and we foresee an online video offering at Spotlight that rivals our current 50-network linear lineup,” Thurston said.

Smit offered New York area advertisers a peek at the X1 user interface, which, at least until its pending merger with Time Warner Cable is approved, hasn’t been available in New York City.

The X1 and the next-generation X2 are an integral part of the ad experience. Thurston said the X2 interface presents opportunities for inserting ads in trailers and videoon- demand offerings.

Smit said X1 and X2 users churn less and watch more. Comcast’s robust VOD offerings, including full seasons of select shows also help drive ratings, he added. Comcast secured the rights to air the full current season of Fox comedy The Mindy Project, for example.

“What consumers told us is, ‘I saw episode five, I think I’m going to like this program but I want to go back to the beginning to figure out what it’s all about.’ We went to the programmers and said we will disable fast forward — so you get that ad inventory and Nielsen measures a C3 window. In exchange for that we want the full current season.”

After launching with The Mindy Project, C3 ratings for the premier show of the season were 63% higher in Comcast markets. For the second episode, ratings were 83% higher in Comcast markets.

“We’re seeing on demand driving linear viewing,” Smit said.