Sandy Brown, CEO of Petry Holding, will be in New Orleans this week to drum up some new cable business for his rep firm. Brown is looking to boost Petry's multiplatform profile in an effort to rely less on the local TV-station spot buys - with their political-year booms and off-year lulls - that have been the company's bread and butter. While the company represents thousands of Web sites and 150 TV stations, it has only a handful of cable clients. Brown is out to change that. He talked with Multichannel News Washington bureau chief John Eggerton on the eve of the CTAM Summit about where Petry is headed in the cable world, and why. An edited transcript follows.
MCN: Why are you going to CTAM?
Sandy Brown: The reason we are down there is to hunt for new business. I got here about a year and a half ago and we took a look at our business and we were pretty much a one-trick pony.
MCN: That that one trick was?
SB: Local spot TV. We had to look for other opportunities that were higher margin and gave us the opportunity to leverage our sales force. And, obviously, getting more in contact with the advertiser directly as opposed to just the agency. We also had to look at it as an opportunity to try to mitigate this issue that we have of the odd-even year [political] cycle, which is the spot business.
MCN: What cable clients do you have now?
SB: We have one major domestic client, RFD TV, which is in about 50 million homes, and are working on a second network ‘to be named,' as well as a couple of others we are in active discussions with. We also have a couple of international clients in Europe and one in Asia, and we are talking to another major European network.
The idea for the international networks is obviously sourcing U.S. advertisers to buy on those networks out of New York.
MCN: And what is your pitch to cable clients?
SB: The cable business is a cross-platform sell. It's multiple touch points. We now have a digital capability that is a joint venture with LIN Media. We are tapping into their network of roughly 50 million monthly unique. We are going to get paid more for that cross-platform sell and it allows us to provide more value to a particular advertiser.
MCN: Is getting more domestic cable business the priority?
SB: Domestic is definitely the priority. With international, a lot of the buys are done in-market and you don't have the same runway that you do domestically. You have a lot of networks out there that haven't gotten a critical mass that do have a demographic appeal, and there are a number of independents out there that don't have the wherewithal to have their own sales forces, and that is where we come into play.
MCN: How much of your business is in cable today?
SB: About 15%.
MCN: And what are you shooting for?
SB: Probably 60/40 spot to cable.
MCN: You have talked about having to be more of a "360" company. I understand you are rebranding the company to make that point even clearer?
SB: Yes, the rebranding is going on now and will probably [be unveiled in] the latter part of the fourth quarter and beginning of the first. The reason we are doing it is that Petry needs to connote a 21st century rep, that we are an integrated-solutions company, not a spot rep.
The branding that we have had in the past has been stale. I don't think it represents the kind of company that we are and will be, and it needed to get gussied up.
MCN: What are the basics of your multiplatform strategy?
SB: The touch points with the advertisers directly are critical. Obviously, you don't get a lot of that on the spot side of the business.
On the cable side of the equation, there are the four O's: on-air, off-air, on the ground and online. We are able to take an event activation, incorporate some promotion on the ground, maybe do a viral promotion, and provide an advertiser an the chance to get some brand recognition and a definitive ROI.
For example, we had an activation we did around the Rose Bowl last year with RFD and Monsanto. We did a lot of vignettes on-air. They had signage on the Rose Bowl float and we did an event at the Rose Bowl with a bunch of their buyers. They saw a dramatic lift in terms of what their sales were on the basis of that and they are coming back again.
MCN: How big will the online business be?
SB: How long is a piece of string? I think clearly you are seeing dramatic growth. It all depends on what part of the online space you are talking about. Are you talking about the local stations' sites; are you talking about search; are you talking about video? It is a pretty loaded question. I think the local station market is probably not that big a market, maybe a couple hundred million dollars.
There are some estimates that are upwards of $700 million to $800 million closing in on a billion, but I am taking a much more conservative view.
That being said, it is not insignificant revenue for someone like us because you are trying to get into the much higher CPM market when you are dealing with video and it does provide a much richer commission scheme than some of the other things we do.
MCN: You have a background in international cable. Where are the growth opportunities for cable there?
SB: Eastern Europe clearly is one area. Most of my familiarity comes from Asia. What I like about Asia is that you are really talking about a market that probably has 40% to 42% penetration at this point, so I think you have a tremendous amount of runway. You also have a growing satellite population, but I think Asian will predominantly be a cable opportunity.
You also have ARPU (average revenue per unit) rates that range anywhere from $3 in a place like China to maybe $5 to $8 in India all the way up to $30 to $35 in a place like Singapore and Hong Kong.
So, I think you have ARPU growth from that perspective as well. You know, the business is for all intents and purposes is probably 15 years old out there and I think you are just scratching the surface.
MCN: You just hired Vanessa Hambidge, former vice president of integrated solutions at MTV Networks ad sales in New York. What will she be doing for you?
SB: Her role here is to basically take over all marketing and communications. She will handle all of the internal marketing and rebranding, as well as anything we do in terms of event activation for customers. She will also be working directly with sales people.
I think she will be a tremendous advantage in putting together integrated packages that will be tailored for advertisers.
MCN: Where do you see the rep business going in the next five years?
SB: I think it is going to be more full-service. There are going to be a number of different touch points, as opposed to focusing in on spot. Digital is going to obviously a much bigger purview. I think the 360 concept is going to be more prevalent.
It is a natural progression. We are in an environment where clients are looking for more in terms of ROI. They want measurement, they want creative solutions. And it is incumbent upon us as reps firms to provide that. n
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Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.