Selling Against Cable TV Alabama Broadcasters Association Webinar. What Your Clients Need To Know About Cable Advertising.

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1 Selling Against Cable TV What Your Clients Need To Know About Cable Advertising John Potter VP/Training Radio Advertising Bureau What s in store Cable: where things stand How cable is sold Cable s strengths and weaknesses How to position yourself against and with cable An action plan Tools and resources Page 1

2 Cable TV TBS Weather Discovery Nikelodeon USA TNT CNN Food Pay channels HBO Disney Showtime Movie Channel Cinemax Starz Encore Cable TV Structure Cable networks Network reps Network ads Cable & satellite 12 minutes/hr Cable systems Local reps Local ads Cable only 2 minutes/hr 40 ad supported channels Interconnects Page 2

3 Systems/Interconnects Systems/Interconnects Source: Media Market Resources, Inc. PrecisionTrak October 2008 Page 3

4 Systems/Interconnects Source: Media Market Resources, Inc. PrecisionTrak October 2008 Systems/Interconnects Source: Media Market Resources, Inc. PrecisionTrak October 2008 Page 4

5 Systems/Interconnects Source: Media Market Resources, Inc. PrecisionTrak October 2008 Systems/Interconnects Source: Media Market Resources, Inc. PrecisionTrak October 2008 Page 5

6 Total Advertising Revenues Billions Newspaper TV Online Direct Mail Cable Radio Directories Outdoor Source: Universal McCann, 2009 Local Advertising Revenues Billions Newspaper TV Radio Cable 3.3 Source: Universal McCann, 2009 Page 6

7 Media Consumption Cable TV Radio 38% 26% Newspaper 6% Internet 7% Broadcast TV 23% Source: Veronis Suhler Stevenson Communications Industry Forecast Cutting the Cord 12% cut premium cable services over the past year 7% cut cable TV altogether th (half million households) h Sources: Wall Street Journal, October 13, 2010 Page 7

8 Cutting the Cord Online video is growing ESPN on Xbox360 Apple TV itunes Hulu Sezmi YouTube Netfilx streaming movies Sony TV/Google TV Cable TV Upside 58% penetration Inexpensive Target by network, program or zone Visual Subscribers source: Nielsen Media, July, 2010; Media Management Center, Northwestern University Page 8

9 Cable Penetration Cable ADS Birmingham (Anniston Tuscaloosa) 49.3% 44.9% Dothan 58.3% 35.7% Huntsville Decatur 53.8% 40.0% Mobile Pensacola 52.9% 39.9% Montgomery Salinas 53.8% 38.1% Source: Nielsen Media Research, July, 2010 Decreasing penetration 42% can t be reached Lowest since 1999 Bad commercial production Clutter DVRs Low daytime viewing ADS and Internet competition Lacking full DMA coverage Poor reach and frequency Subscribers source: Nielsen Media, July 2010; Media Management Center, Northwestern University Cable TV Downside Page 9

10 Clutter Broadcast TV Cable TV Radio 12:00 14:40 12:00 24 units 29 units 15 units 2:00 2:00 12:00 4 units 4 units 15 units 42 channels 168 units Source for Cable TV: AAAA, 2009 Greatest Strength Advertisers' perception of reach. Page 10

11 Greatest Strength Advertisers' perception of reach. Unfortunately for them, they are wrong. Cable Reach Sources: Nielsen Media, US Census, 2009 Page 11

12 Greatest Weakness Lack of results. Cable TV & Broadcast Broadcast adds significant reach Broadcast adds affordable frequency Broadcast reaches consumers during the day Broadcast offers promotions Broadcast s quality production is affordable Page 12

13 Summary Learn about competitive media Page 13

14 Page 14

15 Custom Fact Sheet Page 15

16 Sales Tips Learn about competitive media Understand client s media perceptions Use empathy for client s thinking And at the same time Show dangers of investing in a competing medium and excluding Radio Thank You! John Potter VP/Training Radio Advertising Bureau jpotter@rab.com Page 16

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