Selling Against Cable TV What Your Clients Need To Know About Cable Advertising John Potter VP/Training Radio Advertising Bureau jpotter@rab.com 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
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
Systems/Interconnects Systems/Interconnects Source: Media Market Resources, Inc. PrecisionTrak October 2008 Page 3
Systems/Interconnects Source: Media Market Resources, Inc. PrecisionTrak October 2008 Systems/Interconnects Source: Media Market Resources, Inc. PrecisionTrak October 2008 Page 4
Systems/Interconnects Source: Media Market Resources, Inc. PrecisionTrak October 2008 Systems/Interconnects Source: Media Market Resources, Inc. PrecisionTrak October 2008 Page 5
Total Advertising Revenues Billions 40000 37.8 35000 31.5 30000 25000 20000 23.5 21.6 21.2 18.8 15000 12.2 10000 7.0 5000 0 Newspaper TV Online Direct Mail Cable Radio Directories Outdoor Source: Universal McCann, 2009 Local Advertising Revenues Billions 30000 28.7 25000 20000 15000 14.9 13.6 10000 5000 0 Newspaper TV Radio Cable 3.3 Source: Universal McCann, 2009 Page 6
Media Consumption Cable TV Radio 38% 26% Newspaper 6% Internet 7% Broadcast TV 23% Source: Veronis Suhler Stevenson Communications Industry Forecast 2009-2013 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
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
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
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
Greatest Strength Advertisers' perception of reach. Unfortunately for them, they are wrong. Cable Reach Sources: Nielsen Media, US Census, 2009 Page 11
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
Summary Learn about competitive media www.tvb.org www.thecab.tv Page 13
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Custom Fact Sheet Page 15
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