It’s almost Thanksgiving, and less than two weeks ago one company completed an upfront presentation in Atlanta. Huh? What’s this all about? It’s about NCC Media, cable’s spot TV specialists. In this interview with TVWeek’s Chuck Ross, Andrew Capone, NCC’s Senior Vice President, Marketing & Business Development, explains why they do their upfront presentations at a different time than almost anyone else.
TVWeek: Why do your upfront presentations in the fall?
Andrew Capone: The most important reason is that our business cycle does not coincide with the traditional network broadcast and cable upfront period. While some basic planning for the spot television marketplace is done in the middle of the year into the 4th quarter, the reality is that the money is spent pretty much on a linear basis across the 52 weeks of the calendar year. Showing what we have in October and November is the right time to influence the people who are going to allocate money across spot television as we compete in each of the 210 markets we are in.
So our upfront presentations are more consultative and information-based, as opposed to a negotiating ploy. Our regular advertisers usually use us all year round, so we don’t have an influx of billions over a few weeks like the networks depend on during their upfronts.
It’s as much getting people excited about the programming and our new products and services as it is ensuring that we get the right share of the money being spent with our 70-plus share of audience, as well as the quality of our audience.
TVWeek: One of the hallmarks of your upfront presentations is their brevity. You tell the information you need to tell and then it’s party time. I think that’s one of the reasons you get such a great turnout of the young people who work at the media agencies.
Capone: We make a big effort to get our message across in under a half-hour and then let our customers enjoy just a great night bonding with and integrating with us and our affiliates. Plus the celebrities we bring along for their social media feeds.
Unlike network television, our money comes in to us through 3,000 media buyers and their supervisors around the country. For example, I’m here in Atlanta, about to do our upfront here, and Atlanta is our second-largest billing office. We don’t have to put 1,800 people in a room together like we did when I was at NBC. We need to bring 200 to 300 people together in 6 or 7 markets.
Our M.O. is to make sure that (a), we appreciate what our customers are doing, which is giving us an ever-increasing share of their business, and (b), that our cable owners and our other affiliates are able to interact with the buyers and everyone gets to know one another in a fun environment where everyone can let their hair down a little bit.
Uniquely in the spot market, NCC represents the entire portfolio of Mutichannel Programming Video Distributors (MPVDs). We are owned by Comcast, Time Warner and Cox, and we represent all of the others. A national advertiser can come to us and we can ecumenically deal with placing their business in any market, regardless of who the distributor is. And in many of those markets there is more than one. So, let’s say in a big city you might have three separate cable companies plus Verizon plus DirecTV. On the hardwire side there’s an interconnect, so we can send out messages to everyone there, and through our I-Plus product we include the satellite and telco companies. So the advertiser doesn’t have to deal with 3,000 zones, or hundreds of providers, or 12 different station groups that have rep firms like you have in broadcast. It’s all based on the demands of advertisers, who, 20 years ago, required 1,500 pieces of business to get things done. Through our various products and services we’ve made it a lot easier for advertisers to tackle their spot TV demands. This includes the back office trafficking and electronic invoicing and such.
I can’t over-emphasize how important all this is to national advertisers. The bottom line is that they want their ads to appear on ESPN or TBS in Chicago, St. Louis and Cleveland. They don’t care who the distributor is. They just want to get it done. That’s where we come in. We ensure they can buy the cable network programming they want in local markets regardless of whose pipe is delivering this programming into the home.
The story of NCC is that we have made buying ads in the spot marketplace so much easier. We are not just an ad sales organization. We are a company that has worked hard to make sure that the buying of ads can be done easily and efficiently.
TVWeek: What are the specific products you are offering that facilitate all this ?
Capone: Let’s start with the core product, which is cable. Our share of what is spent does not match up with our share of audience because a lot of local buying specs are still written in a way that almost prevent media planners and buyers from extracting value from local television. So we are still using our quantitative research products, cable plan and smart buy, to tell a lot of our great story. So in a local market, where it might be written that a buyer needs to buy 50 grps (gross ratings points) of news per week, you almost can’t do it because there aren’t that many unless you are buying a ton of spots per hour on the newscast. But the specs haven’t changed to say there are also 40 cable shows being run at 6 o’clock. So if a viewer is able to watch 43 shows at 6 o’clock, why am I being forced to buy just the three newscasts that are on at that time? It’s odd we are still dealing with this in 2015. But at NCC we must because cable TV is still 95% of our revenue.
As far as digital goes, there is no question that people are consuming video on devices other than big giant TVs in their living rooms. We provide for the capacity for that to happen through the apps and various TV Everywhere products our owners and affiliates have. So one of our big pushes this year is to ensure that our advertisers can go to market with us and reach consumers who are choosing to sit at their pool with their iPad watching “House Hunters” rather than watching it in their living room on a 50-inch screen.
This includes video on demand. Anything that allows us to put commercial messaging in non-linear video is definitely the core growth product for us in the next year. It’s massively premium inventory. If a media planner or buyer or agency is looking at Hulu or Crackle or YouTube, any of those services, they really should be considering our digital video products.
The next big product for us is kind of the bridge to programmatic, in that we are having a big push toward automated, data-rich media buying in local markets. At the same time, we need to start counting and selling every impression and enabling our advertising partners to buy every impression. Currently, we can have an avail with 10,000 impressions that isn’t viable because of some arbitrary ratings minimum that was declared 10 or 12 years ago. Meanwhile, every single impression on digital can be sold. So we are moving toward that.
And this Audience Plus product that we introduced this year. It’s still in its formative stages. We still testing it with a few agencies. It treats our inventory as if it were a digital ad network, rolls up impressions, and continually calculates reach across a broad array of networks, dayparts and programs. It enables a more semi-programmatic approach to our business. It’s there so when you need that extra 5 or 10 ratings points that translates to 10 million impressions in a market, and you can’t quite get there by buying the same avails you have done, Audience Plus enables you to get there.
TVWeek: What impact will political buys have over the next year?
Capone: 2016 political is going to be almost immeasurably huge. In a way it’s distorted our business a bit because what was a $40 million business for us in 2004 will be $500 million or $600 million or more in 2016. So that wave of one year having political and the next year not having political is still there, but the wave itself is much bigger. That being said, we have a 50-person office in Washington, D.C., and we have systems in place to enable political advertisers to utilize the unimpeachable benefits of targeted cable for political campaigns.
The bottom line is that political campaigns are generally won by states, counties and Congressional districts. And only NCC and our cable companies can target down to that level. It’s a big, big, big piece of our business, and it continues to grow. And we’ve spent a lot of money and devoted a lot of resources to make sure it works for political campaigns, while at the same time being able to serve our endemic advertisers as well as we always do.
The networks political advertisers want to buy are not necessarily the same networks automotive advertisers want to buy. And, in fact, most of the political money will be concentrated in a modest number of states and markets, which means there will be another 150 markets that do not necessarily see a gigantic influx of political money, leaving plenty of inventory for our regular advertisers.
One point we feel strongly about is that there are a lot of national advertisers who shouldn’t be national advertisers. They are drawn by the siren song of $6 CPMs on network cable, perhaps, but when you look at where their customers are and where their products are consumed, and where they need a much greater share of voice of certain markets, they probably would be better off using targeted spot cable rather than network cable.
There are auto manufacturers, for example, that sell 50,000 to 100,000 cars a year, and 90% of their sales are in 20 markets, but they buy national network. I understand you have to build your brand and have to support your dealerships, but a thin network cable schedule of $20 million is getting you the same number of relative impressions in markets where you have no customers as where you have them.
We want to make sure that national advertisers don’t shortchange themselves by not using targeted spot cable to reach the customers that actually use their products and services.