Cable, broadcast’s interconnect feud

Mar 18, 2002  •  Post A Comment

To interconnect or not to interconnect? That is the question for the local-market advertiser.
The Cabletelevision Advertising Bureau, which represents national and local cable, says yes, enthusiastically. The Television Advertising Bureau, which represents local broadcasting, says no with just as much gusto.
Individual cable networks promise advertisers targeted audiences, said Christopher Rohrs, who heads the TVB, but interconnects, by combining local systems into one marketwide buy, dilute the “targeting as a premise” argument. The cable argument also is that the audiences that an advertiser will reach through an interconnect multinetwork “reach block” are unduplicated, but that is not the case either, Mr. Rohrs said.
“We say, `Don’t count on that [audience] being unduplicated,” he said, contending that TVB research shows that some interconnect reach-block ads run as much as 15 minutes or even 30 minutes apart on different networks, which in today’s remote-controlled, multichannel universe cannot count as unduplicated audience. However, Mr. Rohrs pointed to the difficulty in gathering aggregated data about “fragmented” local cable when asked to cite data showing what percentage of interconnect reach-block buys are of nonduplicated audiences.
Not surprisingly, Joe Ostrow, who heads the CAB, sees white where Mr. Rohrs sees black. “Interconnects are an absolute blessing to the advertising industry,” he said, “because it is one-stop shopping.”
One point on which both CAB and TVB agree is that unlike national cable, where the costs-per-thousand are lower than national broadcast, local cable CPMs are higher than local-broadcast CPMs-double “at a minimum,” TVB’s Mr. Rohrs said.
Local cable CPMs are higher because local advertisers recognize the value of local cable over local broadcast, CAB’s Mr. Ostrow said.
To the contrary, local cable CPMs are higher because local cable has “not been held to the same standards,” Mr. Rohrs said. “There’s been a vested interest in many ad agencies to kind of give them a pass,” he said. “It all started with wanting cable to be a very strong, viable alternative to broadcast to restrain the prices of-particularly-network broadcast.”
That agency pass continues today, Mr. Rohrs said, in the form of an acceptance of inflated ratings for low-rated networks and therefore inflated CPMs. In the Philadelphia area, for example, he said, 92 percent of all prime-time cable programs had a household rating of 0.9 or less. Local cable’s so-called “targeted reach blocks,” which are less than total cable-network aggregations, he said, are unreliable because they aggregate networks that individually reach tiny audiences, generally below the so-called 1.0 rating stability level.
“Of course, the [cable] numbers are lower,” Mr. Ostrow said, “because you’re selecting out the people you want to talk to. I know exactly who I’m talking to when I go on Lifetime or ESPN or CNN or the Weather Channel or the Cartoon Network.”
Mr. Rohrs took particular exception to ads Philadelphia-based Comcast Cable placed last year in Advertising Age, Electronic Media’s sister publication. In those ads, Comcast touted its Philadelphia interconnect’s reach in ads that proclaimed, “Forget Broadcast!” Mr. Rohrs turned those ads-and TVB’s argument refuting them-into the basis of a new presentation to TVB’s members and their advertisers. The crux of the presentation, called “Selling Against Interconnects,” is that local cable doesn’t “earn” its way onto a buy at the customary high CPMs, so advertisers should make local cable lower its rates.