It isn’t enough anymore for top salesman Larry Fischer to bring in impressive revenue. Part of his job as president of Time Warner Cable Advertising Sales is to use tomorrow’s technologies to close today’s gap between revenue and the actual size of the audience cable puts in front of television sets.
“In terms of matching revenue to viewership we have a long way to go,” said Mr. Fischer. “[The industry] takes 18 percent of the money and has 35 percent of the viewership.”
The local cable ad sales division of Time Warner Cable has systematically revamped its operations over the past few years to better compete with broadcast. The company plans to begin digital insertion in three markets early this year and to deploy a master ad insertion infrastructure in mid-year. That’s part of the overall local cable ad sales hurdle to get a fair share of the advertising dollar.
In the second quarter Time Warner Cable plans to introduce digital-into-digital ad insertion software from nCube and SeaChange that will allow for local ads targeted to digital customers in its New York, San Antonio and Houston markets. In those markets, Time Warner will be able to insert digitally on 52 networks-including such attractive ones as Golf Channel, Animal Planet and HGTV-instead of 40, which should translate into more media buys, he said.
By mid-year, Time Warner Cable plans to deploy its master advertising insertion infrastructure emanating from its Charlotte, N.C., headend. The project began 11/2 years ago and entailed upgrading the company’s 300 “zones” within its footprint of 10.9 million customers so that each zone can handle insertion on at least 30 networks. The infrastructure will allow centralized traffic and billing from Charlotte for the entire company.
Mr. Fischer also must assess how emerging technologies can serve as advertising vehicles. “We see technology on the horizon that will provide us with opportunities and challenges, like video-on-demand. How can advertisers participate in that and have their message stand out?” he asked. Advertiser concerns with VOD and PVR technology are not so much about whether viewers will skip commercials, but rather if they might view them too late. For instance, a viewer could record a show on Sunday for a one-day Macy’s sale the next day but not watch the show until the following weekend.
Mr. Fischer’s concern is how to compete more effectively with broadcasters. One way is by creating interconnects, which unify the ad sales operations for different cable operators within a DMA, thus mirroring the broadcast market. The cable industry is likely to move feverishly to interconnect more markets and to bolster existing ones, given that Charlie Thurston is now president of Comcast’s ad sales division and his mission is to create interconnects in each of the multiple system operator’s markets. Mr. Fisher is a proponent of interconnects but has a more circumspect approach. “It’s high on my list of priorities where it makes sense. I have to be convinced that it works well financially,” he said.
But since Time Warner Cable is one the most highly clustered MSOs, with 92 percent of its systems being in DMAs of more than 100,000, an interconnect is not always a slam-dunk. “In certain geographies where you as the cable operator own the prime real estate in terms of upscale homes, you might not get the lift you are looking for by connecting the surrounding areas,” he said.
For instance, Time Warner Cable has not yet interconnected its 1.2 million-home New York system with the rest of the New York market. “We thought we could do better on our own because we have the core of New York,” he said. However, he added, the system will probably be part of the interconnect in the future.
Mr. Fischer has been well received by cable programmers. He is both strategic and intricately detailed in his thinking, said Tracy Barrett, VP, affiliate advertising sales and distribution marketing, for Lifetime Television. His presence at the cable operator has helped boost the MSO’s local revenues for specific Lifetime promotions, she said, such as Lifetime’s annual “Stop Breast Cancer for Life” campaign in 2002,
Before becoming president of Time Warner Cable Advertising Sales, Mr. Fischer was executive VP, operations, Time Warner Cable. He also served as president of Time Warner CityCable, the advertising sales division of Time Warner Cable of New York City, from 1988 to 2001.