The new leadership of the Cabletelevision Advertising Bureau has canceled the association’s annual national convention and will do some heavy-duty number crunching instead.
New CAB President Sean Cunningham has spent the past four months meeting with media-buying agency chiefs, buyers and planners. He said that what he heard, loud and clear, was the idea that some powerful research, delivered in smaller one-on-one presentations, could help accelerate the flow of ad dollars from broadcast to cable.
CAB has been holding conventions since 1982. But the money that would have gone into the February 2004 gathering will be poured into research and a resulting road show. The CAB board last week also approved a significantly larger budget for the organization, which is backed by both programmers and operators.
“We’ll take a year’s hiatus. We’ll do the big show with all the bells and whistles the following year,” Mr. Cunningham said. “I think it’s a great decision because it gives us great focus.” He said the group is changing from “an information association to an advertising advocacy marketing group.”
One leading media agency researcher said more data could help cable. “They’ve been actively campaigning for a larger share of ad budgets to go along with their increasing share of viewing and to close the CPM [cost-per-thousand] gap between themselves and broadcast network. Research potentially is one of the ways they can help move forward towards those goals,” said Jon Swallen, senior VP and director of media knowledge at Universal McCann.
Of course, other market forces are working to keep the price of cable advertising down. “The other component that interacts here is supply and demand of inventory, and that’s certainly a significant variable in the pricing equation, in addition to audience levels,” Mr. Swallen said.
The CAB estimates that cable’s share of network TV dollars will be 45.3 percent in 2003, up from 40.8 percent in 2000. The group projects that cable network revenues will surpass broadcast network revenues by the end of calendar year 2006.
But the CAB wants to speed up that process.
Mr. Cunningham, a longtime media planner before coming to the CAB, said some hard, cold statistics could help puncture the way some buyers think about broadcast TV and cable TV. After his round of meetings, he said, he was surprised that smart media executives still associated broadcast TV with such terms as “high-visibility” programming, “breakthrough” programming, “high-impact” programming, “the water cooler effect,” “cachet” and “the company you keep.”
“That’s consistent with how myself and my peers used to sell in premium broadcast 15 years ago,” he said. “The notion that you’re going to get buzz or cachet may have been true 15 years ago, but it no longer really is.” And certainly, cable has more than its share of buzz-worthy programming that’s putting spikes on the Nielsen charts, including MTV’s “Video Music Awards” and TLC’s “Trading Spaces” specials.
“The bottom line is that clients and agencies are getting a little bit angry over the type of CPM increases they’re forced into paying by the broadcast networks. And a lot of the reasons why they do that are just long-held, wrong-held ideas about broadcast prime time,” said David Cassaro, senior executive VP, sales and distribution, for E! Network and a CAB director. “The reality is there are things you can do.”
To update those impressions, the CAB will undertake what Mr. Cunningham calls a research “triple play,” which he hopes to have in the market before next year’s upfront.
“I’m looking forward to a year from February being able to talk about the results of the research in terms of its impact on the marketplace,” Mr. Cunningham said.
Phase one is to update the media agencies on the latest Nielsen numbers. Mr. Cunningham said that during his meetings it seemed that most buyers were buying into the proposition-pressed by Turner Broadcasting’s Media at the Millennium III study-that fully distributed cable networks have enough ratings and reach to offer an alternative to broadcast networks in prime time. That study should be prepared and ready for presentation in a matter of weeks, he said.
Phase two is a qualitative study of viewers designed to see whether they look at broadcast and cable television differently than media buyers do in terms of which shows are appointment viewing and which advertising environments are most cluttered.
“There could be good value to finding out that the way people consume TV today is as TV, and not per se in the buckets in which we buy and sell it,” Mr. Cunningham said.
The survey will also probe the relationship between viewers and brands. “We’ll see what if any stories there are about attentiveness and remembrance of ads in certain environments vs. others,” Mr. Cunningham said.
A preliminary survey conducted last month found that when viewers were asked about “appointment viewing,” 55 percent said broadcast and cable were about the same. But of those reporting a difference, 20 percent pointed to cable, while 12 percent pointed to broadcast. Results like that encouraged the CAB to go forward with a full study.
The third study might be the hardest-hitting. “A lot of the conversations that I had in these hundred meetings would sooner or later come around to the subject of return on investment. It is a very, very big subject,” with the area of media audits and accountability growing, Mr. Cunningham said.
The CAB will try to get sales data from marketers to determine the degree to which spending in various media translated into sales.
“You’re looking at all the media weight that’s out there. You handle the different marketing variables and look at sales and do an econometric analysis,” said Ira Sussman, VP, research, at the CAB. “You’re basically able to assign a certain value of each media. If I were going to spend a dollar, what kind of return am I going to get on that dollar? Our guess is that if you spend a dollar on cable you’ll get a buck-25 on cable and 87 back on others.”
To ensure the studies are accepted, the CAB will discuss the designs with agency researchers. The group is setting an aggressive timetable and hopes the qualitative survey will be completed by March and the ROI study will be done by April.
“I’d rather have it bulletproof in terms of methodology than rush it to market,” Mr. Cunningham said.
In contrast to the cable industry, the broadcast networks haven’t had a trade group in years. “They couldn’t talk together,” said Steve Raddock, VP of communications and production at the CAB. “The thing about this industry is that we can all talk together with one voice. We’re on the same wavelength. This industry has always been good at working together to really further the medium.”