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Finessing the L.A. Market

Feb 9, 2004  •  Post A Comment

With its vast geographic area and broad mix of ethnic groups and income levels, the Los Angeles market is as complex as it is unwieldy. Targeting specific audiences with local cable advertising can be quite challenging.
The good news is that local cable system operators are finding ways to make it happen, and they’re being encouraged by a strong local market spurred by a recovering economy, which is expected to be bolstered by this year’s two major events: political elections and the Summer Olympics in Athens, Greece.
Adelphia Media Services handles the Los Angeles market’s unwieldy size by breaking the region into 30 zones and 10 offices. “We can slice and dice the market to fit most local retailers’ trading areas,” said Roger Stallard, the multiple system operator’s sales department regional VP. Ninety account executives generate 60 percent of the company’s income, with Adlink responsible for an additional 35 percent of its local business.
Like other MSOs, Adelphia is taking steps to romance the region’s expansive Hispanic population by adding three to four Hispanic salespeople to its other bilingual staff. While it currently inserts local spots in Galavision, Mr. Stallard said Adelphia is looking to add several additional insertable Spanish-language channels such as ESPN Deportes and Fox Sports en Espa ‘ol.
At Comcast Spotlight Los Angeles, Marty Sokoler, VP and general manager, attributes his optimism not only to the economic turnaround but also to an understanding by local advertisers “that cable programming is as good or better than broadcast. We can be all things to all people. We insert on 40 networks.”
While he envisions local ad sales rising “in the high teens” this year, “We are split 50/50 between local and national regional business.” He said that ad sales made through Adlink, the local interconnect, contribute 50 percent of Comcast overall Los Angeles revenue.
Mr. Sokoler oversees a sales staff of 32 in four offices: Bellflower, West Los Angeles, Santa Clarita and Corona. Car dealers represent upward of 28 percent of his business, followed by movie and furniture business.
The company’s eight-person in-house production unit produces 30-second spots for $1,000 to $1,500.
San Diego Recovering
Sixty percent of Time Warner Cable’s Los Angeles business derives from local mom-and-pop business, said Allan Kass, VP of ad sales for the company’s L.A. division, which employs 30 account executives and 11 commercial production staffers at sales offices in Chatsworth, Torrance and Costa Mesa. Commercial production costs start at $1,500 and can rise depending on the elements involved, including shooting film rather than tape. “We have the resources to do a Spanish-language commercial, but our Hispanic business is small, but growing,” Mr. Kass said.
Of all the cable systems in Southern California, Time Warner’s outlet in San Diego has had the roughest go of it lately. San Diego’s large military population has been severely impacted by the continued war in Iraq, and the area was devastated by wildfires last year.
Sheryl Charleston, the system’s general manager of advertising sales, said military bases (primarily Navy) are in “the heart of our coverage, and retail, auto dealers and other smaller retailers felt the impact. The wildfires in November shut the community down. It was scary to drive in the streets with all that soot and ash. You didn’t want to go out and breathe that stuff.”
The market is now recovering and the executive projects her local business will rise 15 percent to 20 percent this year. Local sales represent 70 percent of the company’s business and is handled by 13 account executives.
Her regular customers include six Indian-operated casinos. Tony Gross is the company’s one-man production maven, handling all aspects of creating and producing a commercial, which can cost from $1,200 to $3,000. “We do a lot of outdoor, on-location shoots,” said Ms. Charleston.
Adlink, in which Adelphia, Charter, Comcast, Cox and Time Warner have an equity position, has been a major tool in focusing ad buys. The 16-year-old company is projecting first-quarter local ad revenue to rise 25 percent, one notch past last year’s 24 percent increase, according to Rick Oster, the company’s VP and general sales manager.
Mr. Oster, who said local advertising represents 80 percent of Adlink’s revenue, said selling cable is becoming a whole lot easier. “We position ourselves against the broadcast stations,” he said. “A 2 rating on a cable show is at least as valuable as the same rating on a broadcast station. While cable rates are still slightly behind broadcast, some niche networks are attracting a more valuable upscale audience.”
One key feature advertisers relish, he said, is being able to have their own logos affixed side-by-side with the network’s bug.
A recent key shift at Adlink is its approach to Los Angeles’ Hispanic market, the largest in the nation, representing 42 percent of the region’s population, according to Strategy Research Corp. “We now see an opportunity with the assimilated bilingual Hispanic consumer with disposable income,” Mr. Oster said. “We’ve shifted focusing only on the Hispanic networks to the 44 networks we carry. Our approach is to look at Los Angeles by ethnicity, with different messages. We see our future in reaching this kind of consumer by using our Adtag and Adcopy technology.”
Adtag allows customization of commercials for geographic groups, while the Adcopy system ensures selling different products to different market segments by running multiple spots simultaneously, even sending Spanish-language ads to specific Hispanic communities.
Only one person on Adlink’s 10-person sales staff is dedicated to selling Hispanic ads, but the others can sell the market as well.
Adlink created its SportsLink L.A. division, which specializes in placing ads in sports-oriented programming last July. “We literally have 1,752 live [sports] telecasts a year,” said Matt Brown, Adlink VP of marketing and communication, noting the NFL “is the marquee sports franchise,” followed by NBA and NCAA basketball. Among networks in which SportsLink can insert spots are ESPN, ESPN2, ESPN Classics, Fox Sports Net, Fox Sports Net2, Fox En Espa ‘ol, Golf Channel, Outdoor Life, Speed, TBS, TNT and USA.
A sports buy allows cross-channel promotions outside the sports universe or on all 44 networks in Adlink’s larder, depending on the advertiser’s needs. “Advertisers can be cross-promoted on ESPN Radio, in TNT’s print campaigns, have access to game tickets and even meet and greet the athletes,” Mr. Brown said. There’s even a window during a 30-second NBA spot created by TNT for inclusion of the sponsor’s identity.
SportsLink is viewing the summer Olympics in Athens as a golden opportunity. Mr. Brown cited as proof NBC’s plans to air 425 hours of coverage on its MSNBC, CNBC and Bravo cable channels in addition to its broadcast network coverage.