Seeking a Rebound

Mar 28, 2005  •  Post A Comment

Cleveland has been mired in an economic rut in recent years that has landed it the distinction of being the poorest large city in the nation, according to U.S. Census Bureau figures. But as local advertisers slash their budgets, the dark cloud over Cleveland’s designated market area may have a silver lining for its cable business.

“Because our economic outlook tends to be fairly negative compared to the national economic outlook, there is less advertising being bought in this market,” said Patricia Wren, president of the Cleveland Advertising Association. “The people who are buying advertising are looking for as much mileage as they can get from a commercial.”

As a result, some small advertisers are turning to cable for the first time.

“We did [a promotion called] ’90 Degrees Can Be Cool’ for Lighthouse Pools last summer that incorporated cable,” said Jeff Thomas, senior VP and director of media services for Stern Advertising in Pepper Pike, Ohio. The promotion encouraged viewers to enter a contest to guess the first day in a given month that the temperature would hit 90 degrees. Those who did so correctly were entered into a drawing to win an above-ground pool.

Though the promotion also incorporated broadcast TV, radio and the Internet, it was the first time the swimming pool retailer had advertised on cable. “We felt that the cable audience was critical for us to promote this because when you look at the above-ground pool use, the audience is very cable-oriented,” Mr. Thomas said.

Cable penetration in the Cleveland-Akron-Canton DMA is about 71 percent and has been fairly consistent the last few years, said Diana Fusco, general sales manager for Cleveland Media Connect, an interconnect that inserts on 38 networks serving 996,000 households. The interconnect is managed by Time Warner. The largest partner is Adelphia, which controls 60 percent of the local cable market. Time Warner covers about 30 percent, with the remaining market share split among four providers.

“We were one of the last Top 50 markets to interconnect,” Ms. Fusco said. “In 2004 we were still working through some operational issues and didn’t have our legs underneath us. Now we’ve worked out those issues and are working very smoothly.”

In addition to its economic challenges, Cleveland’s demographics, which skew older and more conservative than national averages, have been a burden on the local cable advertising business. But Ms. Fusco said she is seeing the beginning of a turnaround, brought about in part by heavy election campaign spending in the last quarter of 2004.

“Arguably the most money in the country was dropped in Ohio, and all of the stations are pacing against that, as are we. The competitive atmosphere is heightened at this point, more so than I have seen it in previous years,” she said.

“Traditionally this market has not seen political advertising at the interconnect level. Typically they buy zone. For local races, the districts will buy local cable. But we also saw the presidential money and the issue money come in.”

Ms. Fusco said the interconnect is expecting a boost in sales this year from the rollout of Adtag and Adcopy in the second quarter.