New York: Major-Market Operators Adjust to Sales Obstacles

May 23, 2005  •  Post A Comment

Though the consolidation wave that has taken the cable industry by storm in recent months has left the largest designated market area-New York-largely unaffected, the three cable operators doing local advertising sales business there are embracing change, adjusting to market forces and being innovative.

With more than 7.3 million households, the New York DMA remains one of the advertising community’s most important markets. Yet compared with other major markets in the United States, some might describe it as a bit fragmented.

The New York DMA does have an interconnect arrangement, but only two of the three dominant cable operators in the region-Cablevision Systems and Comcast-participate in it. Time Warner Cable, the third multiple system operator in the area and the one that serves the Manhattan borough, runs its own local cable ad sales effort. The company chose in 1998 to exit the New York Interconnect amid a disagreement over selling strategy.

The result is that advertisers must make two phone calls when they want to run ads on local cable systems in the region, and while officials from both the New York Interconnect and Time Warner acknowledge the arrangement is less than ideal, they also say that it has not hindered either from getting business.

“Some say we would benefit greatly if we were together, but at the end of the day the bigger question is, are we satisfied with the money [we’re taking in], and the answer is undoubtedly yes,” said Larry Fischer, president of Time Warner Cable Media Sales. “There is always plenty of compelling programming to sell, and having our own news product [NY1] ties a nice bow around everything.”

Indeed, if a media buyer calls only the New York Interconnect, it will capture cable subscribers in New York’s surrounding suburbs, including Long Island, and Westchester County, N.Y.; southern Connecticut; and a good chunk of New Jersey. Parts of New York City, including Manhattan, would be missed.

But that doesn’t mean the two groups don’t talk to each other. Ed Renicker, the general manager of New York Interconnect, said the two sales forces maintain ties and work together whenever a client requests it.

“The reality is, I think, that we have a very good relationship from an ad-sales standpoint,” he said. “We both want to make it easier for clients and agencies, and if we need to go in together to meet with a client, we’ll do it.”

To ensure the clients remain happy, both Time Warner and the New York Interconnect are aggressively working on offering advertisers tools that enable them to take advantage of both evolving viewer trends and the emergence of new technologies such as video-on-demand and digital video recorders.

At Time Warner efforts are under way to experiment with running ads on the cable operator’s VOD service and the company is exploring ways to make advertising interactive through cable set-top boxes.

“DVR penetration is accelerating, and VOD is taking away from traditional viewing,” Mr. Fischer said. “It’s up to us to create unique advertising units that are going to be different from what advertisers are used to, but are equally powerful.”

The New York Interconnect is exploring similar developments, while at the same time examining ways to streamline processes to make it easier for advertisers to upload avails data as well as perform such tasks as keying in orders.