Winning an Uphill Fight

Jul 25, 2005  •  Post A Comment

With a cost per point that puts market No. 28, Charlotte, more on par with market No. 40, competition is fierce for ad dollars in North Carolina’s biggest TV market.

That means Time Warner Cable, the largest cable operator in the market, with 390,000 subscribers, is turning to emerging ad forms to stand out. It’s also relying on the strength of its national sales into the market, which have been surging, said Lucy Lange, general manager for TWC in Charlotte.

“The competitive world, the cost-per-point world, is very tough,” she said. “[Cable] is very undervalued. Where Nielsen has not helped ratings for cable is Charlotte. We are fighting a steep uphill battle.”

But the dominant operator is fighting that battle with added value and new tech tools that make it unique.

Ms. Lange said the market is developing opportunities for advertisers to participate in video-on-demand and to deliver interactive ads using Navic Networks technology. It’s also selling local car dealers on the Time Warner-owned car information site BeepBeep.com.

The Charlotte market was the site last December of a VOD trial in conjunction with Coca-Cola in which Time Warner offered a preview of movies playing in the theater as well as some Coke-branded short-form entertainment content. The system ran cross-channel ads in support of the Coke-branded VOD programming. Ms. Lange said she could not reveal usage numbers, but noted she is in talks with Coke to develop additional VOD content.

Time Warner has another interactive project in the works in Charlotte: It’s developing and testing the overlays for interactive ads powered by Navic that should be in place by early 2006. With the interactive capabilities, advertisers can add polls, trivia, sweepstakes and requests for information to their ads. Hyundai has used Navic in Cox’s Phoenix system to let viewers request a test drive. Time Warner offers Navic’s tools in other markets, such as Albany, N.Y., and in Hawaii.

Interactivity has the potential to boost Time Warner’s competitive position in Charlotte. After all, Navic CEO Frank Anthony said, Navic’s existing cable operator clients in 28 markets representing 2.5 million cable viewers have seen increases of $10 per subscriber in local ad revenue, about a 30 percent rise, after they introduce interactivity.

Ms. Lange expects automotive clients-such as group area dealers-will want these new ad forms, as will health care and real estate advertisers. She also said a local amusement park is interested in creating interactive 30-second spots that allow a viewer to click and be transported into a longer-form VOD virtual tour of park rides. “We have to be careful because we are putting our most prized asset, our subscriber, out there for them,” she said. “We have to make sure it’s the right partner.”

The third new media tool Time Warner looks to as a secret weapon in Charlotte is the online auto finder service BeepBeep.com, scheduled to go live this week. The system partners with local auto dealers, allows them to list their vehicles on the site, and then runs cross-channel spots promoting the service. Ms. Lange hopes the prospect of listing their cars will spur local dealers to spend more and to also commit beyond their typical month-to-month spends.

Selling Zones

Charter serves about 150,000 customers in the northwest area of Charlotte, and it’s protecting its automotive business by focusing on the ability to sell the specific zones it handles rather than the entire market, said Dwight Ardoin, VP of ad sales for Charter Media in the Carolinas. To counter the broadcasters’ encroachment into its hyperlocal zones, Charter has shared local automotive research with dealers indicating that most sales come from very close to the dealer’s location, rather than from the larger Charlotte market. The zone strategy is working, since Charter has been able to retain modest dollar growth even in a post-political year, he said.

Ms. Lange said that in Charlotte, national sales are the strongest, followed by regional and then local. Time Warner Cable restructured its national ad sales team late last year to move national sales managers out of the divisions and into major markets including Atlanta, New York and Chicago, where they interact regularly with clients and agencies, pitching them on advertising in local markets.

“We are in front of national agencies on a more regular basis. Last year [the sales managers] would go in once a quarter,” she said.

She declined to reveal the national sales increases the system is seeing, but said they are significant and outpacing the competition.

Adelphia also has a presence in Charlotte with about 42,000 subscribers. Time Warner claims 11 of the 22 counties in the Charlotte designated market area and primarily the largest ones, with Adelphia and Charter owning the outlying parts, Ms. Lange said.

While Time Warner and Comcast have not disclosed how Adelphia’s systems will be divvied up once the sale of the bankrupt operator to the two big cablers is completed sometime next year, it’s logical to assume that Adelphia’s Charlotte subs will be folded into Time Warner’s existing market base.

In Charlotte, Time Warner is responsible for selling ads for all but two of the 22 counties in the Charlotte interconnect that lets advertisers buy the entire DMA. Charter and Adelphia handle local selling within the zones they own.