Cable TV turns new ground in the world of commercials
Half-hour commercials? Programming that is essentially long commercials broken up by clusters of shorter commercials? The local high school hockey game interrupted by ads?
The prospect is enough to make a viewer shudder. But there are glints in the eyes of advertisers all across the country. Cable TV is opening new horizons in the realm of sponsorship.
Says Robert Alter, president of Cabletelevision Ad Bureau, "[Cable television ] changes the whole marketplace of advertising."
Lisa Bellar, a media planner at J. Walter Thompson Company in Chicago who is currently working with the American Association of Advertising Agencies, predicts that "Cable is going to change the way the advertising business operates."
The change has already begun. One sign of things likely to come is "The Home Shopping Show," a 30-minute program that sells 10-minute time slots to manufacturers who want air time to talk about their products. A talk-show format is used, with a host interviewing the company representative, who discusses and demonstrates the product. The show has attracted a substantial audience and is now being carried on 470 cable systems. It is a concept which cable system managers hope will lure large numbers of sponsors.
Participants on this show, "on the air" since last September, have included Pillsbury, Corning, Hershey's, Maytag, and Mr. Coffee.
At the moment cable is still small potatoes compared with the commercial networks. Advertisers will spend $8 billion this year to plug their products on commercial TV, while cable television expects to bring in only slightly above $ 110 million in advertising revenue. Commercial television claims 87 percent viewership while cable's share of the nation's viewers is somewhat under 5 percent.
However, by 1990, Robert Alter forecasts, cable will be attracting about $2.5 billion worth of advertising, and commercial television's slice of the viewership pie will be down to 75 percent. He also predicts that cable television, which now counts on advertising for only 2 to 3 percent of its total revenues, will then be relying on ads for 20 to 25 percent of its income.
Does this mean that cable viewers will end up paying cable fees only to find their viewing time awash with ads? There is, says Murray Yaeger, a professor of broadcasting at Boston University School of Public Communication, the danger of "double jeopardy" for cable viewers. "They end up paying fees plusm seeing ads," he remarks. However, he predicts that public opinion will act as a check on the number and quality of commercials. "You're not going to do anything to antagonize your potential customer," he points out.
Whatever, cable television is clearly a growth industry, and most advertisers agree with the assessment of Arnie Semski, senior vice-president and director of media and network for BBD&O, a New York-based advertising firm, that, "getting involved now is just common sense."
But for many advertisers, involvement with cable TV is much more than just plain common sense. It's the chance to zero in on new markets, and to do so in a fashion not permitted by the commercial networks.
"Targeting" is one of the words most often heard when discussing the advertising potential of cable TV. The advent of cable is being compared to the arrival several years ago of the special interest magazine. Cable advertisers will be zooming in on audiences of specified ages, interests, and localities.
One of cable's appeals to advertisers is that it is an active rather than a passive medium. A subscriber must make a choice, first to pay the fee for basic cable, and then to subscribe to additional channels after that. A subscriber's decision to plug into a particular station gives an advertiser some clues as to that subscriber's interests and identity.
For example, Warner Amex Satellite Entertainment Company will be introducing MTV, a 24-hour rock music network, broadcasting on the first-ever stereo video signal. Featured on MTV will be live rock concerts from all over the world, interviews with rock musicians, and news about entertainers.
The idea for the station was formally broached two weeks ago, and according to Robert McGroarty, senior vice-president of marketing and sales for Warner Amex, "Every major advertising agency in the United States has called and expressed interest." The would-be sponsors are very, very eager to air ads tailored to the often elusive, but very lucrative, segment of the market that is under 35 years of age.
This kind of targetting is known in the advertising world as "narrowcasting," and sponsors are delighted that cable is permitting them to do more of it. Sponsors are also pleased by the flexibility of cable managers, who will go so far as to permit advertisers to specify the segment of a show during which they wish their ad to appear. Quaker, for example, recently ran an ad for its Ken-L Ration dogfood along with a cable news report on pets.
Arnie Semski predicts that this kind of narrowcasting will foster a new brand of market research planning. Census data, he expects, will be heavily relied on , and demographic and geographic considerations will become very important.
Local advertisers are also beginning to take advantage of narrowcasting, and viewers soon may be seeing the local high school football game on the air, courtesy of the town's Ford dealer.
In addition to targeting, cable is very attractive to advertisers because of its flexibility. Commercial television sells cut-and-dried 30- or 60-second slots. Cable, however, is open to experimentation of all sorts. As one cable executive put it, "Our whole attitude here is pioneering."
This pioneering has already produced a new breed of commercial -- the "soft sell" educational commercial. R. E. (Buck) Buchanan, executive vice-president and US media director for J. Walter Thompson USA of New York, says that cable is forcing the advertising industry to "throw away the idea that you must do a hard-sell commercial in 30 seconds."
Others in the industry predict that in future cable programming the distinction between advertising and entertainment will blur.
Educational commercials, or so-called "informercials," --interest. J. Walter Thompson has been producing several at its own expense, hoping to determine what will interest different cable networks. One of these is to be called "Bureau Report." It will be a half-hour segment produced by Newsweek, and will show editors of the magazine discussing the lead story for that week and the reporting that went into it.