Larry Fischer was one frustrated executive when we caught up with him in early August.

After months of pitching President George W. Bush's reelection campaign on a series of spot cable buys, the Time Warner Cable Ad Sales president finally thought he broke through with a deal for the swing states of Ohio and Wisconsin, as well as continued business in Nevada and New Mexico. He was hoping to have the deal signed in time for CableWORLD's deadline, so it could be included in this story.

It wasn't. The deal that had been "imminent" for weeks suddenly appeared to be at risk, and Fischer wasn't sure why. By our deadline, the deal still had not materialized, the ad placement firm continued dragging its feet.

Still optimistic that the deal would come through in the days after CableWORLD's deadline, Fischer had to be worried that the Bush campaign's cold feet would become a metaphor for cable operators in 2004, which are seeing more revenue from political advertising, though far less than most predicted.

And that's where Fischer's frustration comes into play. Time Warner Cable proactively worked to change perceptions this year. After a lackluster 2000 campaign, the MSO was out in front of this year's race for the White House. As early as last fall, Fischer's team met President Bush and Sen. John Kerry's ad placement firms to address complaints that arose four years ago.

Those early meetings, followed by months of negotiations, left Fischer feeling confident that MSOs finally would get to see a significant bump in political ad dollars. But the Bush campaign's ad delays have left him feeling anything but confident.

"This year is different from 2000 because we saw the train coming; and there wasn't gonna be a train wreck this year," he said. "We've done our part. That's what's been so frustrating... They've been spending money for four months. Why aren't we seeing our fair share?"

Problems That Need Addressing
Spot cable's problem isn't in its message. By all accounts, cable networks are doing better than expected in the political advertising arena.

The problem lies with cable operators' local ad sales divisions, which political media buyers describe as disorganized, unhelpful and inflexible.

"Some operators are great to work with," said Kyle Roberts, whose Media Placement Technologies firm places ads for Republican candidates across the country. "Others aren't. Some don't run a schedule that's already been set. In fact, I just got off the horn with someone I had a big fight with because they didn't run my schedule as promised. Cable operators also don't open up their inventory. I've got a candidate in Atlanta but I can only get three spots a day from the operator there."

These are some of the issues Fischer set out to address last fall. The most common general complaint he's heard about buying from cable operators is that their local ad sales systems are too difficult to figure out, with too many people to call to place an ad. Operators need to do a better job of running schedules on time and making sure spots are priced competitively, Fischer said. "We didn't have to turn them on to cable. We had to convince them that we meant business," he said.

The problem is that broadcast is easier and more cost-effective--at least in the eyes of some media buyers. Nielsen Monitor-Plus and the University of Wisconsin Advertising Project found that both the Republican and Democratic campaigns heavily favor local news in their media buying, with local news accounting for more than 40% of each presidential campaign's TV advertising. Morning network shows, such as The Today Show and Good Morning America, comprise another 11% of local broadcast ad buys.

"Everyone reads about all this money being spent on broadcast advertising, and it's not coming through for cable, which is disappointing," said Kevin Barry, Cabletelevision Ad Bureau's VP, local ad sales. "But so much of the political money that is spent comes down the tubes so late and cable is always the last buy. We're the caboose at the end of the political advertising train."
With spot cable running third behind broadcasters and national cable networks, several local ad sales execs are resigned to the fact that they will not hear from political campaigns until broadcast inventory is filled, something that already has happened in some markets. "The local broadcast affiliates are already filled up, and so candidates are already coming to us for spots," said Jim Heneghan, Charter's SVP, marketing and ad sales.

Cable's Campaign
In many respects, the solutions for cable operators seem simple: They need to clear their schedules, run the schedules they promise they'll run and establish reasonable rates. In general, cable operators are trying to do that. They plan to create zones and target areas to fit politicians' needs, said Stephen Cunningham, president of Target Media Networks, a marketing and consulting firm that works with cable operators, National Cable Communications (the nation's largest spot cable rep firm) and political campaign media buyers.

"Local broadcast spots were designed to increase enthusiasm among voters," he said. "Broadcast and national cable network buys were designed to be efficient. But now operators are showing media buyers that their candidate's messages will be under-delivered if they only use those two outlets. Cable can work better."

Political consultant Ondine Fortune, owner of Los Angeles-based Fortune Media and Consulting, echoed that sentiment. She said MSOs are reassessing their ad policies, opening up their inventory schedules and trying to be more flexible with rates. As a result, the candidates she works for are buying more cable. Some of her clients are spending as much as 30% of their TV advertising in cable.

"It was stifling to work with the [Comcast] folks in Seattle," Fortune said. "But they sat down and talked with us and they opened up their schedules. Now they're working with us, giving us more spots and they're saying that if they have a problem with their inventory they'll come back and talk to us and ask us to back off a little. We're all compromising, and that is the way it should be."

The message from both ad buyers and MSO execs is that operators' local ad sales operations should focus more on simplifying the buying process than on preaching the power of cable over broadcast. In most cases, the message already has gotten through, and the political spot cable business should be bigger than ever this year, in spite of itself.

Even though Roberts of Media Placement Technologies hates dealing with cable operators' local ad sales arms, he still uses spot cable advertising for his political candidates, especially during the primaries.

"Cable is strategically important in primaries," he said. "You try to get as much exposure as you can, and then you step away. Cable is all they say it is. It's great. But there are structural problems that keep them from being the No. 1 choice for campaigns. Broadcasters are just 1,000% easier to work with. I had a client in Florida that wanted to buy some cable. But I couldn't get what I wanted. I went to the local broadcaster and he could give me three spots an hour all day. I couldn't get three spots in a day on cable."

Still, cable has a good story to tell, and execs should be pitching the fact that it can target and segment audiences and messages more effectively. "In Kansas City, 30% of Time Warner's customers live in Kansas," Charter's Heneghan said. "We can make sure the Missouri messages stay in Missouri. The broadcasters can't, and the campaigns are beginning to realize that, too."

NCC is running ads in political publications touting the benefits of cable advertising, and they appear to be working. Operators say they are beginning to see a boost in state and local election advertising, though the national spot money remains elusive.

What's Going On?
It's taken longer than anyone expected for the spot cable market to take off this campaign season, with July and August being lighter than hoped. "We had high hopes this year," said Jack Olson, SVP, media services, Adelphia. "But it hasn't panned out well for national spot so far. The campaigns are buying national network avails instead. At the presidential level, they see the value of cable and so they're buying the national cable networks. I'm hopeful that as the election approaches they'll start to go into the swing states and go deeper with local cable."

To date, the presidential campaigns have spent virtually all the money they've allocated for cable on the national cable networks--a development that concerns Charter's Heneghan. "I don't like the trend we've set here where the campaigns buy only the cable networks and local broadcasters. It helps our network partners, but does nothing for me. One of local cable's biggest competitors has become the national cable networks. It's an unusual shift in the landscape, and not just with political ad spending."

Others see the success of national cable networks as a good, long-term trend for spot cable. "The good news is that for the first time, both the Republicans and the Democrats are using cable in their media mix," said Chuck Cowdry, regional VP in charge of political advertising for National Cable Communications. "So far, they've taken advantage of the prices of the cable networks rather than national spot cable. For instance, in the 19 swing states, we'd be seven or eight times more expensive than CNN, which can deliver the whole country, so it makes a lot of sense for them to go the national cable network route right now."

As the election heats up, national spot cable and local cable should see more attention from the campaigns. The Kerry campaign has bought some cable spots in Washington, D.C., North Carolina and New Hampshire, Cowdry said. Likewise, the Bush campaign has asked NCC for proposals in 13 DMAs as it searches for younger voters and men over 35 years old.

Cable operators in the swing states say they are beginning to see more political money flow their way, although it's coming from state and local campaigns, and not yet from the presidential campaign coffers.

© 2004 Cable World

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