At Issue: Which is the stronger medium cable or broadcast?

In the ongoing battle for TV supremacy, cable devotees have been quick to proclaim that they've pulled ahead of their broadcast foes. "We're up and broadcast is down for the count,Ó they say. Broadcast disciples, on the other hand, aren't ready to concede defeat just yet. "Let's see cable pull a 15 rating, just onceÓ tends to be their usual refrain.

The probable winners of this skirmish, of course, are advertisers, who have more and more demographically appealing TV options than ever before. And it's not as if advertisers are asked to choose either one or the other; even the skimpiest media budget can usually accommodate both entities. Alas, this hasn't stopped the sniping, so MEDIA decided to fan the fire. We asked experts on both sides of the fence to weigh in with their opinion on the question: "Which is the stronger medium cable or broadcast?Ó

Steve Gigliotti, Senior Vice President of Ad Sales, Scripps Networks (Home & Garden Television, The Food Network
When talking about the pressures of broadcast, one of my friends says, "Every year we have to sell a six-pack with five cans in it, then the next year we have to sell a five-pack with four cans in it.Ó It sounds crude, but there's so much pressure. The cost of operations — buying programs and everything else — keeps going up. The value broadcast brings is that it's a shotgun. It's the best way in the world to hit a large, undifferentiated audience in the best possible medium.

With broadcast versus cable, there's an analogy you can make to the magazine world. It used to be that Life and Look were the only two magazines that came to the house. Then, slowly, all sorts of niche magazines began to pop up. We're seeing the same thing now with broadcast and cable — on cable, you're seeing finely targeted networks with exclusive audiences. It's working because the advertising world is more concerned than ever before about who they're hitting.

At one time, advertisers were broadly focused on adult women. Then it was adult women between 25 and 49, then adult women between 25 and 49 who own homes and have a household income bracket of more than $75,000 per year. Cable allows significantly better targeting.

A few years ago, we started doing research to find out how viewers of our networks respond to our advertisers, the kind of connection they had with our advertisers. What we learned, which was a bit surprising, is that our audience views our spots as resources rather than interruptions. When you get a Sherman Williams spot during a program about decorating, it fits. I don't think you see that kind of fit with broadcast very often.

Gina Callan, Media Director, GraficaGroup

Some of the prime-time numbers on broadcast are frightening — you're seeing some threes, when years ago there was nothing under 18. Profits are up in cable, too, so that leads to the perception that cable is healthier than broadcast. It's not too surprising, then, that broadcast networks are buying cable ones.

Reach is obviously cable's main drawback. If you're looking for that 20 rating, you still have to go to broadcast — and you better have the budget to do it. But cable really allows you to target. If you're looking for an upscale older person, cable's going to be there for you. Cable's audience is also younger. There's really no place to reach teens on broadcast. I don't think we'll be seeing something like The Osbournes on CBS anytime soon, you know?

For the most part, clients are going to go with whoever gives them the better deal. That's been happening since the beginning of time — TV pitted against radio, radio against print. Accountability is hugely important; every ad agency should justify to its clients exactly how they're spending their money, especially during lean times. If you're an ad agency or a media-buying service and have a $250 million budget, you're not going to shy away from broadcast. When the budget is smaller everybody has to be choosier about what they recommend to clients. Now, everybody wants something for what they perceive as nothing. It's not just broadcast versus cable - it's TV against radio, radio against print.

In terms of the broadcast-or-cable decision, what clients should be getting from their ad agencies is an educated recommendation. When I worked for Travelers Group, [CEO] Sandy Weil's wife, Joan, wanted to know why we weren't advertising on Murder, She Wrote. In the end, did Joan see the commercial there? Of course.

Joe Abruzzese, President of Advertising Sales, Discovery Networks
I'm not sure what's working for the broadcast networks anymore. The morning shows are doing well — that's the last time you get to see somebody before they go off to work, which is a good place for advertisers. Some of the late-night shows are OK. But every year you see more dollars taken out of daytime. And network news really isn't working at all. The demographics are closer to Wheel of Fortune than anything else.

Every year, more money goes from broadcast to cable. Obviously I'm a little biased — I want to accelerate it. I want to close the CPM gap between cable and broadcast. In the last known numbers for broadcast networks, which are the nine months between January and September 2002, they claim that their dollars are up 2.2%. But in 2001, there was one fewer week, because there were no ads after September 11. The volume is flat, but pricing is up to offset the declining ratings.

The clutter on cable is substantially less. We run eight minutes an hour; Friends runs 11. I mean, you can bake a pie in the time they're away. Every client says to me, "I want less clutter, but I'm not going to pay more.Ó What cable has to do is keep making the argument that network ratings are down and cable is up. Look at the times of the year: From September to May on the networks, the ratings are OK. But once original programming stops in May, the ratings drop dramatically. The sevens for broadcast and the twos for cable are fives and threes between June and September.

We've conditioned advertisers that to sustain or introduce a brand, they need rating points. But if we give those rating points to them for less money, which is what many cable people have done, they're not going to spend it elsewhere. They're going to put it back in their pockets. Cable should not treat its product like that.

Garfield Rickets, Chief Executive Officer, Round2 Communications
For the first time, cable networks have been able to demonstrate that collectively they now outperform broadcast networks. That's a pretty remarkable feat. In the 1970s, people dismissed cable as a medium. Now, you have some advertisers who won't even consider broadcast.

What I often say is that cable is like radio with pictures — you have that same ability to generate frequency. Also, with cable, there is a place for you to advertise no matter what your interest is. If you're a Home Depot or Ethan Allen, you can go straight to Home & Garden Television. Cable's also making inroads in the liquor category, which broadcast won't touch. A lot of brands that NBC couldn't take without backlash, like Chivas Regal, can advertise on cable. But cable will probably never have the panache that broadcast does. When you tell somebody that your client is going to be on CSI, ER, or Law & Order, their eyes light up. The problem is that it's incredibly expensive per eyeball to get on shows like that.

I'm not sure clients care one way or another, for the most part. Many of them really rely on us to tell them what we think they should do. There's rarely any resistance anymore when you say "Let's go to cable instead of broadcast.Ó Advertisers are just looking for the best opportunity, that's all. The bigger or more desirable they are, the better deal they can strike.

What will be interesting moving forward is the evolution of broadcast and cable programming. I'm waiting for networks to start addressing Generation Y. Advertisers are already starting to do this, but few networks are developing shows for that audience. They'll be the next wave of consumers; they'll be as big as the Baby Boomers.

Tom Attea, Managing Partner/Co-Founder Leapfrog Advertising
With the question of cable versus broadcast, it obviously depends on what you're advertising. We do the creative and buying for the Fonar Stand Up MRI, and the ad has an 800 number for people to call if they're interested in more information. With a very generalized direct-response approach like that, cable isn't the right choice. We're sorting through the haystack of the general audience for people on the verge of needing an MRI, which is obviously not a big part of the universe. The bigger the number of viewers, the bigger response we're going to get.

So even though cable doesn't have the reach that broadcast does, it's great for specific targeting — you can basically pick your audience by zip code. Your money goes further on cable, too. I think a lot of people underestimate the importance of frequency. If the goal of an ad is to persuade, you need repeated impressions. The first time somebody sees something, it doesn't really register. By the third time, they'll start thinking about taking action.

We're all concerned about the same things: channel surfing, boxes that eliminate commercials. What we should be more concerned about is that so few commercials do what they ought to do, which is magnify the best reason to buy a product or service.

And I have issues with the entertainment medium itself. People who are doing programming apparently have no idea about what Americans are interested in watching. You have guys with big guns shooting guys with bigger guns, stuff like that. If you watch TV long enough, the next morning you're surprised that nobody is shooting at you from the building across the street.

Tom Martin, Vice President and Media Director Marcus Thomas
The markets we deal with have about 75% to 85% cable penetration, so we obviously look at cable quite closely as an option. We do the Pizza Hut franchises in the northeast Ohio area, and our target is adults between 18 and 49. If we only look at network affiliates, we're going to seriously underdeliver.

Cable has really evolved. Ten years ago, it was mostly limited programming and reruns. Now, you're looking at top-flight programming — the JFK Jr. movie, TNT original movies. Even with all of this, there's a perception that cable is still the low-cost TV alternative.

The main problem with cable is that you're not going to get reach. There are certain programs, like football on ESPN and Trading Spaces, where you'll get numbers. But even the hits on cable are doing mostly twos and threes. On broadcast, even mediocre performers are doing sevens and eights. With cable, I think it's smart to look at the fixed programming. You may roll your eyes at the WWE, but in Cleveland, for example, Raw on Monday nights gets a 4.8 rating for adults between 18 and 34.

Broadcast has its troubles as well. I think it's funny that outside of Friends and a few others, most of the top programming is reality-based. Cable's been doing reality for the last two decades, when you think about it. Look at the Food Network. It concerns me that broadcast isn't pushing the envelope a bit more with its programming.

Of course, so much depends on advertisers in the local markets. If they know what the original programming on cable is, more of their dollars are going to go towards cable. If there's a perception that cable is just the status quo, then the dollars are going to go to the network affiliates and cable will just get ads from the local dry cleaner or bake shop.

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