Commentary

The Real Importance Of Local Cable Advertising

by Wayne Friedman , Staff Writer, January 19, 2015

Local cable advertising sales will be a significant part of a cable operator company’s revenue someday, with the promise of big scale addressable and programmatic advertising. Even then it may be hard to tell by looking at financial statements.

For example, Time Warner Cable advertising revenues were at $795 million in 2014 --- a 7% growth from the previous year, and just 5% of the company’s overall earnings before interest taxes depreciation and amortization.

Comcast Spotlight, the ad sales arm of Comcast Cable, continues to do its part, striking a number of initiatives -- including the ability for marketers to insert ads on a Comcast household basis through NBCUniversal’s controlled inventory, addressable-enabled on VOD.

Many addressable/programmatic efforts to gain better-targeted, better-priced local advertising inventory have been in the works for some time. But many of these efforts are scattered, and more is needed. Standardized research, measurement, and data ownership continue to be issues. Also for cable operators there’s the issue of slow-moving addressable system technology deployment in each market.

So the focus at cable, satellite, and telco companies will be on broadband and new digital platforms as well as traditional TV-video services, and those revenues. Local advertising on cable operators systems won’t be much the headlines.

The good news now is there are some 50 million addressable homes -- a little less than half of U.S. TV homes. Many believe the eventual Comcast-Time Warner Cable merger can only help push this process along. But the rate of acceleration of new cable advertising will be slow -- at best.

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5 comments about "The Real Importance Of Local Cable Advertising ".

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Sangeeta Gupta from Lokbharat Ultra Media Network, January 19, 2015 at 2:23 p.m.
I think the role of Cable operators is very limited. Since the technology is growing rapidly and most of the things run on digital platform. In next ten years cable Advertising will no more in the Industry.
Sangeeta Gupta
www.lokbharat.com
Reply

Eric Kinaitis from AEF, January 19, 2015 at 2:32 p.m.

The pace of ad sales addressability has been at a glacial pace in local cable ad sales. I was working on a project for addressability implementation when I was at Time Warner Cable . . . 12 years ago.

Joel Melby from clypd, January 19, 2015 at 2:53 p.m.

Wayne, I think you've correctly identified some of the key structural impediments to broad adoption of local addressability. Let me add two more: consistent segmentation and scale (the two go together). Without a way to define audience targets consistently across providers, it becomes very difficult to aggregate audiences into a scale that is meaningful to advertisers, especially with fine-grained segments.

In the not-too-distant future, though, these impediments will be overcome - the value of digital-like addressability combined with TV reach and engagement won't let them remain for long.

Leonard Zachary from T___n__, January 19, 2015 at 3:19 p.m.

A sustainable and intelligent mobile platform solution will fill in the gaps for the cable local address-ability.

Bob Gordon from The Auto Channel, January 19, 2015 at 4:46 p.m.

now what exactly is cable again?