Their target: a much larger chunk of the $15 billion spent each year on spot TV. Currently, national marketers spend an estimated $450 million on local cable system commercial buys.
AT&T Broadband & Internet Services, Comcast Corp., Cox Communications, MediaOne (acquired last week by AT&T Corp.) and Time Warner Cable -- through their joint ownership of rep company National Cable Communications -- are in talks with representatives of the ad industry about an ambitious plan that would allow marketers to easily target local ads to specific communities.
'WE CAN ONLY IMAGINE'
If NCC can deliver on the proposed ideas, "It can turn the business on its head in ways we can only imagine," said Alec Gerster, chairman of Grey Advertising's MediaCom, which spent $490 million on spot TV last year.
Mr. Gerster was among a group of leading agency media executives who met with executives from the cable companies in New York April 27 to hear the plans.
Another participant at the meeting, Allen Banks, exec VP-North American media director, Saatchi & Saatchi, New York, agreed the initiative could result in major budget shifts.
"This could indeed be a sea change in the way we do business," said Mr. Banks, whose agency spent $650 million on spot TV last year.
NCC's plan -- the brainchild of CEO Tom Olson -- has three core elements. The first is to get its electronic data interface initiative rolled out across the country.
"The idea there is to have a seamless electronic fulfillment process in at least the top 50 markets that operates a lot like a national interconnect, where we're not dependent on the local systems for any part of that fulfillment process," said one of the cable company ad executives.
The next step is a national rollout of a system similar to the Adlink service now operating in southern California. That service allows satellite delivery of local commercials from national advertisers.
"Cable operators in at least the top 50 markets would dedicate some of their inventory for the national arena, and we would tie it all together electronically so NCC -- nationally out of New York -- could command and control that inventory through an electronic pipeline straight into all the cable operators' file servers," the cable executive said.
As a result, NCC would provide placement, delivery and verification of commercials with the same one-stop ease agencies get when dealing with national broadcast and cable networks.
The third part of the plan is the most intriguing to marketers. Because the cable operators have upgraded their plants and systems to handle digital information, they will be able to offer advertisers, on a national basis, targeted -- and later interactive -- buys.
For example, if General Motors Corp.'s Cadillac wants to send an ad to cable homes in specific upscale communities, NCC could place spots on systems in those areas.
Some cable companies are talking to local broadcasters to see if they want to participate in the effort.
In the past, Mr. Banks said, "three things have prevented us spending money with local cable: lack of information about who is watching what, local verification of spots and price of inventory. If we can solve these issues -- and they are solvable -- local cable can get more dollars."
Larry Zipin, Time Warner Cable's VP-ad sales and a participant at the April 27 meeting, said cable companies want to be sure their investment in the plan will yield results.
"We want to be very careful to invest in the few technologies the agencies and clients are most likely to want," he said. "We don't want to overcome a bunch of their historical objections just to be faced with the objection du jour."
Jerry Machovina, exec VP, AT&T Media Services, was also at the meeting, and said, "We think this is the future of a lot of advertising. It will move from