National spot cable spending increased 24% in the first six months of 1997, with yet-unreleased third-quarter numbers reflecting an even greater growth, according to Kevin Barry, VP-local sales and marketing for Cabletelevision Advertising Bureau.
"It's going to be a great year for national spot cable," Mr. Barry says.
Now, cable industry executives are looking for more from electronic data interchange, market consolidation and improved ratings measurements.
AGENCIES SUPPORT SPOT CABLE
"Ad agencies really want to use more spot cable. They appreciate the medium, and they can't ignore the massive shift in viewing toward cable and away from broadcast," says Mr. Barry. "We're making cable easier to buy -- a lot easier than a lot of people think."
EDI is one solution the industry hopes to use on a widespread basis. Because sales orders will transfer electronically, the overwhelming amount of paperwork that now deters many advertisers will be eliminated.
"EDI will simply continue the momentum in terms of making this an easier medium to purchase," says Dan Lawlor, general manager of the Chicago Cable Interconnect, which is working on an EDI system. "We're going to roll out the initiative as quickly as we can. Then it's a function of the agencies and what vendors they choose."
Marylouise White-Petteruti, senior VP-director of media systems for Leo Burnett USA, Chicago, says EDI has streamlined the exchange between agency and client. Burnett has been using EDI for four years, but this year began working with vendor MSA to develop and implement industry-wide software. According to Ms. White-Petteruti, agencies are working toward an industry standard for EDI software.
"One of the biggest reasons for the move forward with EDI is that we feel it tells us if our media plan is delivering," says Ms. White-Petteruti. "With EDI, we find a near-zero discrepancy, and that smooths out our client's cash flow. They see that as they lay down their budgets, we're getting the ad time they want. We have a win-win situation."
REVENUES SHOULD BE HIGHER
Yet Mr. Barry says national spot revenues aren't as high as they should be.
"We're not getting a fair share, but we're getting closer," says Mr. Barry. "Cable is overcoming a powerful force, and that's inertia -- advertisers doing what they've always done. Part of the solution lies in making it easier to buy, and we're making progress on that front."
CAB AIMS FOR EDI IN 1998
CAB will have some form of EDI running in 1998, says Mr. Barry. CAB has an EDI committee composed of agency and cable executives. The initial operation may only include one element of the entire process, such as universal ordering or invoicing.
Progress in digital insertion technology also has helped advertisers make local buys.
"You end up in an environment where the operator has less manual intervention and less mechanical intervention," says Michael Pohl, CEO of SkyConnect, a provider of digital insertion technology. That means ads of higher playback quality can be inserted or changed instantly to target more specific audience segments.
Agency media buyers and planners understand the high cost-per -thousand viewers, complications with ordering and billing, and difficulties in measuring ratings still discourage some would-be buyers.
In addition to technology advances, growth and consolidation of interconnects also has made it easier to purchase local cable ad time.
"In the past year we've rounded out the top 10 Designated Market Areas -- they all now have a one-source interconnect," Mr. Barry explains. "So you can buy the entire DMA with one phone call."
EFFICIENT AD BUYS
Beyond that consolidation, interconnects in markets including Chicago and Detroit are making a transition to the use of fiber optic hardware networks.
"We went to each of the [multiple systems operators], we figured out where their fiber backbone was, and we hooked everyone up," says Mr. Lawlor.
The result is a network of more than 110 miles of fiber touching almost 1.5 million households.
This allows advertisers to buy one commercial and run it throughout the interconnect, Mr. Lawlor says. A buy that in the Chicago area once required 54 separate orders has become one-stop shopping.
In spite of the advances, there's still another hurdle: ratings.
"The difficulty we have with estimating ratings in mid- to small-size markets is totally exacerbated in cable," says Dawn Sibley, president of the local broadcast division at Western International Media, Los Angeles.
"Certainly the growth of the interconnects has made it much easier for us. Those cities that have them we utilize," Ms. Sibley says. "I know they're trying to assist local cable stations, but it is still a difficult task, and it's hampered by the ratings situation."
Cable operators and agencies have an increasing number of options to provide better ratings information, according to Anne Elliot, director of communications, Nielsen Media Research.
RATINGS SYSTEMS IMPROVE
New products such as Nielsen's Galaxy Navigator, an electronic delivery system for local audience information, are an improvement over the standard average-quarter-hour numbers, says Ms. Elliot.
Aside from those products, three markets now have access to printed books of more detailed measurements. Pittsburgh, San Antonio and Philadelphia have signed on for Nielsen cable-ratings reports.
According to Ms. Elliot, the books narrow the gap in information available on cable and broadcast ratings.
"One of the great moves forward is that it's like the standard that people have been using for broadcast television," Ms. Elliot said. "It's less cumbersome,