Morph and merge

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At the cabletelevision Advertising Bureau's annual meeting last month, Steve Heyer, president-chief operating officer of Turner Broadcasting System, addressed issues of the future of cable TV, advertising and technology. Following are excerpts from his remarks:

I believe that it is time for media buyers and planners to realign what constitutes national media. The debate is no longer just about a choice between broadcast and cable. It is about cable and interactive TV and the Web. And soon, it won't even be about that as distribution forms morph and merge into one another.

INTEGRATED MARKETING

It is and will continue to be about integrated marketing across multiple distribution platforms. It is about using the coming convergence of media distribution forms to the advantage of your brand and product.

Mass marketing, as defined in the later part of the 20th century, is dead. We're witnessing the "demassification" of the mass market.

Extreme targeting -- the other end of the spectrum -- is still a few years off.

The promises offered by data mining and the ability to zero in on customers, who want to receive your message and have the greatest propensity to become purchasers, is real. Thousands of channels are a real possibility as broadband explodes.

In the middle -- between tomorrow's promise of self-selected audiences ready to make purchase decisions and yesterday's mass marketing -- is cable TV.

PREMIUM AUDIENCES

Cable's audiences are premium audiences; 90% of households with incomes over $75,000 are cable homes.

Cable is best positioned to experiment. It can serve as a lab for agencies to create unique ways to position their clients' products and services.

It can more easily build out line extensions to the Internet. Cable is broadband delivery. It can support new functionality involved in enhanced TV applications. Sixty percent of all cable homes have two-way interactivity available to them. Four million cable modems will be in place by yearend.

NEW OPPORTUNITIES

When media planners start thinking of cable at the gravitational center of their buying plans, possibilities and new ideas become options.

Companies like Turner need to embrace this transformational process in terms of converting ourselves from cable programmers and operators to integrated, customer-focused business people.

Moreover, cable has seen early adapters already migrate to its networks.

KIDS AND SPORTS

The majority of kids' programming long since deserted the broadcast networks. Today, cable generates 77% of the average gross weekly impressions against kids 2-11. About half of sports programming has migrated to cable. The preponderance of National Basketball Association and Major League Baseball games are to be found on cable networks.

Kids and sports are both categories where enhanced TV applications and "killer online apps" are likely to take place first. And they are both primarily on cable TV.

Today, we're seeing functional parity achieved between the fully distributed cable networks and the broadcast networks in terms of reach.

Tomorrow promises real parity and probably advantage, because on an integrated basis the cable network brands are substantially stronger than the broadcast brands.

TURBOCHARGED ECONOMY

Today, we're seeing cost per thousands driven by a turbocharged economy.

Tomorrow we'll see hybrid-pricing, which combines a media payment with an additional payment for every consumer who takes the desired action. We'll see substantially more focus on data mining.

These opportunities won't be available to local broadcasters, who don't know their viewers on a first-name basis. Cable operators do. They know their customers household by household and by ZIP code. Imagine results based on performance-based CPMs, rather than just delivery-based CPMs.

Today, the cable business has two primary revenue streams -- subscription and advertising.

Tomorrow, cable TV will be looking at modems, video-on-demand, on-screen aids and digital set-top boxes as primary revenue buckets. The advertising bucket will be blended with e-commerce. It won't be just about sales promotion any longer. It will be about closing the sale as well.

Let's face it. The old lines, which divided media by distribution, have become blurred for the consumer and the stockholder alike. There are several forces pulling us into the multimedia future, [including consolidation, convergence, connectivity and the consumer].

CONSUMERS: OBJECT OF AFFECTION

Consumers, of course, are the object of all of our affections. We need to convince consumers their time [spent with us] is well invested.

That proposition is getting ever more difficult to achieve. Attention spans are shrinking as the information barrage is growing. Content -- now more than ever -- must be compelling, relevant, differentiated and rewarding.

Community is another way of looking at consumers. Tomorrow's communities will be self-selecting. "Buddy lists" in online chat rooms are a perfect example. These self-defined consumer groups will drive a considerable amount of commerce. They will infuse new meaning into what today passes for "key selling demos." My last "C" word is about Control. It has to do with taking control of our own destinies.

We need to define our businesses -- not in traditional terms, but in user-friendly terms. The goal is to find solutions, not defend boundaries.

Yesterday's adage was "content is king." It's not quite that simple any longer. Content wins, but distribution matters. Terrific content that is put on the wrong media roadway can no longer expect to get to its consumer destination. There are just too many lanes of traffic these days.

Today, we talk about price most often in terms of gross rating point delivery framed in the context of reach and frequency.

Tomorrow, the really smart media players are going to show agencies how they can monetize the entire entertainment value chain for their clients. Clients will be invited to become revenue participants at various stages across the value chain in exchange for helping underwrite multiple media platforms.

UP TO 75% SPENT UPFRONT

Today, advertisers spend 70%-75% of their media budgets over a six-day period of time called the upfront.

Cable TV is uniquely advantaged to serve as the gateway to new media applications.

If you combine your ambition and creativity with the full range of opportunities that cable offers today, you not only unlock the full value of today's media budgets, but also create a bridge to a very rewarding future for you and your client.

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