Home » Commentary » CAMPAIGNS & ELECTIONS: Local Cable CPMs are High…and Hard to “Work Around”

CAMPAIGNS & ELECTIONS: Local Cable CPMs are High…and Hard to “Work Around”

Tim Kay from NCC took an interesting approach in his article in Campaigns & Elections‘ “The Case for Keeping Cable in Your Media Mix.” He kicked it off by quoting a political consultant who said “cable is too expensive and it doesn’t work.” I’d like to get that consultant’s name; we are always looking for insightful speakers at TVB events.

But seriously, the point that Tim was aiming to rebut centers around local cable’s ad cost expense versus local broadcast and how to adjust for it. There was an observation that in 2010 cable ran 68 percent of the campaign spots and got only 20 percent of the budgets. The 68 percent is a new number to us since nobody monitors local cable spots across most markets (except NCC), but let us assume it’s right. Let’s not even argue about the 20 percent of revenue figure for local cable (It’s not that high). The 68 percent of units versus 20 percent revenue doesn’t mean that cable is efficient on a CPM or TRP basis. It means that the inventory has very, very low viewing numbers. When faced with selling tiny ratings you cannot set the unit price low enough to be competitive on Cost per Thousand Viewers.

In fact, we know that this low viewing level problem is real. In the May 2011 Nielsen Television Activity Report, total day viewing is reported for 98 Ad Supported Cable Networks. 53 percent of them, more than half, have an average HH rating of .01 percent…1/10 of 1 percent… or lower. Only four networks averaged a 1.0 or better. They were: Adult Swim, Nickelodeon, Nick at Nite and TNT. By contrast the average ABC, CBS FOX and NBC affiliate delivered a 2.4.

The argument is made that the reason local cable is so expensive is because buyers concentrate on Primetime on cable instead of spreading the schedule across multiple dayparts as with broadcast. Perhaps. But try finding ratings and reach generating opportunities on cable channels outside of primetime. Let’s look at the weekly cumulative non duplicated HH reach of ABC versus Lifetime across several dayparts:

If you are a cable buyer outside of Prime where are you going to go? Don’t forget these are maximum reach figures, not ratings.

With significantly limited reach ability, cable channels are left generating frequency upon frequency in all dayparts, but especially non Prime. This means it takes a ton of spots — and a ton of time — as cable channels inch toward their modest reach potential.  It takes a lot of .01 ratings and less to reach even a low single digit reach target.

This does not even address the reduction factors impacting Local performance of the cable nets. The non-ability to insert local commercials on most Satellite HH’s, the non participation of many cable operators in a market’s interconnect etc, etc. It just makes the task more daunting.

The bottom line is that local cable is expensive versus broadcast and there is no easy “fix.” The very low rating delivery, especially outside of Prime, makes daypart dispersion an impractical option. Perhaps for some advertisers whose sole criterion is lowest unit rate and who are under no time constraints, a major cable play makes sense. But this isn’t the case for aggressive, nimble, effective Political campaigning. For that, you need the real reach and the real ratings that remain firmly in the domain of the local broadcast stations.

 

Weekly Cume

 

ABC                        Lifetime

Total Day                             68.8                        23.0

M-F  6-7am                         10.2                        —–

M-F  7-10am                       19.5                        1.2

M-F  10-430pm                  24.9                        4.9

M-F  430-6pm                    19.1                        2.6

M-F  6-730pm                    23.9                        3.8

Prime Time                         50.9                        12.4

M-F 11-1am                        21.8                        3.0

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