Buying Local Cable vs. Last Second Cable
One of the secrets for successful direct response TV marketers is to buy the "locals" on national cable. In example, Viacom places direct response commercials in the time allotted to the local cable system during their national feed for TV Land, MTV, VH-1 and others. If the local cable system drops the ball, this "local" commercial will air and the advertiser gets a major deal.
On average, these direct response advertisers enjoy 50% savings or more over national cable advertising rates by buying the local on national cable spots. A $2,000 national spot on TV Land can be accessed in the "local rate" for as little as $200. This assumes that the local cable systems will not cover up the local commercial time; although your cost is $200 whether the spot is covered up or not.
We've all seen an example of a local "cover-up" when there's just that one second of another commercial at the tail of another. It's like there is another commercial lying underneath another.
For an advertiser, which is a better bet?
Buying time on those local systems that do sell their advertising time, or those that do not, instead allowing the national feed to broadcast.
Let's compare the best known TV Land Local rates against Last Second Cable -- a new service that aggregates unsold local cable advertising. It's the opposite bet against a national cable "local" buy.
We'll look for a cost per thousand (CPM) household viewers to compare.
Here are the assumptions and conclusions on TV Land-Local:
- According to the 2004 Cable TV Fact Book from the Cable Advertising Bureau, TV Land offers delivery to at least 80 Million total cable homes
- Viacom Sales Dept purports that local cable systems do not insert commercials during their allotted time on TV Land in as many as 45 million homes.
- This assumes the local operator does NOT insert a commercial in their allotted time. This assumes the time will go wasted with no local sales, no per-inquiry advertising, no pay-per-view promos, no cross channel promotion and no Last Second Cable.
- Realistic estimates show that Local cable systems fail to cover up a signal 17%-42.5%
- NTI (Nielsen Television Index) shows an average rating for TV Land at a .5 rating.
- This assumes that, on average, one half of one percent of all people watching television is watching TV Land.
- The very best rates for :30 broadcast on TV Land-Local from M-Su, 6a to 3p is $200
- To estimate viewership on TV Land local, let's use the worst case scenario across the board – that 17% of all cable households receive a signal that is NOT covered up.
- At a .5 rating, TV Land-Local delivers 68,000 viewing households
- CPM is $2.94 via TV Land Local
LOCAL SYSTEM DO USE Last Second Cable
- On the other hand, Last Second Cable offers insertion for advertisers with a :30 via local cable systems.
- It assumes that cable head end would rather get something for broadcast than let the time go to waste.
- The maximum universe of this aggregation system inserts on TV Land, M-F, 6a-6p in up to 46,204,000 homes.
- The advertiser is charged only when the local cable system reports broadcast
- The advertiser is charged for local broadcast at a pro-rated percentage of the population
- The cost per broadcast on LS Cable is calculated at F20 per total system run to all 46,204,000 homes.
- In example: If Cox Cable serves 2.1 million households out of the 45.2 million household universe they would receive 4.5% of the $520
- With a .5 rating for TV Land to 2.1 Million households it is estimated that 10,500 viewing households are reached
- Cox receives 4.5% of the $520 or $23.40 per run
- CPM is $2.32 via Last Second Cable
If we were betting people, we'd find a 26.7% better CPM betting that the local advertiser will do their job.
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