Affordable National TV with Perks
One FCC directive that isn't drawing too much attention to date is the January 1, 2006 deadline for the mandatory closed captioning of all English-language programming on broadcast, cable and syndication (with few exceptions) established as part of the Telecommunications Act of 1996. This deadline also coincides with the phasing out of government grants from the Department of Education that had previously covered closed captioning costs. But the challenge of meeting deadlines and covering costs is also creating exciting opportunities in the form of closed captioning sponsorships.
The FCC provided an eight-year phase-in period of mandatory closed captioning, allowing cable operators, broadcasters, satellite distributors and other multi-channel video programming distributors to ramp up their closed captioning of programming in 25% intervals or benchmarks every two years.
Today, the majority of outlets are in compliance, with 75% or more of their programming closed captioned. Getting the last 25% of programming captioned comes at a time when the majority of broadcasters are focused on transitioning from analog to digital and budgets have been stretched fairly thin.
One of the upsides created by the increase in closed captioning programs is the increased inventory of closed captioning billboards and spots, both additional vehicles for advertisers to drive brand awareness with consumers.
Eight years ago, Richard Storrs recognized the opportunity that the FCC mandate and shift in funding created. Leaving an executive position with PicTV, Storrs formed Creative Television Marketing , a company specializing in short-form national television advertising sales.
Explains Storrs: “The grants for closed captioning are going away. And while many outlets had a certain amount of their closed captioning taken care of, going from 75% to 100% is a big jump. That jump is going to cost broadcast outlets and cable networks a lot of money. These outlets are going to have to look for a way to privatize their captioning cost and sponsorships are a way for them to do it with no risks.”
John Moczulski formed a company last year that deals specifically with selling closed captioning sponsorships and 10-second promotional consideration spots, explains: “Everybody has had their eye on digital and looking at the major expense of converting from analog to digital. Closed captioning is one of those things that everyone says ‘oh yeah.' And while 75 to 80% of broadcasters and cable networks are fully compliant right now, a lot of them have not chosen to sponsor closed captioning, but have eaten the costs. And as the marketplace gets tighter and inventory gets tighter, and more people are using PVRs and shifting programming, more people are seeing the opportunity to recoup some of the expense through closed captioning sponsorship.”
Typically, post-produced closed captioning costs about $600 per half hour, while live closed captioning, such as with news broadcasts, runs about $250 a half hour. But, as Moczulski says: “Multiply that by the number of hours of programming and the basic cable network will spend between $975,000 and $1.4 million depending on the number of hours of programming [on closed captioning].”
In addition to offsetting costs for the outlet, producer or distributor, closed captioning sponsorships also provide a number of advantages to the advertiser in addition to a national advertising platform.
First and foremost, closed captioning sponsorships are more affordable than 30-second or even 15-second commercial spots offered around a show. According to Moczulski, closed captioning sponsorships typically cost 25 to 30% of what an advertiser would pay for a 30-second spot.
Says Storrs: “Advertisers that potentially can't afford to buy 15- and 30-second spots on national television are finding this area an efficient way to brand their products and get their message out.”
As with other advertising opportunities, sponsorship rates vary depending on CPMs as well as the demand to be associated with a specific personality or program content. Oprah Winfrey, for example, in addition to being a highly rated show and popular with the 18 to 49 female demographic, is also in high demand because of the influence she has over the purchasing decisions of her audience.
Another factor attracting new advertisers to sponsorships is the fact that closed captioning serves several sectors outside of straight marketing and advertising. Says Moczulski: “The funds for closed captioning sponsorship can also be drawn from non-advertising budgets, such as public service or community affairs budgets.”
Distinction is another advantage of closed captioning sponsorship, standing alone and apart from the two-minute pod of multiple commercial messages. Explains Storrs: “People get a nice isolated spot. I call it a viewer-directed spot in that just prior to the sponsor's spot, the viewer's attention is directed to the closed captioning billboard and then, boom, the sponsor's ad message. The viewer is being directed to that spot with the message that they've done something important and special and they should watch the spot because of that. That's very important.”
This brings us to the halo effect that these sponsorships merit. Says Storrs: “The philanthropic, public service halo that comes to closed caption sponsors definitely extends out to the audience and there are a lot of people that commit to these sponsorships for that very reason. They want to be involved, and they use it for the public relations aspect. It's an important part of why they're doing this.”
Storrs and Moczulski have one difference of opinion on closed captioning sponsorships, and that's on their ability to bypass or circumvent viewers from zapping through the advertiser's message. Moczulski believes that because closed captioning sponsorships are designated as programming rather than a commercial in vertical interval line 21, these ads are virtually Tivo-proof. Storrs stops short of that, preferring to say that because of where the sponsorship ads are placed, it is physically more difficult to bypass them with the remote control.
The last and final selling point for closed caption sponsorships, and 10-second spots in general, can be found in a study conducted by Frank N. Magid Associates and sponsored by Sony in April of 2004. Testing the 10-second spot's effectiveness in conveying advertisers' messages, Magid found that 10-second spots have very strong levels of recall and persuasiveness, with unaided awareness being 75% of 30-second commercials. The study also found that aided recall levels were 98% of :30s, and the results were even more pronounced among viewers 18 to 34.