General Motors Test-Drives VOD in Philly

Cable World,  May 23, 2005  

• E-mail
• Print
• Link

GM didn't suffer sticker shock when Comcast Spotlight sold it on long- form VOD messages. All the automaker had to do was shift some ad dollars to cable.

By Simon Applebaum

Jim Gallagher has his pitch down flat. The Comcast Spotlight VP and general manager in Philadelphia has spent the better part of two years telling his clients that they need to change to keep up with the different ways consumers use media. Gallagher is such a believer in this new media world, particularly the VOD world, that he's practically giving away VOD ad space to hook future clients.

The hitch: Gallagher gives away long-form VOD ads as an incentive to get clients to shift their local ad dollars to cable.

So far, an underwhelming number of clients have bought into Gallagher's vision of VOD as cable's unique advertising platform. (You can count them on one hand.) However, one client that decided to try it out is a little old company called General Motors. Comcast's hope is that other advertisers will sample VOD once they learn about GM's experience with the platform.

Last year, Comcast Spotlight, General Motors corporate and Philadelphia area GM dealers launched GM Showcase, a content category featured as part of Comcast's on-demand service. It consists of new car presentation videos, test- drive segments of various models and in-depth profiles of cars and trucks focusing on equipment and safety features.

All Comcast digital customers in Philadelphia can check out GM Showcase. In its first 12 months (February 2004-February 2005), GM Showcase clocked more than 125,000 views. Gallagher estimates GM Showcase averaged more than 10,000 views per month this year. Comcast and GM did not provide details on the number of individuals that have seen GM Showcase or the segments that they viewed.

"This gives us a whole different way to reach consumers, giving them information that they couldn't get before through a 30- or 60-second message," says Kevin Fuelling, GM's advertising/marketing manager for Philadelphia, Baltimore and Washington, D.C. "The results are promising and the dealer feedback increases every month." Fuelling and his colleagues at GM can't quantify the impact GM Showcase has had so far on sales of GM cars in Philly, beyond anecdotal reaction from some dealers.

Calling VOD "the shiniest tool in our toolbox," Gallagher says GM dealerships have responded well to the VOD play. "Many of the dealers want copies of the videos running on VOD for use in their showrooms. Of course, we provide them."

With the number of times Comcast subscribers nationwide view on-demand content rising monthly--the MSO says there were 100 million VOD views in March-- Gallagher expects more advertisers to jump in and credits the GM campaign for breaking the ice with ad and media buying agencies. "Not only can they see how they can get a long-form message out to their customers, but they are starting to understand that when a VOD viewer chooses content from one of their clients, they already indicate by that action the interest in that client's message and product or service."

General Motors doesn't pay Spotlight for GM Showcase to be presented as part of Comcast's on-demand service. Instead, Spotlight gets a bigger share of the $25 million GM spends on local TV ads in Fuelling's market. Initially, GM promised to spend $1 million more on Spotlight ads per year, spread across 50 basic and digital channels. In reality, GM has increased its spending by "significantly more" than $1 million a year, Gallagher says, declining to go into specifics.

Shifting Market Share With VOD

In the winter of 2003, Comcast Spotlight president Charlie Thurston and SVP Hank Oster visited GM executives at their New York regional headquarters to advocate a VOD buy in every market served by Spotlight. Thurston and Oster came with an offer they thought GM execs would find tough to refuse: GM experiments with VOD for free, and Spotlight gets a bigger share of its TV ad budgets. Moreover, the increase would be at least double-digit nationwide--not 15-20% in some markets and 2% elsewhere.

"The play was: Wouldn't you love to be the first advertiser in the nation to take advantage of this thing called VOD?" Gallagher says. "The purpose was to cement our relationship with GM and grow our share of their business."

At first, GM execs were skeptical about VOD. "It's something you have to see," says Fuelling. "You can't draw it on a piece of paper in a conference room or explain it over coffee in a restaurant." Eventually, their attitude went "from cautious to cautiously optimistic."

The second round of negotiations took place in Philadelphia, which is where Fuelling and Gallagher entered the picture. The parties agreed that launching GM Showcase in one market made more sense than launching it nationally. Fuelling was sold on the idea of long-form on-demand content that didn't come with a price tag (beyond the shift in market share to Spotlight). The trick was to get his Philly dealerships on board. "The main question we had was over how we ensure customers see what we produce," he says. "How do we know this is not a waste of time or resources?"