Diversity Reigns in The Pacific Northwest

Cable World, July 21, 2003

Byline: ANDREA FIGLER

Comcast Corp.'s system in Seattle scored big time at selling new services this month. Just two weeks ago, the system cut a deal with an undisclosed billion dollar corporation in Seattle to provide high-speed Internet connections and a virtual private network for its employees so they can work from home.

At press time, the company and Comcast were still working on how they were going to announce this deal.

But it's quite a groovy gig for a cable operator, no? It makes you wonder. Did cable pioneers such as Martin Malarkey envision that cable would offer hundreds of thousands of secure Internet network connections when they started digging the first cable trenches 50 years ago?

It's doubtful that these pioneers could see so far into the future, but it doesn't matter in the end. More importantly, the Seattle system's high-speed data and VPN deal solidifies cable's place in the Internet world, not to mention its position as a commercial service provider. In fact, Comcast's Seattle system has one of the strongest penetrations of high-speed Internet subscribers nationwide.

"Throughout the Seattle DMA, there are certain fiber nodes with high-speed data penetration exceeding 40%, which is the [industry's] high-water benchmark," says Rick Germano, senior regional VP for the system. More than 35,000 folks signed up for cable modems in June alone, he adds.

Not bad for a system that serves 1 million basic video subscribers. And not bad for the diverse terrain, both geographically and economically, covered by the cable operator here.

Comcast's market in the state includes the southern areas of Tacoma and Federal Way, known for a strong blue-collar workforce; Washington state capital Olympia; the eastern suburbs and the city of Spokane; the downtown area and surrounding tech-savvy, high-income suburbs of Seattle; and northern Bellingham, which has a strong rural population on the Canadian border.

This wide range of consumers makes it difficult both to operate and market a cable outfit. That's why the system has three area VPs managing the Puget Sound region. But this diversity, in turn, gives cable an edge when it comes to advertising.

"One of our unique attributes is the ability to hit each one of those individual areas," says Rick Stanley, VP and GM of Comcast Ad Sales. With 16 zones, Comcast can tailor ads to specific communities that consume one product more than people in other regions might.

Similar to other cable systems nationwide, auto dealers make up the bulk of Comcast's advertising dollars in Seattle. Unlike other systems, however, foreign automakers recently have increased their ad buys in the 12th largest market in the U.S., Stanley says. While Stanley attributes part of this to the interconnect formed with Charter Communications and Millennium just months ago, there's also a demographic reason behind this twist.

Two distinct characteristics that make Seattle stand out from the other top markets nationwide are Asians and foreign cars. There are a lot of both in the Seattle market served by Comcast. And, oddly enough, the two groups may be linked, according to Matt Kopp, broadcast supervisor for media buyer OMD's Seattle office. "There is a strong foreign category here in Seattle and I think a lot of that is Asian cars, especially Honda and Toyota," Kopp says.

Seattle residents living in the cable operator's service area are 35% more likely to own a foreign car than any of the other top 75 markets nationwide, according to Scarborough Research. Kopp attributes this strong demand for foreign automobiles to the market's massive Asian population. The Seattle market served by Comcast is 92% more likely to have Asian residents than any of the top 75 DMAs.

"Cable is becoming such a niche, where you can get specific stations to handle specific targets," Kopp says.

Comcast offers a Korean channel, KOAM, a la carte for $14.99 to target the large Korean population in the southern region of Seattle.

This ability to target consumers has drawn all of Kopp's clients - including Nissan, McDonald's, and ABC - to cable advertising in Seattle. (ABC spends 100% on cable since the other local broadcasters won't take ABC ads, Kopp clarifies.)

It also helps that cable ads are a bit cheaper, he says. For one of his most recent buys, he paid $300 for cable and $500 for broadcast. "Cable is closer to prime access or early fringe rather than prime on broadcast," Kopp says.

Aside from the Seattle system's unique demographics, the particular cable networks offer unique advertising abilities. For example, Kopp would buy ads on the Travel Channel in a second if his client, cruise company Holland America, wanted to advertise on TV.

The Tulalips, Native American tribes based in the Pacific Northwest, also take advantage of cable's unique programming. Since the tribe owns a casino, it buys ads on the cable networks that attract the gambling crowd, says Pat Walker, media director for Agustavo Burrus Advertising. Comcast ad sales folks actually did the research for Walker to help him find where to place a quarter of the Tulalips' ad budget. According to this research, gamblers watch TNT, Fox News, Discovery, USA Network, Comedy Central, TLC and TNN (or, more appropriately, the "First Network for Men" renamed Spike TV).