Building Stability In a Transient Town

Cable World, Oct 28, 2002

With its still-heavy dependence on tourism, the market was hit hard by the Sept. 11 attacks. "It's definitely recovered, but not to pre-9/11 levels and so that still affects other aspects of our economy. So much of our work force is employed in the travel and tourism industry," said Jungblut. "In terms of broadcast TV, cable and radio, business is relatively healthy. I don't think it's anywhere near where all the properties would want it to be, but I think it's better than people expected.

"There's a lot of car dealers," she added. "The thing that happened is that, in terms of local advertising, a lot of local accounts that were here ten, 12 years ago were tire stores or retail stores that had grown up here. As Las Vegas has grown, large national companies [have] bought out all of these locals. Cable does a good job for those mom and pops that are left."

As for Cox, Jungblut said, "We have a really good rep who works very hard for us. I know in this market they've had some shake-up in terms of the management, but they've got a really good manager in there now who's been in the market for a while."

John Dalrymple, GM of CableRep in Las Vegas, has indeed been in the market for years. He credited a wave of automotive spending, sparked by 0% financing deals, for helping the ad business recover. Dalrymple says the market is strong right now, thanks to several hot political races.

"Through that first week in November, your broadcast news is going to sell out, and so we've had an increase in regular business," Dalrymple said. But, for the first time, the campaigns are looking at cable. And not just Fox News Channel and CNN. Several are buying networks targeted at women, including Oxygen and Lifetime. The primary demographic for political campaigns is adults 35-plus. "It's interesting to see we've got a secondary demo of women 35-plus that they're targeting."

While the market is strong now, "the forecast in the long term is still very cautious. Most of the businesses are looking quarter by quarter," Dalrymple said. "What it means to our industry is that business breaks very late. And so you have to do a skillful job forecasting, otherwise you're going to undersell. You can't afford to get in a panic situation as far as rates go."

Dalrymple says that his business skews toward local accounts. Most advertisers use the system to buy the entire DMA, because Cox's penetration is about 70%, and ratings tend to be as high on cable as on broadcast for comparable programming. Football on ESPN did a 13.3 household rating in the DMA a few weeks back.

Cox gets spot prices for football that are comparable to what some of the broadcasters are getting. Dalrymple pegs spots on Monday Night Football at about $3,000 and Sunday afternoon games on the Fox and CBS affiliates at about $1,500, the same price he charges on Sunday nights. But that's an exception. "We need to educate the marketplace on the delivery of cable."

Dalrymple said most advertisers tend to buy network rotators, which means they'll take spots on specific networks within fairly general dayparts. For example, they'll pay $200 for a spot on Discovery or A&E from 4 p.m. till midnight. By comparison, local stations charge from $250 to $350 at 5 p.m. to as high as $3,500 in prime time.