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MEMORY LANE: Advertising’s missing link

Sat, 01/26/2008 - 7:15pm
Stewart Schley, Media & technology writer, Englewood, Colo.

Stewart Schley

Getting spots on the air
meant shipping dozens
of video tapes to the
correct addresses

Twenty years before there was a secretive cable industry initiative called “Canoe” meant to rethink the way cable advertising works, there was a precursor effort under way in Los Angeles.

In a market where dozens of cable providers divided up the territory like a patchwork quilt, only the most patient of regional advertisers were willing to try to formulate a city-wide cable advertising campaign. Doing so required negotiating individually with each of the cable operators to clear time on their channels, which themselves varied by market. Just as frustrating to would-be advertisers were pricing schemes that varied wildly among providers, producing big differences in cost-per-thousand rates. If a willing sponsor made it past those two hurdles, another obstacle loomed: getting spots on the air meant shipping dozens of video tapes to the correct addresses.

An attempt to solve the puzzle of advertising on cable in the nation’s second-largest media market began in 1988, when a group of cable industry executives from five Los Angeles-area companies met to discuss ways to collaborate. At the time, the five represented operators reaching 650,000 households – less than half of the cable homes in the Los Angeles DMA. But it was a start.

From the beginning, what made Adlink stand out was a willingness among its owner/operators to concede individual pride for the collective benefit of the whole. There were two key decisions. First was an insistence on getting rid of the cumbersome tape-delivery process. Rather than demand that agencies shuttle tapes around the city to various cable headends, the Adlink originators agreed from the start to link (get it?) their operations together to receive advertising content from a shared network that would mean an advertiser had to supply only one copy of a commercial. Today the practice is common among “hard-wired” interconnects that distribute advertising in cable spot markets across the U.S. But in the late 1980s, it was radical; only a few big-city interconnects had taken a similar route.

The second important decision, and the one that was more difficult to negotiate, had to do with the allocation of advertising inventory. Cable operators then – and still today – receive only a nibble of local-ad time from networks like ESPN or CNN, which typically devote no more than three minutes per hour for their cable affiliates to sell locally. Adlink’s originators, even though just as pressed for inventory as the rest of the industry, agreed in advance to contribute about 20 percent of their available ad time to the shared collective. But not just any 20 percent. Instead, the operators pledged to devote exactly the same in-network ad slots to the regional interconnect. That meant that the ESPN local ad break occurring at 20 minutes past the hour, for example, was off-limits for the local signatories to sell in their own territories; it would be devoted exclusively to Adlink’s inventory. Pooling ad avails in that manner eliminated the problem of inventory-clearance that bedeviled regional cable advertising at the time. By setting aside a significant chunk of advertising time, Adlink had announced it was taking seriously the charge of helping DMA-wide advertisers clear time across the market.

Those weren’t the only important decisions, but they set the stage for most of the significant business and technology approaches that would follow. Adlink made good on its hard-wired vow by setting up what was then easily the cable advertising industry’s most advanced delivery network for regional advertising. Not only did Adlink reserve satellite-transmission time to beam spots to its participating cable systems, but the interconnect itself purchased and maintained separate ad-insertion hardware at each headend, eliminating any possibility that inventory or spots would be mixed-up between local-market insertion and regional display. In addition, once the infrastructure and inventory certainty were in place, Adlink set up its own sales and research operations, dispatching veteran market media sellers to peddle a new type of TV advertising delivery.

Momentum rose, not just within Los Angeles but across the industry. As Adlink’s revenues and its membership swelled – the interconnect now spans close to 3 million homes – others took notice. Today the very definition of a modern advertising interconnect, as catalogued by National Cable Communications, the industry’s national spot advertising rep firm, is taken directly from the Adlink playbook. Its hallmarks are one-stop delivery, shared inventory allocation and market-wide presence. Today those are de facto standards, expected and delivered across the industry. But in 1988, they were the stuff of vision.

ss_edit@comcast.net

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