Sales Office by Steve Lanzano

NCC I+ May Be Less Than You Think

The new NCC initiative will allow cable sellers to offer advertisers added reach on telco-owned systems and DirecTV in dozens of markets. It sounds good, but it involves a complicated system that may leave buyers far short of the homes and viewers they had paid for. TVB is keeping a close eye on NCC I+ on behalf of the advertising community. We’ve created a special NCC I+ area on our website where we’ll be posting ongoing developments.
By
TVNewsCheck,

Over the past year or so, NCC (formerly National Cable Co-op) has slowly introduced its new initiative called NCC I+. This new TV advertising offering allows NCC sellers and local cable sales reps from Time Warner, Cox and Comcast to sell local commercials on AT&T U-verse, Verizon FiOS and DirecTV.

The service concentrates on markets with growing phone company video penetration, as well as the highest-penetrating DirecTV markets. Ostensibly, this will allow a cable seller to offer higher reach in a market; formerly a drawback to buying cable TV advertising.

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Recent announcements from NCC at the American Association of Advertising Agencies (4A's) convention in Austin stated that later this year it will offer up to 25 channels of local insertion on DirecTV in 25 markets, and 50 channels in 50 markets with U-verse and FiOS.

While the penetration of the two telcos is not currently significant, the addition of local spots on DirecTV, with penetration levels of up to 30% in some western U.S. markets, makes this a potentially attractive advertising alternative.

Like any new technology, the devil is in the details. As a professional marketer, one must ask some important questions about how things work. TVB is keeping a close eye on NCC I+ on behalf of the advertising community. We’ve created a special NCC I + area on our website where we’ll be posting ongoing developments.

Looking at the distribution path of DirecTV, which sends signals from earth 22,000 miles into space and back, one has to wonder how it will work with less than a half dozen satellites covering the entire U.S. in more than 200 TV markets.

Here is how we understand it works. Once the order is sold by the cable company, an order is sent to DirecTV. DirecTV sends the local spot up to the satellite and back to the consumers’ DirecTV box where it is recorded individually on the DVR hard drive undetected by the customer. The spot resides on the hard drive until a cue is sent from the program distributor (let’s say ESPN SportsCenter). Once the cue is sent, the box finds the local spot on the hard drive and plays it in the local break built into SportsCenter.

The very basic tenant of the buyer-seller equation remains “Is what I bought actually being run as I expect it to run?” Two basic items are very important to the delivery of the advertiser’s campaign: proper running of ad schedules and stewardship of the schedules. This is where the advertiser must probe the delivery system.

  • Item No. 1: What are the points of failure in the delivery of my ads to DirecTV, to the consumers’ DVR hard drive, and to the viewers? Will atmospheric conditions (rain fade) be an issue? Will the spot trigger at the right time and with proper video and audio quality?
  • Item No. 2: The DirecTV consumer must have a DirecTV box with a DVR for this to work. How many TVs in the market have DVRs? We understand that more than half do not have a DVR. Therefore, those households will not show the local spots. This appreciably diminishes the reach of the ad campaign. Do I understand the real addition to reach?
  • Item No. 3: What about the stewardship of the schedule? Local broadcast TV stations have master control operators whose job it is to monitor the quality of the various paths of their signals and its advertising. Since each box plays out the spot one by one, there is no real way to know the spot ran because nobody can monitor the distribution system.

The devil is in the details. Every shiny, bright new technology needs a good scrubbing before it is purchased by the advertiser.

Steve Lanzano is president of TVB. Sales Office appears once a month in TVNewsCheck through the cooperation of the TVB, which solicits the columns from its staff and members. To see all the columns in the series, click here.

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Comments (9) -

Stefanie Smentek posted a year ago
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Steve, just an FYI - it's called I+ (the letter) not, 1+ (the number).
Mark Miller posted a year ago
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Sorry for the mistake, I've corrected it.
FederalGuy Nickname posted a year ago
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This has been tested for more than two years in Chicago, so before you point out potential problems, you should probably understand how rigorous the testing has been. A lot of TV stations don't have dedicated Master Control Operators in the automated central casting world that Broadcast has become. Cable has been accepted and monitored by the 4A's using automated systems for years. It works, get over it. I have not seen published figures of DVR penetration for Direct TV, but taking your 50% figure, that would increase distribution by 15%, which is significant. TVB should focus on making Broadcast TV more effective, rather than negative selling against Cable (which is also TV BTW; you're bashing your own medium). Finally, show me a Nielsen report in ANY market that has a single TV station reaching 100% Net Weekly Circulation, you can't, yet you guys keep saying that Broadcast reaches 100% of all homes in a DMA as an advantage over cable. Call a spade a spade.
joeseph Nickname posted a year ago
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Federal Guy - I don't think anyone is claiming that any broadcast station has a 100% net weekly circulation. The point is that when advertisers buy a broadcast station, every single person watching the station at that time will see their spot, unlike cable. Of course the recent developments these telco's might change that a little. The problem I have had with selling against cable in the past is they are not honest with their advertisers in telling them them their true reach. I have constantly had to educate buyers and advertisers about all the homes who are not able to see their spots.
OldBuyer Nickname posted a year ago
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And the name of the company is NCC Media, formerly National Cable Communications.
SpotGal Nickname posted a year ago
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What about all the upcuts and cutoffs that happen when cable inserts a local spot? If I was an advertiser and saw my spot on a cable network, in one of their 5 minute pods, and it started after the national spot it is covering, I'd be very, very reluctant to pay for the spot(s).....I think NCC and the cable MSOs should work on getting the local spots to run cleanly before they branch out into DirectTV etc.
Insider Nickname posted a year ago
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NBC cannot get back into the NBC Nightly News at 6:57pm EVERY night on their Flagship WNBC without showing a second or so of the PSA filler from the network feed. If NBC cannot get in and out of local avails cleanly in the #1 market, why would you expect a cable company anywhere in America be any different?
Adam Armbruster Nickname posted a year ago
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Most clients I meet have NO IDEA that their local cable insertion ads are not also being see on dish homes. This is just one example of cable ad sales "guilt by omission".
Media2011 Nickname posted a year ago
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There are a laundry list of issues. 1. This has not been tested for two years in Chicago with Direct TV. Runs were accomplished with DISH on regional sports networks. The technology for DISH local insertion is very different than with DIRECT which is utilizing DVRs. 2. Cable can not count their own homes served accurately (Nielsen does their calculation which is then bounced against Cable MSO internal numbers to come with a hybrid estimate) so one wonders how they will count satellite homes. 3. Cable uses a 92% threshold to bill their advertisers. This means they can miss 8% of the households and stil bill out the commercial as run. It will be interesting to see how they carries over into the DIRECT world. DIRECT tv DVRS are not all capable of delivering local commericals. So a DMA may have 200,000 DIRECT TV homes but only 100,000 of them may actually be insertable. Can cable accurately count those. Furthermore, boxes go bad all the time so how do they know if the commercial aired in an individual box. 4. The point above is well taken with regard to technical issues. Adds get clipped. Audio levels are all over the board. One network the commercial blows you out of your seat and the next network you can't hear the commercial. Clients complain all of the time. So it is hard to imagine the cable MSOs and NCC being able to accurately show a client exactly how many homes aired their commercial given all the different platforms. So will technical run rates be factored into if a commercial is billed out. I doubt it. 5. Beyond technical issues, platform delivery, threshold, accurate home delivery...then comes insertable inventory. If DIRECT TV provides 25% of their inventory on the top 25 networks that equates to 1 commercial per hour on the average cable network. Buyers complain now about lack of inventory on top tier networks and nominal rating points. It will be a challenge. And will cable continue taking credit for full DMA points on networks like USA or will they begin to sell buyers only the points they deliver based on household penetration. Althought the intiative is a good one (Clients want one solution in a DMA for cable) the current leadership in many MSOs lack the knowledge and commitment to deliver solutions that a buyer (agency) will feel they can explain to their client. But it is a start.

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