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Policy

'Cable Can’ Canned

7/15/2005 8:00 PM Eastern

Major cable companies are abandoning the industry’s “Only Cable Can” national marketing effort to develop a new ad campaign spearheaded by the National Cable & Telecommunications Association, people familiar with the plans said last week.

Developed by the Cable & Telecommunications Association for Marketing in late 2003, the Only Cable Can push was aimed at helping cable operators compete with the national ad campaigns from DirecTV Inc. and other competitors. The campaign had been on hiatus since January, but CTAM hired Detroit-based ad agency Doner Advertising in June to produce new commercials for the campaign, which were set to debut this fall.

Sources said the decision to have the NCTA lead the effort in developing a new marketing campaign for the cable industry came after the group’s board meeting earlier this month.

Comcast Corp. president Steve Burke and Cox Communications Inc. CEO Jim Robbins called CTAM CEO Char Beales after the meeting to inform her “the NCTA has fallen in love with the telecom advertising that the telephone companies are doing, and they want to spend a significant amount of money doing the same for cable,” according to one person who was briefed on the plan but asked not to be identified.

The move to have NCTA take the lead in developing a new campaign is noteworthy, considering the trade group traditionally works on legislative and regulatory efforts. But NCTA has taken a bigger role in marketing since new CEO Kyle McSlarrow came on board, including organizing an ad blitz to tout cable’s parental-control functionality. That campaign was valued at $250 million.

Beales said CTAM will help the NCTA with the new campaign. She noted the associations have worked together on previous efforts, such as the industry’s On Time Guarantee initiative.

“We’ve decided to take a change in our strategy,” Beales said. “As we were developing our campaign and started the work … we learned that NCTA was considering creating a campaign. We got together with them and we decided that we will be more powerful working together.”

Before the cable chiefs on the NCTA board decided to change the marketing strategy, CTAM and ad agency Doner had been working on a new Only Cable Can campaign for the fall, which would have included support from all major MSOs, excluding Adelphia Communications Corp., Beales said in an interview in late June.

“Eleven MSOs are going to participate. One of our internal criticisms of ourselves was that we rushed the last campaign out without adequate time to prepare. We’ve been working really hard behind the scenes; Doner’s done a good job,” Beales said at the time.

Officials at Doner, which also produces commercials for Cox Communications Inc., didn’t respond to a request for a comment on the campaign’s termination.

TELCOS IN BACKGROUND

The new NCTA-led campaign is being organized as cable MSOs gear up for a legislative and regulatory battle with Verizon Communications Inc., SBC Communications Inc. and other regional telephone companies, and as lawmakers consider a potential rewrite of the 1996 Telecommunications Act. For months, phone companies have been running ads calling for regulatory reforms.

Cable lobbyists have been pushing federal and local regulatory authorities and franchise officials to make Verizon and SBC play on a level field when it comes to franchise and public-service obligations — a message that might eventually be delivered in the new commercials.

“NCTA and cable are facing some pretty big and powerful opponents in Washington, which is part of what’s driving this,” a source said.

NCTA spokesman Brian Dietz said the association hasn’t determined the scope of the campaign, the messages it will contain or the timing.

“At this point, there’s only been preliminary discussion with CTAM,” Dietz added.

Two people familiar with the plans said the campaign would be better-funded than the Only Cable Can efforts, which were paid for through barter deals cut with national cable networks and cash paid to two ad agencies to produce the commercials.

OCC WAS BREAKTHROUGH

Only Cable Can was the cable industry’s biggest attempt yet at cooperative marketing. The two-pronged campaign consisted of ads on national cable networks that touted the advantages of cable — such as on-demand programming — and also included joint marketing efforts with Sony Corp., Panasonic Consumer Electronics and Samsung Electronics America to promote HDTV programming on cable.

But some operators believed they were better off focusing on their individual brands and products, rather than investing money in generic cable commercials.

Others said the timing of some of the campaigns didn’t work well with their own promotions.

Charter Communications Inc., Cablevision Systems Corp. and Bright House Networks opted not to participate in the last Only Cable Can promotion — a joint “Go for 2” campaign with Sony that touted HDTV programming and football.

In a recent interview, new Time Warner Cable chief marketing officer Sam Howe said cooperative marketing campaigns work in certain markets such as New York City that feature multiple cable operators, but might be less effective in areas of the country where operators control large clusters.

“Doing it [marketing] ourselves sometimes is going to make more sense than not,” Howe said.

Only Cable Can debuted in November 2003, with a series of spots produced by Philadelphia-based ad agency Red Tettemer. They positioned cable as the best way for consumers to get on-demand movies, HDTV programming and high-speed Internet service.

But the spots, which also promoted a Web site (www.onlycablecan.com) and a toll-free number, ran only on national cable networks, through barter agreements cut with programmers.

ADS WILL BE BOUGHT

One source briefed on the NCTA plan said the new ad campaign would also likely rely on commercials that would be purchased on broadcast networks, in addition to national cable-network spots.

“The implication was that it would be paid media rather than barter, therefore it would be more broadcast than in the past,” the person said.

In addition to the national cable network “Only Cable Can” spots, CTAM and its member MSOs teamed up with consumer-electronics companies last year on ads touting HDTV sets and cable programming packages.

Those campaigns, beginning with a marketing deal with Samsung in March 2004 — timed for CBS’s coverage of the National Collegiate Athletic Association Men’s Basketball Tournament — included spots on national broadcast networks, in addition to online advertising.

In July 2004, 10 major MSOs and Panasonic teamed up on an HDTV marketing blitz timed to coincide with NBC’s coverage of the Summer Olympics. The campaign, valued at $10 million, offered consumers who bought a Panasonic television two $50 checks that could be used to pay their cable bills.

None of the spots ran during NBC’s coverage of the Olympic Trials or the actual Games, as the Peacock Network had an exclusive HDTV marketing deal with Panasonic rival Sony.

CTAM switched ad agencies in 2004, replacing Red Tettemer with New York-based agency Shepardson, Stern & Kaminsky, which had produced the industry’s “On Time Guarantee” commercials a decade earlier. SS&K created a series of spots that compared the benefits of cable to puppies, chocolate, gravity and water.

“Can puppies bring you movies on demand or pro football in high-def?” intoned the voiceover in one of the spots.

The SS&K spots drew mixed reviews from CTAM members.

ECHOSTAR COMEBACK

And some competitors, most notably EchoStar Communications Corp.’s Dish Network, ran their own commercials that touted the same type of products that were marketed in the “Only Cable Can” spots.

In what some cable marketers called a canny move, EchoStar chairman and CEO Charlie Ergen earlier this year began calling Dish’s digital video recorder capabilities “video on demand” and used the term in marketing materials. VOD had been a competitive differentiator between cable and satellite.

Ergen managed to position EchoStar’s ability to download movies to a DVR for viewing at a later date as the same product that Comcast, Time Warner Cable and other operators had spent billions to develop.

“I think that we would be remiss if we were to have cable be the only [platform] that has video on demand,” Ergen said in January when asked about the marketing tactic.

While EchoStar has relied heavily on regional and local marketing, and subsidizes advertising expenses for Dish Network resellers, rival DirecTV primarily focuses resources on national marketing.

DirecTV, which signed on high-profile ad agency BBDO last year, also exploits ties within corporate parent News Corp., running DirecTV ads in the Super Bowl and other popular programming on Fox and other News Corp. services.

September