SHHH--MY TV COMMERCIAL IS ON
With Shoemaker's Warehouse tucked away in an industrial part of Atlanta, Betsy Robbins had always relied on radio and newspaper advertising to draw customers to her retail shoe store. Three years ago, she decided to try something different: cable TV.
Now she's a veritable TV evangelist--singing the praises of cable advertising to other small-business owners she meets. The ads, featuring a selection of her shoes, not only brought new shoppers into her 20-employee store but also were cheaper and easier than she had ever imagined: Prime-time spots cost only $50 to $150, and her cable system offered plenty of help. ''I've tried all kinds of media, and I get better and more measurable response from cable than from anything else,'' she crows.
And since Atlanta's cable company installed digital technology last April, Robbins is happier still. She has more choices of networks on which to advertise and can pay less to reach the audience segment most likely to buy.
DIGITAL BREAKTHROUGH. Often intimidated in the past by the very notion of TV advertising, small-business owners like Robbins are making their TV debuts, promoting everything from neighborhood diners to accounting firms. In a survey of about 500 representative small-business owners earlier this year by Cicco & Associates Inc., a consulting firm in Murrysville, Pa., 20% said they had used television advertising, up from 11% in 1990.
''Just as small-business owners are becoming more competent in their marketing skills and can afford more adventuresome marketing tools, cable TV has come along with more localized audience coverage,'' says small-business consultant John A. Cicco, the firm's president.
What's driving much of the change is the same force at work everywhere: digital technology. So far, 21% of cable systems nationwide, including most of the biggest, have converted to so-called digital insertion, in which ads, stored on a computer disk, can be called up and transmitted instantaneously. In the past, each day's local ads were put on videotapes, one for each network carried by the cable system. There wasn't time to make a tape for each cable network, and any change in ad scheduling required a new tape. So millions of minutes of cable ad time simply couldn't be used by local advertisers.
Now, with digital insertion, new ads can be put in the lineup at a moment's notice, and cable systems can sell ad time on more networks. Most important, it is now easier to split up subscribers into ever-smaller geographic zones and sell different advertisers the same time slot on the same network in each zone. That's good news for the small advertiser, because it is cheaper.
For example, Cable Advertising of Metro Atlanta (CAMA), the advertising arm of MediaOne Inc., which operates Robbins' cable system in Atlanta, charges a basic rate of $300 for a 30-second prime-time commercial on CNN to reach all 807,237 subscribers in its 21 geographic zones. But CAMA charges just $45 to target the 103,000 subscribers in central Atlanta's Fulton County and a mere $15 to reach Walton County's 7,000 cable subscribers.
Digital technology has had another side benefit: improving the quality of a low-budget ad. Digital, which makes editing easier, yields clearer pictures and allows a greater variety of creative techniques such as melding images. '''Good enough' is starting to look pretty good,'' says Jim Stiener, vice-president of sales and marketing for ProVideo, a Madison (Wis.) production house.
Besides the steady march of new technology, new advertisers are seeking out cable simply because today 67% of American households get at least basic service and spend more than half their TV viewing time watching cable. Meanwhile, niche networks catering to everyone from history buffs to rock-music fans allow an advertiser to reach the folks most likely to buy a particular product or service.
While few entrepreneurs rely exclusively on TV, it's a compelling option to add to the mix. ''Certain products, like cars, are shown more effectively in a moving medium,'' notes Bill Hamilton, president and CEO of theAgency, an advertising firm in Westlake Village, Calif. Then, too, cable is often the best way to reach certain demographic groups. For example, younger shoppers are more likely to watch the tube than read newspapers. And simply being seen on television can lend a business a certain credibility.
Producing an ad is cheaper than most people think. ''There's a built-in fear--unjustified--that you need big budgets to get on television,'' says Gad Romann, president of New York-based ad agency the Romann Group.
Production costs can vary widely--from as low as $500 to many thousands of dollars for a truly classy job. Consultant Cicco estimates small businesses using TV spend an average of $35,000 a year on the medium. As a rule of thumb, production costs shouldn't be more than 25% to 35% of the total TV budget. In fact, sometimes it's even possible to get your ad spot produced for free by a cable system eager to sell airtime.
But since a TV commercial is still pricier to produce than a print or radio ad, mistakes are costlier. ''You've got to make sure your creative is right on your message and your media buy is dead on target, too,'' says Eric Johnson, senior vice-president of marketing for Activision Inc., a video-game maker in Santa Monica, Calif., that uses TV advertising. ''Small companies have to analyze the market more carefully'' than big ones.
While cable is usually a better option for small advertisers, broadcast television can be viable in some parts of the country. Time on local broadcast network affiliates, which usually reach a wide metro area, can cost just a few hundred dollars in some markets for a half-minute of prime time.
In Wisconsin, for example, both Michael Dix, owner of a four-store frozen dessert chain, and Scott Chalmers, a jeweler, advertised on the evening news of their local CBS affiliate, covering 11 counties in and around Madison. Response was good enough to induce Chalmers to boost his TV spending 175%, to $54,000 a year. Dix, with a total ad budget of $35,000, was wary of TV at first, according to his advertising agent Laura Geisking, president of the Creative Company in Monroe, Wis. Now, she says, ''he's so stuck on TV I can't get him to try anything else.''
As small advertisers consider TV for the first time, cable companies, video producers, and ad agencies are reaching out with specialized services. Often, local TV stations and cable systems will rent a crew and cameras for as little as $65 per hour and studio time for about $100 to $125 an hour. Time Warner City Cable in New York set up its own production arm in 1992 and has made ads for hospitals, hotels, and restaurants. Last year, seeing the small-business market growing, the Wisconsin agency ProVideo opened Pro2 solely to work with small TV advertisers.
Creating a spot can actually be fun. Dix was nervous the first time, when a film crew, hired by Geisking from a local TV station, shot four hours of footage of two kids eating ice cream to make two family-friendly, 10-second spots. This year, Dix is the star, interviewing people in banana suits for the job of ''Top Banana'' at Michael's Frozen Custard.
Although shoe-retailer Robbins and others do their own media buying, they benefit from the demographic research provided by local cable operators. Robbins, for example, has learned to use MTV most extensively in zones close to Atlanta's urban center, where more of her potential customers watch the music channel.
Media buyers also have tricks to get bargains. The price of TV time fluctuates with demand. Ad agent Geisking has a deal with local stations to call at the eleventh hour if they have unsold time. That helps her clients, mostly small businesses, get slots at fire-sale prices. She also buys cheap pre-Christmas slots the day after Thanksgiving.
In the case of Frank Geluso, president of FSIWebs, a 30-person Web design and hosting company in Glen Rock, N.J., the astute use of TV advertising let him effectively draw customers to the Internet. A past advertiser on WINS and WCBS radio stations, Geluso switched to cable-TV ads last April to target the affluent counties of Westchester in New York and Bergen in New Jersey. He spends about $3,000 a month on business networks like MSNBC and CNBC. ''Radio is typically $400 a minute and 1.3 million hear it, while [cable] TV is about $50 a half-minute, and only a couple hundred thousand see it,'' Geluso says. But, he adds, the few hundred thousand are a better bet: ''With radio, the call volume was excellent, but the people who call from TV are more likely to do business with us.''
Geluso brainstormed with Multivision Communications Inc., a Franklin Lakes (N.J.) video company, to create his 30-second commercial--a film-noir nod to Humphrey Bogart replete with a mysterious, leggy ''dame'' and private eye. Cost: about $5,250. Multivision did everything from hiring the actors to editing but worked closely with Geluso over the month from concept to final cut. The end result: a stylish, clever ad that does the trick. As Bogie might say, there are plenty of reasons these days to start a beautiful friendship--with TV.
By Edith Hill Updike, with Robin D. Schatz, in New York
Updated Oct. 2, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.