Skip to main content

U.S. Cable TV Local Advertising Hits Target

After a decade of building systems, U.S. cable operators have grown their local advertising sales into a $4.3 billion business last year, according to Kagan Research. That's up $1 billion since 2002.

Local ads inserted in available slots in national basic cable networks -- such as ESPN and Lifetime -- are just part of the story. Cable operators are also placing commercials in video-on-demand (VOD) content offered free to their subscribers.

"2007 is expected to be the year VOD advertising really takes off," says Derek Baine, senior analyst at Kagan Research. "Comcast and other major MSOs invest heavily in ad-insertion technology, which will enable them to deliver more targeted ads and relevant information to ad buyers."

Going forward, Kagan sees growth in the high-single-digit rate. While not explosive, the rate can be viewed as substantial given the local ad sector is already a multi-billion-dollar segment. Among the big cable system operators, Comcast has made the biggest push into VOD by rebuilding its infrastructure backbone to facilitate interactive and on-demand services.

Kagan newsletter "VOD & ITV" Investor notes that 95 percent of Comcast's cable VOD views are of free programs -- which often contain ads. The newsletter adds: "Comcast reported traffic for newly released prime-time shows on-demand increased 10X to 20X for CBS programs after the 99-cent fee was dropped."

Comcast averaged the most revenue per subscriber in terms of local ad revenue in 2006. "Cable MSO ad revenues should grow at a healthy clip through 2011, as clustering and rising cable ratings make operators increasingly attractive to national and regional advertisers," notes Kagan.

Kagan doesn't mention the telco IPTV deployments, but I would expect that local advertising will eventually represent a significant source of ongoing revenue. In fact, this is a major opportunity for IPTV to provide value-added promotional capabilities to local advertisers. For those telcos who chose not to sell-off their Yellow Pages business, they now have a substantive advantage.

Popular posts from this blog

How Cloud Fuels Digital Business Transformation

Across the globe, many CEOs invested in initiatives to expand their digital offerings. User experience enhancements that are enabled by business technology were a priority in many industries. Worldwide end-user spending on public cloud services is forecast to grow 21.7 percent to a total of $597.3 billion in 2023 -- that's up from $491 billion in 2022, according to the latest market study by Gartner. Cloud computing is driving the next phase of digital transformation, as organizations pursue disruption through technologies like generative Artificial Intelligence (AI), Web3, and enterprise Metaverse. Public Cloud Computing Market Development "Hyperscale cloud providers are driving the cloud agenda," said Sid Nag, vice president at Gartner . Organizations view cloud computing as a highly strategic platform for digital transformation initiatives, which requires providers to offer new capabilities as the competition for digital business escalates. "For example, generativ

Mobile Device Market Still Awaiting Recovery

The mobile devices market has experienced three years of unpredictable demand. The global pandemic, geopolitical pressures, supply chain issues, and macroeconomic headwinds have hindered the sector's consistent growth potential. This extremely challenging environment has dramatically affected both demand and supply chains. It has led to subsequent inflationary pressures, leading to a worsening global cost of living crisis suppressing growth and confidence in the sector. In tandem, mobile device industry stakeholders have become more cautious triggering market uncertainties. Mobile Device Market Development Operating under such a backdrop, the development of mobile device ecosystems and vendor landscapes have been impacted severely. Many of these market pressures persisted throughout 2022 and now into 2023, borne chiefly by the smartphone market. According to the latest worldwide market study by ABI Research, worldwide smartphone shipments in 2022 declined 9.6 percent Year-over-Year

Digital Talent Demand Exceeds Supply in Asia-Pac

Even the savviest CEO's desire for a digital transformation advantage has to face the global market reality -- there simply isn't enough skilled and experienced talent available to meet demand. According to the latest market study by IDC, around 60-80 percent of Asia-Pacific (AP) organizations find it "difficult" or "extremely difficult" to fill many IT roles -- including cybersecurity, software development, and data insight professionals. Major consequences of the skills shortage are increased workload on remaining digital business and IT employees, increased security risks, and loss of "hard-to-replace" critical transformation knowledge. Digital Business Talent Market Development Although big tech companies' layoffs are making headlines, they are not representative of the overall global marketplace. Ongoing difficulty to fill key practitioner vacancies is still among the top issues faced by leaders across industries. "Skills are difficul