Roanoke Times Copyright (c) 1995, Landmark Communications, Inc. DATE: THURSDAY, March 5, 1992 TAG: 9203050131 SECTION: BUSINESS PAGE: B9 EDITION: METRO SOURCE: The New York Times DATELINE: LENGTH: Medium
Cable ad sales jumped to $3.02 billion in 1991, 18 percent more than the previous year. Of that, two-thirds was spent on cable networks and the rest on regional networks or local advertising.
The extraordinary growth came partly because of coverage of the Persian Gulf war and major league baseball. But in absolute terms, the increase represented a smaller number of dollars than a comparable percentage increase would in network television.
Since 1981, when basic-cable billings totaled $121 million, or just 1 percent of all television and cable spending, the percentage of dollars going to cable has been rising sharply. Last year, when advertisers spent a total of $28.9 billion on TV and cable, about 10 percent went to cable.
But even the cable industry expects growth to slow in 1992. Larry Gerbrandt, a cable programming expert at Paul Kagan Associates - a consulting firm in Carmel, Calif., that tracks cable spending - forecasts a 15 percent increase next year. Advertising agency executives are not quite that optimistic.
Historically, cable buyers pay less to reach each viewer, usually about a 50 percent discount, Gerbrandt said, partly because cable still does not reach the entire TV universe and that worries some national advertisers.
But over the past year, the difference has declined somewhat, according to Richard Castera, the executive vice president and U.S. director of media services at J. Walter Thompson.
It has not been so much the cable services raising their prices as the broadcast networks cutting theirs, thus closing the gap, Castera explained.
The cost of reaching every 1,000 viewers has "come down at the networks," Castera said. "It is certainly not unheard of to get 15 percent to 20 percent below last year's up-front costs."
by CNB