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Monday, November, 5 2012

Political fallout: TWC joins cable’s $1 billion advertising club

By: Stewart Schley Monday, November, 5 2012

Not exactly a news flash to report political advertising revenue skyrocketed in the third quarter on cable systems. But the extent of the category’s contribution is still impressive, and it has helped achieve a landmark in the business: Now there are two U.S. cable companies that collect more than $1 billion in annual local advertising revenue.

The newcomer is Time Warner Cable, which total 2012 advertising revenue surpassed the $1 billion mark late last month. For the July-Sept. quarter, ad sales rose 22% from a year ago ($264 million versus $216 million), mainly thanks to heavy political spending in states including Wisconsin and Ohio, where Obama and Romney are battling. (Comcast has reported $1 billion-plus in local ad revenue since 2003.)

Interesting to note that one victim of the success is the local cross-channel inventory normally reserved for pitching Time Warner Cable’s own products. COO Rob Marcus told analysts TWC freed up inventory for fever-pitch political demand by kicking off its own spots. “We worked in recent weeks to maximize the political-advertising opportunities in battleground states like Ohio and Wisconsin by selling ad inventory that we normally use for internal marketing,” he said. Cross-channel typically accounts for more than 20% of available ad avails for most cable operators.

Cable companies recognize political ads are ephemeral, disappearing almost as quickly as they arrived as campaigns wind down. That will make forthcoming revenue comparisons tough. But TWC noted there are bright spots beyond political, as the company also saw a surge in automotive advertising in Q3. ( CORRECTION : Earlier version reported a 12% increase in auto for Q3. That was incorrect. TWC actually reported a 12% increase in non-political advertising for the quarter.)

“Political demand won't last forever but I think we've made the most of it this year,” Marcus said.


(Nov. 5, 2012)

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