Cable advertising revenues have increased steadily since the mid-1980s and exceeded $12 billion in 2002. Much of this growth has come from advertising on the national cable networks such as CNN, ESPN, USA, and MTV. However, many national advertisers have been shifting some of their advertising budgets to spot cable and purchasing through local operators as well as the national cable networks. Over the past four years, spot cable revenues have averaged 20 percent annual growth, reaching nearly $33 billion in 2002.
Like broadcast TV, cable time can be purchased on a national, regional, or local (spot) level. Many large marketers advertise on cable networks to reach large numbers of viewers across the country with a single media buy. Regional advertising on cable is available primarily through sports and news channels that cover a certain geographic area. Many national advertisers are turning to spot advertising on local cable systems to reach specific geographic markets. Spot cable affords them more precision in reaching specific markets, and they can save money by using a number of small, targeted media purchases rather than making one network buy. The growth in spot cable advertising is also being facilitated by the use of interconnects, where a number of cable systems in a geographic area are joined for advertising purposes. These interconnects increase the size of the audience an advertiser can reach with a spot cable buy. For example, Chicago Cable Interconnect reaches more than 1.7 million subscribers in the greater Chicago metropolitan area; the ADLINK Digital Interconnect delivers 3 million cable subscribers in Los Angeles and four surrounding counties. New York Interconnect reaches 3.6 million households in the largest market area in the country and offers advertisers 31 different cable networks. More sophisticated interconnect systems are developing that will pool large numbers of cable systems and allow spot advertisers to reach more viewers. These new systems will also allow local advertisers to make more selective cable buys, since they can purchase the entire interconnect or one of several zones within the system.
While spot cable is becoming very popular among national advertisers, it has some of the same problems as spot advertising on broadcast TV. The purchasing process is very complicated and time-consuming; media buyers must contact hundreds of cable systems to put together a media schedule consisting of spot cable buys. Local cable systems also do not provide advertisers with strong support or much information on demographics, lifestyle, or viewership patterns.