Once, TV time was so costly that a spot buried in a Godzilla movie on a UHF station at 3 a.m. was all a local car dealer could afford.
Now, thanks to the explosion in cable TV channels, Tony Buttacavoli of Fullerton Dodge is popping up at every click of the remote control.
For $12,000 per month--his entire ad budget--Buttacavoli becomes an ubiquitous pitchman, with 30 commercials a week reaching 87,000 cable subscribers in Orange County. Sales have soared to 100 cars per month from 40 since he started a year ago, he says.
Retailers from car dealers to furniture outlets to restaurants are at the forefront of a shift in the way advertising dollars are being allocated--a switch to local cable ads that doesnot bode well for traditional media outlets, such as local TV and radio stations, newspapers and even magazines.
Local advertising on cable is estimated to have jumped 21% to $761 million last year. In 1992, it is expected to increase 19%. Though still a fraction of the $15.4-billion local broadcast advertising pie, cable ads are projected to hit $1.5 billion by 1995 and to continue mushrooming.
"A significant amount of viewership has shifted from broadcast to cable over the last decade," says Alan McGlade, founder of Ad Link, which places national advertisers on a network of 29 local cable TV systems in the Southland. "The next step, which is already beginning to happen, will be a shift in advertising from broadcast to cable."
In Los Angeles, local cable advertising is expected to reach $50 million this year, rising at a rate of 15% to 20% annually. And Ad Link is projected to take in an additional $20 million from national advertisers.
Until recently, many cable systems did not have the costly equipment needed to run local commercials, though cable networks allocated two to three minutes per hour for local advertisers. Instead, viewers saw promotions for upcoming shows.
But thanks to recent technological developments in tape storage and video transmission, many cable systems can now insert local commercials into 12 different cable networks at the same time. Within a year, cable systems are also expected to begin installing digital commercial equipment that will significantly upgrade the quality of the commercials.
"Virtually any system of any size is now selling local advertising," says Stuart Schley, editor of Cable Avails, a newsletter covering the nascent local cable advertising market.
