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It's called "Local Insertion." So the people in one market see local commercials, automatically inserted into that network's feed at the local cable head-end.
Meanwhile, people in another market are watching the same cable station, but they get a different commercial for some local business.
And there are any number of other local cable operators wh chose NOT to insert on some channels. So people in those markets see whatever commercial the network decided to run in the "local" slot. The network knows it's going to be covered up in most markets, so they don't charge much for it. Often, it's a PSA (Public Service Announcement) or a promotion for another show on that network, or a bonus spot for a national client. (They paid for 100 beer commercials, they get 100 "freebies" BUT a good number of the freebies will never be seen because the local operator put on a local restaurant commercial.) Lastly, they could be PI (Per Inquiry) spots, where the network only gets paid when someone gets up and dials 1 800 BlahBlahBlah - BlahBlahBlahBlah.
Now, say you are a local cable company. for each of the insertion networks, you have a certain number of local breaks per hour. (usually 4 breaks of 60 or 2 breaks of 120 seconds.) You'll have a clock that shows (roughly) when the commercials air. The local spots are your inventory. Depending on the network and your market size, you might sell thirty second spots for anywhere from 5 dollars a spot (woe be unto you) all the way up to 200 dollars a spot. (there is no upward limit, but i don't know of any cable spots getting more than $200 per ad.-feel free to correct me.)
Source(s):
many late nights feeding the u-matic monster at the headends.
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How It Works:
When it comes to television, cable television is completely different from network television. Lifetime, ESPN, TNT, Food Network, MSNBC, TBS, LMN, and all the other cable TV stations each have a specific audience--all day long every day--that makes it easier for advertisers to purchase ads for their target markets.
When you're on a budget, there's a real advantage to buying cable TV ads--the stations can offer you targeted neighborhoods and eliminate areas that you don't necessarily want or need covered. This is something that network television can never do for you. The large cable companies like Time Warner cover many areas, while cable companies like Adelphia "fill in the blanks" and cover smaller areas and neighborhoods for pennies per viewer.
When it's time to select the areas you want covered by your ads, each cable company will provide you with a map that's divided into sections, and from those sections, you choose the areas you want to buy ads in. This ability to pinpoint viewing areas is a huge help to budget-conscious business owners. And with a lower per-spot cost than you'll find on the networks, you can afford to run a decent number of commercials, which is one of the big requirements of successful advertising--frequency! Your customers have to see your commercial to be able to react to it.
Although you usually buy cable on a channel-by-channel basis, you always have the option of pinpointing certain programs. And cable television's a good place to look for specific programs that fit your audience for a reasonable cost. For instance, you can choose shows like Flip this House or Design on a Dime from the Home and Garden Television station and be sure you're reaching the right audience--even if it's not a huge audience, it's the right one--if you sell home improvement items, lighting fixtures or furniture, or if you have an interior design or construction business. These niche programs make it easy to reach specific audiences because they focus very narrowly on the particular interests of the viewers.
Another advantage is that with such a large number of stations available, getting bumped from your cable television schedule is almost unheard of--an event that's not so uncommon on network television. If you do get bumped, they're almost sure to have open inventory on one or more of their stations that will reach your audience, even when it's time for big sports playoffs, the holidays are creating a high demand for air time, or when politicians are eating up as much inventory as they possibly can.
Your local cable TV sales rep will be able to sell you any and all of the available channels that run in your area and package them together in a neat, little bundle at a discount rate, especially at the beginning of the year when they're looking for annual contracts. There will even be special, first-quarter packages offered where you commit to run a certain number of commercials on various channels during the year for a small per-spot cost. Then, all year long, your commercial will pop up on the channels you've chosen. And you're free to change your commercial anytime during the year to reflect your business' sales or special events.
Source(s):
http://www.entrepreneur.com/advertising/adsbytype/article83082.html
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By doing this, cable companies can sell many local commercials to many areas.
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Source(s):
http://law.lexisnexis.com/lmc/how-local-cable-advertising-works.asp
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Answered Question
M$2
April 09, 2009 02:35 AM
Every so often we'll see a local "mom and pop" company advertising on a major cable network channel, like CNN. How can they afford this?
Maybe this is remnant ad space that went unsold, but even that I feel would to a traditional "large" advertiser before given to a local mom-and-pop business. These "local" ads on CNN are low quality and typically lack the polish a normal network ad. Not sure how they are able to get a major TV spot or afford it.
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Best Answer Decided by Votes
| April 09, 2009 05:00 AM |
Meanwhile, people in another market are watching the same cable station, but they get a different commercial for some local business.
And there are any number of other local cable operators wh chose NOT to insert on some channels. So people in those markets see whatever commercial the network decided to run in the "local" slot. The network knows it's going to be covered up in most markets, so they don't charge much for it. Often, it's a PSA (Public Service Announcement) or a promotion for another show on that network, or a bonus spot for a national client. (They paid for 100 beer commercials, they get 100 "freebies" BUT a good number of the freebies will never be seen because the local operator put on a local restaurant commercial.) Lastly, they could be PI (Per Inquiry) spots, where the network only gets paid when someone gets up and dials 1 800 BlahBlahBlah - BlahBlahBlahBlah.
Now, say you are a local cable company. for each of the insertion networks, you have a certain number of local breaks per hour. (usually 4 breaks of 60 or 2 breaks of 120 seconds.) You'll have a clock that shows (roughly) when the commercials air. The local spots are your inventory. Depending on the network and your market size, you might sell thirty second spots for anywhere from 5 dollars a spot (woe be unto you) all the way up to 200 dollars a spot. (there is no upward limit, but i don't know of any cable spots getting more than $200 per ad.-feel free to correct me.)
Source(s):
many late nights feeding the u-matic monster at the headends.
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Other Answers (4)
April 09, 2009 02:46 AM
Have you ever seen a commercial on cable TV begin and then immediately switch to a local commercial like the one you mentioned? This is because there are ads playing to different markets all over the nation at the same time. I hate to copy/paste, but this is really well put: How It Works:
When it comes to television, cable television is completely different from network television. Lifetime, ESPN, TNT, Food Network, MSNBC, TBS, LMN, and all the other cable TV stations each have a specific audience--all day long every day--that makes it easier for advertisers to purchase ads for their target markets.
When you're on a budget, there's a real advantage to buying cable TV ads--the stations can offer you targeted neighborhoods and eliminate areas that you don't necessarily want or need covered. This is something that network television can never do for you. The large cable companies like Time Warner cover many areas, while cable companies like Adelphia "fill in the blanks" and cover smaller areas and neighborhoods for pennies per viewer.
When it's time to select the areas you want covered by your ads, each cable company will provide you with a map that's divided into sections, and from those sections, you choose the areas you want to buy ads in. This ability to pinpoint viewing areas is a huge help to budget-conscious business owners. And with a lower per-spot cost than you'll find on the networks, you can afford to run a decent number of commercials, which is one of the big requirements of successful advertising--frequency! Your customers have to see your commercial to be able to react to it.
Although you usually buy cable on a channel-by-channel basis, you always have the option of pinpointing certain programs. And cable television's a good place to look for specific programs that fit your audience for a reasonable cost. For instance, you can choose shows like Flip this House or Design on a Dime from the Home and Garden Television station and be sure you're reaching the right audience--even if it's not a huge audience, it's the right one--if you sell home improvement items, lighting fixtures or furniture, or if you have an interior design or construction business. These niche programs make it easy to reach specific audiences because they focus very narrowly on the particular interests of the viewers.
Another advantage is that with such a large number of stations available, getting bumped from your cable television schedule is almost unheard of--an event that's not so uncommon on network television. If you do get bumped, they're almost sure to have open inventory on one or more of their stations that will reach your audience, even when it's time for big sports playoffs, the holidays are creating a high demand for air time, or when politicians are eating up as much inventory as they possibly can.
Your local cable TV sales rep will be able to sell you any and all of the available channels that run in your area and package them together in a neat, little bundle at a discount rate, especially at the beginning of the year when they're looking for annual contracts. There will even be special, first-quarter packages offered where you commit to run a certain number of commercials on various channels during the year for a small per-spot cost. Then, all year long, your commercial will pop up on the channels you've chosen. And you're free to change your commercial anytime during the year to reflect your business' sales or special events.
Source(s):
http://www.entrepreneur.com/advertising/adsbytype/article83082.html
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April 09, 2009 02:53 AM
Cable companies have the ability to sell a specific time slot on a specific channel for a specific region. It appears that the commercial is showing on CNN to everyone in the nation to you, but in reality it is only showing in your area. By doing this, cable companies can sell many local commercials to many areas.
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Reply
April 09, 2009 02:56 AM
Local cable operators pay national networks for the right to run a cable channel in their zone. In return, the national network provides the opportunity to insert local advertising (usually 2-4 minutes per hour). There are 9,000+ cable zones and 105 channels. Audience profiles and habits differ around the country.
Source(s):
http://law.lexisnexis.com/lmc/how-local-cable-advertising-works.asp
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