The boom in cable television has opened a world of advertising for small businesses. Across the country, "air time" on cable sells for a few dollars per half minute, compared with hundreds or thousands of dollars on conventional local TV.
William H. Dumalski, owner of Chain-O-Lakes Travel Service in McHenry, Ill., usually spends $600 to $700 a month to advertise in the local newspaper and Yellow Pages. But last winter some of his ad budget went to TV when Lakes Cablevision Inc., the McHenry cable operator, started selling ad time. He paid $157 a week for 21 half-minute commercials for vacation packages to sunny resorts. The ads appeared on a variety of programs including Cable News Network.
"Customers said they saw our ad or TV," says Dumalski. "In this business, some people come in only once or twice a year, so it's important to make them remember us." He plans an expanded ad campaign this winter to reach the system's 10,000 households.
Cable advertising barely existed a few years ago. Cable-TV systems had simply relayed on-the-air signals to areas with poor reception. Then, in the mid-1970s, communications satellites revolutionized the business. Cable operators suddenly could point a small "dish" at the sky and bring in channels from distant states -- even programs produced just for cable, unavailable from broadcasters. While franchisers rushed to wire cities and suburbs, more than 30 cable-TV networks sprang up.
Cable systems handle ads much as conventional stations do. Both typically put a few minutes of local commercials into each network show. But cable systems operate town-by-town, usually reaching only several thousand homes, rather than blanketing several million. Thus cable ad time costs a fraction of what broadcast time does; cable rates are more on a par with small-town radio stations. Lakes Cablevision, for example, charges $6.90 per half-minute spot, purchased in a package of 3 a day for 13 weeks. For 12 spots a day, the rate drops to $4.32 each. The company also will produce the commercial in its studios free of charge.
According to the Cabletelevision Advertising Bureau in New York, 600 to 700 of the country's 5,200 cable systems have started selling local ad time. The bureau is setting up a rating system to find out how many people watch cable shows, and when ratings become available, stations plan to use them to set ad prices. Declares a bureau spokeswoman: "The prices are shocking -- they're way too low."