Life at Irvine Company’s The Village at Spectrum Center apartments is a glamorous whirl of sports, shopping and poolside luxury. At least that’s how it looks on TV.
A commercial for the apartments runs in between CNN segments and on other cable channels on Cox Communications Inc.’s South County network.
The sleek ad is a far cry from the cheesy local commercials that abruptly cut into national ad space on some cable systems.
Atlanta-based Cox, which serves about 270,000 homes in Newport Beach, Irvine and the rest of South County, has spent the past five years developing its local advertising business.
The company has built a digital production studio, equipped two vans for remote shots and staffed a team of production and sales people.
“There is nothing quite as impactful as a TV commercial done locally here,” said Derrick Davidson, vice president and general manager of Cox Media, the cable operator’s advertising division.
Cox has used its South County operation as a testing ground for high-end production gear used to create local commercials.
The market Cox serves here represents a minority of the county’s population but is home to some of its biggest companies and wealthiest residents.
“It’s all about the budgets,” said Garrett Dirks, Cox’s production manager and executive producer. “Our clients have the luxury of having a couple extra dollars for their production budgets.”
Cox is the largest cable operator in the county. New York-based Time Warner Cable Inc. is second with about 200,000 households in North County.
“Our cable penetration within the Cox coverage area is much higher than most cable markets reaching about 82% of the households in South Orange County,” Davidson said. “It’s such a strong and compelling reason for advertisers to use us.”
Other advertisers include Newport Beach Mercedes-Benz dealer Fletcher Jones Motorcars and Santa Margarita Ford.
Some advertisers turn to Cox to produce their commercials. The cable operator works with them to come up with ideas and then shoots, produces and airs the commercials.
That was the case with Irvine Co.’s Village apartments commercial.
In other cases, Cox works with advertising agencies that have been hired by local companies.
That’s what Fletcher Jones does. The auto dealer, the largest Mercedes seller in the country, likes advertising with Cox because it reaches “the people Fletcher Jones is trying to reach,” a spokesman said.
Cox has about 60 networks it can insert local commercials on. The company declined to disclose revenue from its local commercials.
In the second quarter, industrywide cable advertising,including national and local spots,was $347 million, up 5% from a year earlier, according to trade publication Mediaweek.
Cable operators pay fees to networks such as CNN, ESPN, HGTV, E! and the Golf Channel that allow them to insert local spots into commercial breaks.
For some shows, Cox and others can get just about all the commercial time available. For others, it’s half the space or less.
Cox officials declined to comment on how their local advertising is holding up in the economic downturn, which has taken a toll on advertisers.
Two key ad segments,real estate and auto dealerships,have been among the hardest hit.
“We used to do a lot of real estate as well, which we expect to come back,” Davidson said.
Cox’s pitch is targeted advertising: “We eliminate market waste by identifying an advertiser’s audience and targeting that audience,” Davidson said.
The company breaks South County into three zones for advertisers: Irvine, which also includes Tustin and Newport Beach; Saddleback, which covers Lake Forest and Mission Viejo; and coastal, which has Laguna Beach, Dana Point and San Clemente.
Advertisers measure the results of their Cox spots by changes in their businesses as the commercials air.
“People are getting smarter with their commercial dollars,” Davidson said.
The company is looking to sell advertisers on other forms of marketing.
Cox’s latest offering is a 30-second commercial that includes a text messaging pitch that allows viewers to get a coupon sent to their cell phones.
“It’s estimated by 2011, retailers worldwide will be sending out 3 billion mobile coupons,” said Shelly Cotellesse, senior manager of marketing and sales development.
Cox, which has plans to start offering cell phone service in South County, is looking to offer a directory of coupons that could be sent to cell phones.
Advertisers also can place ads on Cox’s Web site.
“We bundle and layer these on top of an advertiser’s core 30-second commercial schedule to create a compelling marketing campaign,” Cotellesse said.
In the fall, Cox started making popular shows such as “Heroes” available on its on-demand channel, with a catch. Viewers can’t skip the commercials. The company is testing the offering locally with plans to expand it to other markets next year.
