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Cable Aims to Revolutionize TV Advertising

Light Reading
LR Cable Opinion
Light Reading

For cable, advanced advertising looms as The Next Big Thing. Casting an envious eye on the growth of Internet advertising, cable operators have marshaled a broad industry effort to use interactive, on-demand, and addressable technologies to transform, if not revolutionize, television advertising and generate more revenue from their local ad inventory and new service platforms.

While many concepts have been kicked around for years, the new foray is based on a variety of emerging technologies and the recently launched cable effort Canoe Ventures, a "technology company and service bureau" to support advanced advertising that is backed by six U.S. multiple system operators (MSOs): Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), Cablevision Systems Corp. (NYSE: CVC), Charter Communications Inc. , Cox Communications Inc. , and Bright House Networks .

Technology players, from longtime interactive TV players to Google (Nasdaq: GOOG) and Microsoft Corp. (Nasdaq: MSFT), are rushing to provide TV advertising solutions. The latest edition of Light Reading's Cable Industry Insider, "Telcos Beware: Cable Takes Aim at Targeted Advertising," takes a close look at the prospects for Canoe and the new advertising technologies.

Canoe serves as a focal point as the industry rallies around the enhanced TV (ETV) and tru2way specifications for interactive TV applications, dynamic ad insertion for on-demand programming, and techniques for targeting ads geographically as a prelude to addressable advertising on individual set-top boxes.

In October 2008, Canoe is introducing a product to support targeted-zone advertising, with availability expected in the first quarter of 2009. The product will enable programmers to offer advertising positions reaching certain viewer demographics across the MSOs' local ad inventory. Earlier in 2008, the MSO partners, which collectively reach about 53 million subscribers, launched Elections '08 On Demand, offering on-demand clips and political ads.

As the new report discusses, the venture's greatest challenge, meeting the needs of six MSOs, is apparent to nearly everyone involved. Whether the initiative glides smoothly or eventually capsizes, Canoe is cutting a wide wake for technology suppliers to push forward with advertising solutions.

Seeking to gain new life from the advertising movement are longtime interactive TV (ITV) and ad-solutions providers, including ActiveVideo (formerly ICTV), Backchannelmedia, BIAP Systems Inc. , BlackArrow Inc. , Ensequence Inc. , Invidi Technologies Corp. , NDS Ltd. , OpenTV Corp. (Nasdaq: OPTV), Visible World , and Zodiac Interactive . Google's TV Ads is enabling advertisers to bid for auctioned inventory, while Microsoft's Advertiser & Publisher Solutions (APS) Group is offering dynamic video-on-demand (VOD) insertion and ad-support tools from its recent acquisition of Navic Networks .

Many other technology companies that support cable infrastructure, ad insertion, interactivity, and on-demand capabilities could also benefit, while those involved in Internet advertising could seek to migrate solutions to TV.

As the report explains, suppliers entering the market must understand the full supply chain of cable advertising and find a particular niche that a solution can fulfill. The successful solutions will be those that are open and flexible, yet unique enough that neither Canoe, an MSO, nor an ad agency can cobble together a similar and less-expensive solution. Solutions must easily integrate with cable and advertising infrastructures and be able to deliver accurate, measurable results which clearly demonstrate a return on investment and reinforce their value. Ultimately, advertisers, agencies, and consumers will determine cable's advanced advertising fate.

— Craig Leddy, Contributing Analyst, Light Reading's Cable Industry Insider

The report, Telcos Beware: Cable Takes Aim at Targeted Advertising, is available as part of an annual subscription (6 bimonthly issues) to Light Reading's Cable Industry Insider, priced at $1,295. Individual reports are available for $900. For more information, or to subscribe, please visit: www.lightreading.com/cable.

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