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Cable Execs Defend Advanced Ad Efforts

Light Reading
LR Cable News Analysis
Light Reading
2/23/2010
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NEW YORK -- It will be another five years before national advertisers can target individual households through cable advertising platforms, an executive from one of the country’s biggest media buyers complained Monday.

While Canoe Ventures LLC is making progress on deploying an application that will allow cable subscribers to request more information from an advertiser with their remote controls, GroupM director of emerging media Michael Bologna says that isn’t enough.

“Canoe can now offer RFI [request for information], sure. But the ability to target specific households at the back of a national spot, I believe that’s five years away,” Bologna said at an advanced advertising event hosted by Multichannel News and Broadcasting & Cable.

Cable executives defended their targeted and interactive advertising efforts on earlier panels, insisting that the industry is making progress.

“It’s so important that we crawl, walk, and then run,” Time Warner Cable Inc. (NYSE: TWC) New York regional media sales vice president Steve Jacobs said, noting that Enhanced TV Binary Interchange Format (EBIF), which enables targeted and interactive ads, will soon be available in more than 7 million of the MSO’s homes.

“We all agreed to use EBIF -- that’s the first step,” said Jacobs, referring to TWC and the other Canoe Ventures LLC partners, Comcast Corp. (Nasdaq: CMCSA, CMCSK), Charter Communications Inc. , Cox Communications Inc. , and Cablevision Systems Corp. (NYSE: CVC). (See Comcast Clicking With EBIF and Comcast COO: Nat'l Platform Key to Interactive Ads).

Cablevision isn’t waiting for its partners in Canoe to upgrade their delivery platforms before it moves forward with its own advanced advertising deals.

“For us, it’s been very real for three to four years now, with real products, real advertisers, real agreements,” MSO executive vice president of advanced platform sales Barry Frey said. “We fully support Canoe. It’s important that happens as we roll out our own set of products that will become part of the Canoe set in the future.” (See Cablevision Eyes T-Commerce Launch in 2010).

SeaChange International Inc. (Nasdaq: SEAC) chief strategy officer Yvette Kanouff repeatedly came to the defense of Canoe, noting that there are 13 million EBIF-ready set-tops already deployed by the major MSOs.

“I think it [Canoe] gets a bad rap. What Canoe has done is take all of the operators and try to create a level of consistency. It’s an enabling vehicle,” Kanouff said.

While the major MSOs have consolidated some of their advanced advertising efforts through Canoe, GroupM’s Bologna said he would also like to see consolidation on the sales side. “If the sales organizations of all of the different layers could consolidate a little bit… That’s one of the bigger problems with clients pulling the trigger on this -- they hear so much from so many people,” he said, pointing to various efforts from cable MSOs, technology vendors, and data companies to hype the potential of advanced advertising.

Leap Media Group principal Courtenay Harry echoed that sentiment on another panel. “There’s so much coming at them [marketers],” said Harry, a former MediaVest executive. “Everyone has an individual property to sell. We do have to roll those up in order to scale -- absolutely.”

When pressed on how much she expected her advertising clients to spend on advanced advertising, Harry said, “I think it will be a single digit to start.”

While DirecTV Group Inc. (NYSE: DTV) and Dish Network LLC (Nasdaq: DISH) don’t have the ability to target addressable ads at individual homes, DirecTV vice president of advertising sales Rich Forrester noted that his company and Dish count about 29 million homes capable of receiving interactive advertising.

Forrester acknowledged that one of the challenges for the DBS (direct broadcast satellite) firms in interactive advertising is their return path, which relies primarily on set-tops connected to telephone lines. “Our largest weakness is the backchannel is a little antiquated,” he said.

While advanced advertising has been slow out of the gate, executives said they expect to see significant progress in the next five years, with Visible World CEO Seth Haberman predicting that there will be 60 million to 70 million households that are “addressable and interactive” within that timeframe.

— Steve Donohue, Special to Light Reading Cable

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