Cable's Interactive Advertising Challenge

Interactive TV (ITV) advertising has reached a critical juncture as major cable MSOs deploy tens of millions of digital set-tops capable of delivering ITV ads, according to the latest Cable Industry Insider from Heavy Reading. But the report cautions that the industry will have to hustle to lure advertisers to the new platform.

Analyst Craig Leddy details the results of first interactive ad campaigns from Canoe Ventures LLC in the report, “Your Ad Here: Cable’s ITV Ad Platforms Open for Business.” Among the findings: brand recall increased when Canoe added interactive overlays to ads, and unaided recall of brands increased by 167 percent when Canoe added interactive polls to ads. (See Canoe Boots Up Interactive Ad Campaign .)

“The challenge for the industry will be to replicate these results on a large scale and make TV advertising a business that deserves advertisers’ time, attention, and share of wallet,” Leddy writes in the report. Leddy also details efforts to create interactive ads that can run on any cable system through standardization efforts such as Enhanced TV Binary Interchange Format (EBIF) and tru2way .

But cable operators still face several challenges in creating an interoperable ITV advertising platform for media buyers, Leddy said in an interview. He noted that MSOs are using several different versions of EBIF user agents, which can make it more difficult for advertisers to create one interactive spot that can run on any cable system.

“I think 2011 is going to be a big year for trying to make that platform ubiquitous for advertisers, and testing the delivery from start to finish,” Leddy said, pointing to Canoe’s efforts to conduct “pipe cleaning” of cable infrastructure. The number of interactive ad campaigns run by Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), and other Canoe partners should increase by the end of 2011, and really pick up steam in 2012, he says. (See Cable Breaks Out the ITV Drano .)

Leddy's report explains how Internet advertising is driving cable’s interactive advertising efforts, and tracks ITV advertising at Cablevision Systems Corp. (NYSE: CVC), Cox Communications Inc. , and other MSOs. It details ITV advertising activity at cable rivals such as Verizon Communications Inc. (NYSE: VZ), DirecTV Group Inc. (NYSE: DTV), and Dish Network LLC (Nasdaq: DISH), and takes a look at t-commerce efforts, including HSN Inc. 's Shop By Remote. (See HSN’s 'T-Commerce' App Gains Traction and Canoe CTO: 'T-Commerce' Coming in 2011.)

Leddy also examines the key technology firms driving the ITV advertising sector, including ActiveVideo , Ensequence Inc. , FourthWall Media Inc. , Microsoft Corp. (Nasdaq: MSFT)'s Microsoft Advertising, NDS, Visible World , and Zodiac Interactive .

— Steve Donohue, Special to Light Reading Cable

The report, Your Ad Here: Cable’s ITV Ad Platforms Open for Business, is available as part of an annual subscription (6 bimonthly issues) to Heavy Reading Cable Industry Insider, priced at $1,595. Individual reports are available for $900. For more information, or to subscribe, please visit: www.heavyreading.com/cable.

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