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Comcast COO: Nat'l Platform Key to Interactive Ads

Light Reading
LR Cable News Analysis
Light Reading
10/26/2009

DENVER -- CTAM Summit -- Taking a subtle jab at Cablevision Systems Corp. (NYSE: CVC)’s recent rollout of interactive TV ads, Comcast Corp. (Nasdaq: CMCSA, CMCSK) COO Steve Burke said the key to convincing advertisers to embrace interactive and addressable ads is building a national platform.

“I don’t think it [Cablevision's rollout] can be a watershed event unless it’s national, and I don’t think people like Procter & Gamble or Johnson & Johnson want to do things at 10 percent or 20 percent or even 30 or 40 percent of the country. They really want a national platform,” Burke told cable marketers here, hyping the industry’s efforts to launch interactive ads through the cross-MSO Canoe Ventures LLC partnership.

Canoe will be using Enhanced TV Binary Interchange Format (EBIF), a CableLabs -specific platform to launch its national interactive ad campaign. However, Cablevision, a Canoe member, has opted to go with a proprietary, non-EBIF system for "Optimum Select," its initial interactive advertising play, though it claims to be committed to the Canoe effort. (See Cable's Canoe Heads for Scalable Waters and Cablevision Gets Interactive.)

'Cord-cutting' and ad targeting
Burke and Starcom MediaVest Group CEO Laura Desmond also debated topics ranging from whether or not cable subscribers should be given the ability to skip commercials in video-on-demand (VoD) programs, to how much advertising should be placed in TV programs that are distributed online. Both executives agreed that technology is disrupting long-established business models.

With younger viewers watching more video on the Web, including pirated shows, Burke said that the cable industry’s TV Everywhere efforts and Comcast's own On Demand Online service are aimed at keeping subscribers from dropping their cable video subscriptions. (See Comcast Nears 'TV Everywhere' Launch.)

“An entire generation is growing up with that [online video] preference," Burke said. "If we don’t figure out some way to change that behavior so it respects the copyrights on the side of the content providers and the cable subscription or satellite subscription or telco video subscription on the side of the distributors, I think we’re going to wake up two or three years from now with a lot of ingrained habits going the wrong way, and you will see video cord cutting."

Most of the 25 cable networks supplying shows to Comcast’s On Demand Online tech trial on its Fancast portal are running the same commercial loads used in their TV broadcasts, Burke said. But he and Desmond said a lighter commercial load, which would generate higher CPMs (cost per thousand impressions), would be more effective with viewers.

Asked about the potential for addressable advertising, Desmond said Starcom and its clients would like to grab a bigger share of the direct marketing sector by targeting ads to individual households and even individual viewers within a household. But she cautioned that it will take a number of years for cable operators to offer the capability.

“I’d like to believe we’re two years away, but I don’t think we are. That’s just the reality,” she added.

Asked by Harvard Business School professor and panel moderator Tom Eisenmann about using data collected from set-tops to target ads to viewers, Burke said there is a potential for behavioral targeting if privacy concerns are addressed.

“It is extraordinarily complicated and extraordinarily emotional when it comes to behavioral data. We need to make sure as we move forward we’re very, very careful about that. We have been. Particularly right now, it really is a third rail,” Burke noted.

Citing the example of how Virgin Mobile USA Inc. (NYSE: VM) once gave subscribers free minutes in exchange for watching ads on their phones, Desmond said viewers may be receptive to behavioral targeting if they are offered incentives. “Consumers do understand there could be a value exchange here,” she said.

Also worth noting from Sunday evening's Cable & Telecommunications Association for Marketing (CTAM) Summit panel:

  • Burke said Comcast’s Boston division is currently rolling out interactive programming based on EBIF. "My bet is you’re going to see Comcast-wide applications really start to come out later this year and into 2010."

  • Burke said he supports the idea of forcing subscribers to watch ads in highly rated free (ad-supported) VoD programs, but that he believes fast-forward functionality shouldn’t be disabled in older TV programs offered on-demand.

  • Desmond said that smart marketers understand that interactive and targeted ads are crucial for the future of the advertising business, and she noted that a lack of standards is preventing some marketers from diving into the sector. "From an agency standpoint, you have to invest resources and technology. My view is if you don’t do it, we’ll be dinosaurs."

    — Steve Donohue, Special to Cable Digital News


    Interested in learning more on this topic? Then come to TelcoTV 2009, the telecom industry’s premier event for the exploration of a comprehensive entertainment convergence strategy, to be staged in Orlando, Fla., November 10-12. For more information, or to register, click here.


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    Peter DeMilio
    Peter DeMilio
    12/5/2012 | 3:53:28 PM
    re: Comcast COO: Nat'l Platform Key to Interactive Ads
    The problem with posting an online comment is itGÇÖs just that a personal comment.

    That being said:

    I would have to agree with Mr. BurkeGÇÖs comment that a national advertising platform needs to be built and that major advertiserGÇÖs want the greatest amount of market penetration per dollar spent GÇô however as with all new technology it would be prudent to ramp up slowly so a national platform is achievable and sustainable. The comment I donGÇÖt understand is the comment Mr. Burke made saying that he (Comcast) supports a national platform and they support the consortium backing platform creator Canoe but has decided to pursue a proprietary platform not supported by the rest of the group. I canGÇÖt help but wonder how this helps the development of a national interactive / addressable advertising platform. As far as the major advertisers it would be to their advantage to be able to have a single source for ad placement, whether it is cable, online, satellite, or telco delivered - however there would have to be a very robust fully vetted application / platform in place for this to make any sense. Canoe is a good start and they have some creative folks at the helm but will take significant cooperation from all parties involved to make this a reality.

    Mr. Burke and Ms. Desmond sound like forward thinking individuals, not knowing them personally. Their debate over how much advertising should or could be place either online or in an on-demand venue will rage on for sometime to come. How much is to much and how little is too little? And what are the direct or indirect impacts to the bottom line margins for both the advertisers and the distribution outlets? Attracting new subscribers and retaining young technology savvy viewers have for the most part been a challenge faced by all subscriber based applications. Advanced media technologies are interrupting long-established business models and perhaps this is a good thing. Maybe itGÇÖs time to embrace new strategies that finally bridge the long awaited convergence of the internet and television, bringing forth the ability to retaining the current subscribers while attracting the new. It seems very clear that an entire generation is growing up online and itGÇÖs time to adapt and capitalize on this new paradigm or whither by the wayside. Content is KING and distribution QUEEN, long live the media Kingdom.
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