CTAM in NY: Cable Has Unique Opportunity in Addressable Ads10/07/2011 4:41 PM Eastern
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New York - The cable industry is uniquely positioned to take advantage of its hyper-local presence to further advance the addressable advertising business, a panel of industry experts said at Friday's CTAM in NY closing general session.
Cable operators have always had a strong local presence and have used that to their advantage with local advertising, said Time Warner Cable executive vice president and chief strategy officer Peter Stern. With the advent of addressable advertising, the industry has the opportunity to take that advantage a step further.
Cable has the ability to take that platform and target it locally at a disproportionately high CPM that they advertisers can't get when they sell nationally, Stern said, adding that Time Warner Cable is divided into about 300 zones across the country which give advertisers and even greater opportunity to target specific audiences.
Bank of America Merrill Lynch first vice president and managing director Jessica Reif Cohen agreed.
"The potential of addressable advertising could really change the dynamic," Reif Cohen said.
As far as future innovation targets go, Stern said that developing a more robust user interface is a priority, but he cautioned that operators should not let the technology get in the way of the overall customer experience.
"We do have to innovate on the user interface but I don't want to lose our direction. User interface, navigation is not entertainment," Stern said. "Our goal in navigation is we want to get out of the way and let customers enjoy what they are paying for, which is watching quality TV."
Stern added that while cable still offers the best entertainment value - he estimated the average cable bill works out to about 30 cents an hour for top quality entertainment - the industry needs to keep innovating in the way it presents and packages its services to consumers.
"We have to be sensitive to what is going on in the world around us," Stern said, adding that as consumers continue to reel from high unemployment and other economic pressures, the industry needs to offer lower cost alternatives. Time Warner is already doing that with TV Essentials, a package of about 40 channels for around $40 per month in the New York area ($30 per month in northern Ohio), but Stern added the rest of the industry needs to take up the mantle.
Disney Media Networks co-chairman and president of ESPN ABC Sports George Bodenheimer said that cable's value proposition is not touted enough.
"I think the cable operators add a tremendous amount of value to programmers and consumers in this country," Bodenheimer said. "I wish more people would tout the actual value we collectively deliver."
Stern also offered his take on the Google's August announcement that it would purchase Motorola Mobility. While that deal was made mainly to secure a handset maker for its Android smart phones, Motorola also is a major supplier of set-top boxes to cable. Stern said that he would hope that Google would use that purchase to enhance innovation in the set-top manufacturing segment. He added that Google could provide the same protections to cable operators that it provides handset manufacturers of its Android smart phones, allowing them to innovate without the threat of patent trills. And Stern added that Google could even provide its Android platform across all set-top providers.
"But if they try to take this as an opportunity to capture the advertising business, they will destroy the value of that acquisition, but they will also destroy some pretty important relationships with us and the programming community," Stern said.