New York -- Cable operators know that television advertising is broken, and they plan to fix it in short order.
That was the promise delivered to the audience at the Broadcasting & Cable/Multichannel News OnScreen Media Summit in a spirited address by Canoe Ventures CEO David Verklin, the man in charge of the joint venture formed by the six largest cable operators to roll out targeted ads and interactivity on a national basis. Despite the buzz in the TV industry about new platforms like the PC and mobile phones, Canoe intends to reinvent the TV set as a platform, said Verklin, and will roll out its first applications in the first quarter of 2009.
“Don’t count out the TV set, don’t count out the programming networks, don’t count out the cable television companies, and don’t count out the traditional television business,” Verklin declared. “Believe me, we get it, and we are not sitting idly by. We are not Neanderthals, and we are not Luddites.”
And according to Verklin, the current recession is simply speeding up Canoe’s efforts to bring new advertising technology to the 60 million cable TV households its partners serve, not slowing them down.
“What my board has told me is I need to move faster,” said Verklin, who fielded questions from Multichannel News technology editor Todd Spangler and the audience after his speech. “The media business is changing right before our very eyes.”
To that end, Canoe plans to roll out a preliminary form of targeted ads called “zone addressability” within the next 100 days, said Verklin. The application will allow advertisers to target advertising across cable TV’s 2,700 geographic zones based on demographic information from Experian. For example, said Verklin, a financial advertiser like Citibank could buy a 30-second spot but deliver three different commercials selling three different financial products, based on the demographic makeup of particular zones.
“Citibank will be able to break out national ads and split them across three demographic slices, and I think we’ll bring that to 60 million households in the next 100 days,” said Verklin.
True addressability, such as targeting down to the household and set-top level, will take longer, and probably is three years away, said Verklin. He said the strongest interest in addressability has come from direct-response advertisers, who typically experience less than a 1% response on typical TV commercials.
As Canoe meets with various segments of the television advertising industry, ad agencies have proven to be very interested in addressability, said Verklin, while programming networks are more interested in interactivity and are a little more skeptical about addressability.
Supporting interactive applications, such as voting and polling using the A,B,C buttons found on digital cable remotes, is easier to do than addressability. So are request-for-information (RFI) applications where a viewer clicks to receive an electronic or physical coupon for a product. So Canoe will roll out interactive applications to 15 to 20 million households, said Verklin, and probably RFI as well, sometime next year.
“Interactivity will come first, whether the agencies like it or not,” said Verklin. “Household or set-top box addressability is by far the biggest challenge.”
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