Addressable Advertising: Still in the Pipe-Cleaning Stage

Q&A: David Verklin on Progress at Cable's Canoe Project

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DENVER ( -- A year ago, David Verklin was cable TV's white knight, ready to swoop in and save the industry from its woes of making interactive and addressable ads available at a national scale to marketers. Essentially, Canoe's intention was to make TV ads more relevant to the average viewer based on age, sex or even lifestyle behavior.

David Verklin
David Verklin
"I certainly think that if you're a cat owner, you don't want to see dog-food ads," the former Aegis Media chief told Ad Age, and anyone who would listen at various cable events in the past year. But after Canoe's first addressable ad product was delayed in June, citing technical difficulties, many industry observers wondered if the ship had already sailed for Canoe, less than 18 months after its initial multimillion-dollar investment from the top six cable operators.

Since Canoe sprung its first leak, Mr. Verklin has been talking less conceptually and more tactically about his plans for Canoe, describing his role these days less as a ship captain and more as a plumber. "We're still in the pipe-cleaning phase," he told Ad Age this week at the Cable & Telecommunications Association for Marketing Summit in Denver. "This is not about lighting everything up market by market. This is epic. What we are doing is really worthy of the effort. The set-top-box was not designed for advanced advertising." He added that it will take some time to get to the point where information can easily pass between cable TV receivers.

Canoe's delays were primarily due to the lack of deployment of EBIF (Enhanced TV Binary Interchange Format), the technology necessary to make interactive and addressable ads possible on digital set-top boxes. Instead, Canoe's founding cable partners have continued to use their own advanced advertising offerings as competitive advantages against each other. Cablevision in particular has taken a leading role in interactive ads, recently rolling out an I-TV platform in 3 million of its New York subscriber homes using a proprietary technology instead of EBIF.

Only Comcast has been the most vocal about its plans to put EBIF in more homes in early 2010, starting with about 2 million homes in Chicago and San Francisco, a far cry from the 35 million-plus the industry was touting just a year ago. As a result, the cable networks that will ultimately sell Canoe's high-tech ads have been left stranded, with ESPN's planned trio of interactive apps set to launch in fourth-quarter 2009 recently pushed back until 2010.

MediaWorks recently caught up with Mr. Verklin at the CTAM Summit in Denver, where he spoke about Canoe's new priorities for 2010, the cable industry's nebulous reputation for partnership and why scale for Canoe products is "inevitable."

Ad Age: It seems like we've been talking about the promise of interactive TV for years now, long since you were on the media-agency side. When will that promise become a reality?

David Verklin: Well one thing we've been working on as an industry is to really come up with a ubiquitous brand name for interactive TV, so the consumer really understands the value we're providing to the TV experience. And once that's ready, people will really start to see that promise we've been talking about since I joined.

The biggest thing we struggle with about I-TV is people have a tendency to talk about the first product. To me, it's a suite of products. For us, our first product will be an RFI [request-for-information] app, similar to the one Cablevision has that helped local businesses generate 30,000 requests for product samples. The product will be in 25 million households, and will show that even mail-delivered products have real legs.

Ad Age: When you came to Canoe last year, you had the nearly impossible task of getting the top six multiple-service operators to change their legacy systems so they could partner on a common platform. How would you describe your progress?

Mr. Verklin: I kind of feel like Jeff Bezos, who built an amazing business with Amazon on top of an existing technology platform, except I'm being asked to build a platform and then a business a top of that. So my first order of business is building an inter-operational platform that works across the cable industry, and eventually elsewhere. We fully intend to reach beyond the cable platform at Canoe. In fact, Verizon is the most EBIF-enabled provider in the marketplace today.

Ad Age: There have been a couple products and deadlines that have come and gone since your tenure at Canoe. What are the company's priorities for 2010?

Mr. Verklin: First, to make EBIF deployment ubiquitous in every digital cable box. We've got to get a backchannel into segregating severs, that de-duplicates leads into the existing capital infrastructure.

Second, we need to get the program network families engaged, on board and in the family. What's funny is that when cable networks talk about using new technologies, they want to be the first, an exclusive. But when it comes to I-TV, exclusive is a bad thing. If only one network had I-TV it wouldn't work. The average cable buy is 15 networks, so advertisers should be beginning to optimize and figure out how I-TV campaigns can work on 15 networks.

Third is data. Once the question moves from "When is interactive TV happening" to "is it working?" And we think this new product line will move very rapidly to new discoveries on what's working.

Ad Age:There's been a lot of criticism about cable's ability to partner, most notably through Tru2Way's failure to hit the market. What's your sense of the MSOs delivering on their common goal?

Mr. Verklin: Canoe is a partnership based on mutual self-interest, and it allows the MSOs to do a lot of stuff we've all wanted to do. Each member is distinct and unique, but it's always been about a collaboration with each MSO. If you could understand the enormous plumbing we've done, you'd see there's already been a good deal of partnership going on already.

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