With 26.4% of U.S. homes with TVs expected to have digital video recorders by the end of the year, according to Interpublic Group's Magna, advertisers are in a lather. About 60% of consumers who own DVRs use them to skip ads. So marketers are turning to what might be their last great hope: technology that lets them send ads about specific products to specific consumers or helps them prompt a couch potato to press a remote button to gain more information or request a coupon or catalog. Ads that entice or are relevant -- so the theory goes -- would be much harder to ignore.
Some of this is already possible, but only in a limited fashion. Advertisers want to be able to do this on a national basis. Currently, a marketer would have to set up separate deals with Comcast, TiVo, EchoStar, Time Warner Cable, Cox or anyone else who is willing to do a test of interactive TV.
That's where Mr. Verklin comes in. Formerly CEO of Aegis Media Americas, he has been CEO of Canoe Ventures, a consortium created by the nation's top cable providers, for little more than a month. The group's mission? Find ways to take interesting ad formats the cable industry has developed -- ads that allow you to click a button and "telescope" to a new screen, or a digital cable channel devoted solely to a single advertiser or ad category -- and make them easier to use, implement and measure. He wants to move quickly. After all, he said, "there are a lot of different players that are all going to change the model of TV advertising and make it more interactive and more targeted and addressable."
Starting around the first quarter of 2009, Canoe intends to offer advertisers technology Mr. Verklin calls "creative versioning." TV networks will be able to sell ads marketers can "tweak" so that, for example, the copy in an ad running in markets with sizable Hispanic or Latino populations would be in Spanish, while appearing in English otherwise. Similarly, an ad from a bank could tout no-fee checking in areas where the median income is under $50,000, he explained, but promote home-equity loans where the median income is between $50,000 and $150,000. A company called Visible World has been doing exactly this in several parts of the country, but Canoe aims to make it easier for marketers to use ads across the nation.
Marketers are accustomed to cable providers "constantly being in test and nothing ever coming out of test," Mr. Verklin said. "We hope to bring this product out in roughly 120 days, and our program network partners should be able to deliver this in what is approaching two-thirds of America."
In recent weeks, Canoe has unveiled "Elections '08," a video-on-demand channel that offers political programming and infomercials. Canoe also expects to launch "My Life on Demand," a health-and-wellness VOD channel that Mr. Verklin said would appeal to pharmaceutical marketers. Both projects reach 32 million homes, across 10 different cable providers.
To media buyers, Canoe's work is crucial if TV is to rebound from audiences migrating to the web and other emerging media venues. "It cannot fail," said Tracey Scheppach, senior VP-video innovations director at Publicis Groupe's Starcom USA. Cable providers have oversight of the largest part of video consumption -- about two-thirds of the nation -- while broadband video and VOD have yet to attract a significant mass audience.
Others are looking forward to a day when Canoe Ventures helps make viewership data from set-top boxes more widely available. This development would give marketers more ability to direct ads to specific homes and demographic groups. By placing commercials for particular products "in the homes that have a higher propensity to want to buy them, think of the power that TV could ultimately have to drive business and persuade," said Kris Magel, exec VP-national broadcast director at Interpublic Group's Initiative.
Six parents to please
Mr. Verklin is careful not to overplay his hand. At present, "the challenge is to harmonize" the technology of Canoe's six cable-provider parents -- Bright House Networks, Cablevision Systems Corp., Charter Communications, Comcast Corp., Cox Communications and Time Warner Cable -- so that advertisers can run promotions across all of them, and perhaps others.
Canoe will float its ideas as others work on similar efforts. Satellite-provider EchoStar has allowed sponsors to create interactive advertising, and DVR provider TiVo also has launched several ad formats that solicit viewer action or response. Canoe partner Comcast -- along with Publicis Groupe's Starcom MediaVest Group -- is involved in an experiment set to get under way in Baltimore, in which marketers will deliver specific ads to households based on general characteristics that the advertisers select.
"I think America is ready for smart interactivity, and I certainly think that if you're a cat owner, you don't want to see dog-food ads," Mr. Verklin said.