Taking Another Shot at Addressable Advertising

Cable Companies Join to Develop Set of Universal Metrics for VOD

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NEW YORK (AdAge.com) -- Remember addressable advertising? It was going to reinvent how TV commercials are bought, and finally make them truly targeted, truly accountable and truly interactive.

But while there have been some innovative digital-cable experiments conducted on a local basis over the last several years, addressable ads have been difficult to deploy nationally thus far -- and one major problem has been lack of scale.

Project Canoe
Now, a consortium of the major cable companies is hoping to accelerate that process. Colloquially known as "Project Canoe," the as-yet-unnamed group of cable multiple-system operators such as Comcast, Time Warner Cable and Cox Communications, among others, has been meeting over the last several months to create a set of universal metrics. The goal is to help advertisers buy video on demand on a more scaleable level and, ultimately, have a wider footprint to deploy their addressable ads to specific demographics.

But this Canoe has a long way to paddle before addressable ad formats become a widespread reality. Its growth is contingent on VOD, which in its current state is less accountable or demographically robust as other emerging media. Cable operators have too little infrastructure in place to provide clients with robust set-top box data on campaigns.

Instead, vendors in the space have to commission Nielsen and other measurement companies to do custom studies that could take months to show any real audience metrics from a campaign. As a result, broadband video has started to take a larger share of ad money for pre-roll and mid-roll ads on network sites such as ABC.com and Hulu.com, which can provide specific audience metrics to advertisers at the drop of a hat.

The ad community has taken two different approaches in its pleas for organized metrics and scaleable deployment of these new VOD formats. On one side of the table is Starcom, which supports a project such as Canoe as a one-stop shop for advertisers looking to do a large-scale VOD buy with universal metrics. "Without the consolidation of standards, it doesn't work," said Tracey Scheppach, senior VP-video innovations director at Starcom. "Because there are only pockets of innovation at the MSOs, there are only so many places to take it. Two million homes in New York or 200,000 in Palm Beach, Fla., is not enough."

Skepticism
That's not how Mitch Oscar, exec VP-director of Carat Digital, sees it. "My feeling has always been, give me a market or two so I can learn as you grow. If you grow, I'll grow," he said. While he too champions the need for universal metrics and inventory from the MSOs, he doesn't want it to be scaled at the expense of targetability, either. "When I do a test on the technology now, I can spend $50,000 or $150,000. I get whatever learnings and perhaps I'll do more. But when you're deployed across 30 million digital-cable households, will they really expect me to spend $5 million?"

Vicki Lins, senior VP-marketing communications for Comcast Spotlight and de facto spokeswoman for Project Canoe, said the cable consortium is expected to have a name and a CEO "some time soon." She added, "We're definitely collaborating in response to advertiser needs, and it is a cross-MSO collaboration. The core focus is to create a seamless, simple national network that will leverage interactivity, targeting and measurability."

Selecting a captain for Canoe will be tricky. Frank Foster, co-founder of Erin Media and senior consultant for EVAD Consulting's TV audience-measurement practice, said the group leader should be someone outside of the cable industry. "Last time I checked, cable is known for delivering video, they aren't known for delivering advertising," he said. "They need someone who has the data, has the keys. They need to know which key to use and how many times to turn it."

Urgent need
Nevertheless, the advertiser interest in VOD and addressability has become urgent to the point of staggering for the technology providers in the space. Michael Kubi, exec VP of Invidi Technologies, an "inferential technology" company that can infer demographic and geographic data about a viewer, said he has had to stop taking meetings with advertisers due to the outpouring of interest. "I can't get through the meeting without them saying, 'OK, we want it. When do we start?' And we can't deploy it fast enough."

Perhaps the closest the cable industry has come to scaling unique dynamic ad insertion and addressability for national advertisers is through Visible World, a technology company that entered a partnership with the MTV networks last year. Last November, the company ran a holiday-themed campaign for Kmart on Nick at Nite and TV Land that swapped multiple creative messages for different audience, allowing Kmart to target its customers down to the ZIP code level if they so chose.

Though the campaign is nearly 4 months old, Visible World President Tara Walpert said the company is still working with Kmart to determine the ultimate impact on sales. "The common view is it was a big success," she said. Ultimately, for the space to grow, "big advertisers are going to need a way to manage their video messaging across all these platforms and media types. They only want to set up the rule once."
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