It was a rare, if important, piece of advertising-related news to come out of The National Show, where much of the talk focused on new video competition from the telecom industry, government regulations and consumer marketing.
When Time Warner Cable introduced video on demand to Manhattan, it piqued advertising and agency interest in the medium. Cable operators hope for the same result for interactive TV.
Marketers have already indicated strong interest in interactive TV advertising, which cable and satellite distributors are poised to provide. At the recent ANA TV Ad Forum, a majority of marketers indicated they thought interactive TV to be one of the most promising video applications. But interactive TV has been embattled by fits and starts since the mid-1990s.
David Zaslav, president of NBC Universal Cable, recalled at a panel yesterday morning that when NBC was launching MSNBC with Bill Gates, the Microsoft founder was excited about the ability to ad interactivity to TV and drill down with granularity specific to a user's address.
"It didn't happen as fast as he thought it was going to happen," Mr. Zaslav said. "But we see it now. These interactive ads are starting to be sticky and the advertisers are excited about it."
Not focused on advertising
But at the same time that interactive TV appears realistically inevitable, cable distributors came under fire for not doing enough to appeal to the ad industry. In an advertising-focused panel yesterday, MediaCom's CEO, Jon Mandel, called out cable operators for not supporting industry events.
"I was just at the 4A's Management Conference," he said, "and I saw guys from MSN, Yahoo, Google, and one guy from Clear Channel Radio and that was it. Maybe you guys ought to get your ass out to events like that."
On what are arguably cable's biggest video innovations, interactive TV and video on demand, he went on to suggest they reach out to creatives as well as media buyers. "You've got to get out to the clients and creative people and show them what you can do," he said. "If you don't, you're going to have Betty Buyer sitting there buying rating points and she just needs to get 300 points and you'll never unlock your potential. I don't have a single client that's using it because they can't figure out how."
Of course, advertising represents a relatively small part of cable operators' revenues -- but the growth potential is great. At Comcast, for example, advertising accounts for 6% of total revenue but 22% of free cash flow. And the Spotlight division, which sells Comcast's advertising, has promised to grow that side of the business aggressively.
Yet Scott Ferris, senior VP-general manager at Atlas on Demand, a company that is creating an interface for ad agencies to more easily buy advertising in video on demand, lamented the lack of conversation surrounding advertising. He used a stopwatch during the show's opening keynote and timed how long it took anyone on the dais to say the word advertising.
"It took one hour, eight minutes and 16 seconds before I heard the word advertising," he said. "And that was disheartening, because much of the business is built on advertising."
Much of the current VOD advertising involves long-form advertising accessible on dedicated VOD channels. In the interactive space, it's not a cable operator but Dish Network that's the most advanced. Its interactive advertising is sold by Turner Media Group (no relation to Turner Broadcasting) and clients have included Ford Motor Co., Mercedes-Benz, BMW, U.S. Navy and Hewlett Packard.
While Dish's interactive TV footprint is only 11 million homes, it's a way for advertisers to test the capabilities on a national level, said Jodie McAfee, senior VP-corporate development and marketing for Turner Media Group. "A lot of our clients look at it as a Petri dish."