Cable TV 2009

Addressable Ads Are Here; Who's Ready?

Canoe Ventures Rolls Out National, Scalable, Interactive TV Spots

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NEW YORK ( -- Advertisers and agencies have asked for more-relevant TV advertising platforms for years, whether it's addressing two different versions of the same ad to different household-income levels or adding interactive capabilities. Now that such technologies are finally available on a national basis, this could be the first upfront where buyers and networks negotiate a different kind of TV ad model.

interactive TV
Sources: SNL Kagan, National Cable & Telecommunications Association, Canoe Ventures
Canoe Ventures, a joint effort across the country's six largest cable operators helmed by former Aegis Media CEO David Verklin, seeks to change the way cable networks sell ads by making national spots locally targetable through addressability and interactivity. In February, Cablevision became the first cable operator to open its entire roster of 2.4 million digital homes to enable scalable interactive channels for all of its local video-on-demand affiliates, as well as interactive "power 30-seconds" for Rainbow Media networks AMC, We TV, IFC and Sundance.

Time Warner Cable, the country's second-largest cable operator, will roll out interactivity across its 8.6 million households in October, and its top five markets will be lit up later in the second quarter. The company experimented with couponing and other interactive requests for information in recent months in major markets such as Los Angeles, where tire manufacturer Big O Tires experienced recent spikes in traffic after offering free-tire coupons on its custom interactive Time Warner Cable channel. Joan Gillman, Time Warner Cable's exec VP-media sales, said set-top-box data delivered the most compelling metrics. "We could see who clicks, how many coupons and how they're redeeming them," she said. "The response rates have significantly improved."

Barry Frey, Cablevison's senior VP-advanced platform sales, said the recession has also accelerated advertiser interest in more web-like platforms for TV ads. "In this economic climate, people are seeking more accountability, more metrics and more engagement," he said. "The real key here is people have been using VOD and iTV, and advertisers have to now adjust their media spend to the habits consumers are taking on."

But how ready are marketers? Steve Lanzano, chief operating officer of Havas' MPG, said because such ad platforms have only been experimented with on a single-market, single-distributor basis, most clients have yet to make them a dedicated part of their national media plans.

"They just don't have the knowledge base to understand how it works," he said. "As it becomes more scalable, it is a real proposition, but it also brings up questions on how to measure success. I still think it's up in the air, and different for every client and category."

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Cable TV 2009

Successful test
In September 2008, the agency ran a test for American International Group and Time Warner Cable across 19 cable networks in its Oceanic, Hawaii, market. Unfortunately for AIG, the campaign coincided with the insurance company's controversial government bailout. The surprise silver lining: Click-throughs increased throughout the campaign's four weeks, even after AIG's troubles became public. Mitch Oscar, MPG's exec VP-televisual applications, said of the 12,000 people who made up the 7% of the market's digital-cable subscribers who clicked on the AIG banner ad, 61% were existing AIG policyholders. Because of how the campaign was measured in relation to its zone, network placement and audience makeup, Mr. Oscar said, "this is the first test or experience where we've proved addressability works on TV."

Of course, 7,000 people in Hawaii is hardly scale, and that's often the biggest concern when it comes to national buys. "The fundamental question we get from CMOs is: Is it worth it?" said Joshua Herman, digital-marketing-innovation leader for Acxiom. "Can you demonstrate it was worth the effort to do the data integration and identify the worth of the customers vs.non-customers?"

Jeff Minsky, who oversees emerging media for Omnicom Media Group Digital, said interactive advertising has proved to be a strong direct-marketing tool, "but it is exactly that. It's the same ranges you would get with an 800 number or a microsite, which might underwhelm some clients or be valuable to others," he said. "The technology being implemented on a national basis across Time Warner and others is phenomenal, but the consumer behavior and motivation for the consumer to interact is going to be a challenge for people used to interacting on a PC screen or their phone."

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