Buyers Pull for Advanced Ads Despite Canoe Pullback

Other sources offer interactivity, addressability

By Jon Lafayette -- Broadcasting & Cable, 2/22/2012 8:13:09 PM

RELATED: Canoe to Shutter Interactive TV Ad Business, Lay Off 120

While Canoe Ventures' decision to leave the interactive advertising business is a setback, media buyers say advanced advertising will flow without it.

Advanced advertising has been moving forward in fits and starts and there was hope that Canoe, put together by the major cable operators, could create a national standard bearer for interactivity, addressability and data gathering. But on Wednesday, Canoe said it would be focusing on helping operators and cable networks monetize on-demand programming, leaving interactive TV to individual operators.

"The premise of Canoe was absolutely right on the premise of collaborations. So what happened was not everyone was in the boat together," says Tracey Scheppach, executive VP and innovations director at media agency VivaKi and its SMGx unit.

 In addition to some friction among its partners, "they forgot about the advertisers and their agencies," Scheppach added. "This is going to make my job a lot harder because a collaboration is what we need."

"I think it's going to be discouraging at first," says Mike Bologna, director of emerging communications at media agency GroupM. He said that Canoe's vision was to offer a one-stop shop that would nationalize advance TV.

"The national TV buyer [would be] much more comfortable buying interactive and addressable functionality from  their broadcast or cable network counterparts than they are from a cable system, a satellite system or some type of ad-hoc third party," Bologna says. "And that's not going to happen."

But Bologna notes that "advanced advertising will continue to progress and will move on with our without Canoe. Canoe definitely gave it their best shot. I take my hat off to [former CEO's] David [Verklin] and Cathy [Timko] and everybody involved, but the game isn't going to stop because Canoe folds."

Scheppach says her agency and its clients believe that addressability was more important than the interactivity that Canoe had been focused on. Advertising is concerned, being able to measure it and address it is so much more important than being able to interact with it. There's just so much more value created there," she says.

In terms of addressability, satellite operators and telcos, not brought in as part of Canoe, are further along on deploying addressability at the individual household level, Scheppach says. "They have more than a paddle. They have a motor boat, she says. And while they have fewer homes than the cable industry, "I'll take it at this point."

"The good news from my own perspective is right now in 2012 addressability is here. Dish Network, DirecTV, Cablevision, Verizon, they all have an addressable product in market today and I think advertisers are going to focus on that for this current year. I know mine are," Bologna says. "With that, once we get the right message to the right households, the interactive overlays and the interactive components will become that much more valuable."

Bologna adds that even though Canoe has withdrawn, there are still 60 million cable households with interactive capabilities. "That's going to force us to rethink how we utilize them on behalf of our clients," he says.

The on-demand work that Canoe will be focusing on will also be valuable to advertisers, Bologna says. VOD advertising has been underutilized because of long lead times, a lack of flexibility and poor measurement of commercial viewing. Canoe will be working on dynamic insertion, which allows networks to make changes in what advertising airs when-and who sees it.

"The fact that Canoe will enable these national networks to make this VOD inventory attractive to advertises is a good thing," he said. "I know my advertisers are just chomping at the bit waiting for dynamic ad insertion to be perfected."

Scheppach adds that some of the work Canoe is doing on dynamic ad insertion will power addressability in the future. "Really, addressability is dynamic ad insertion," she says. "I want addressability on VOD, I want it on tablets, I want it online. I want to be able to address the audience everywhere."

Both agency executives say that with Canoe pulling back from some forms of advanced advertising, more of the work shifts to the buyers and their clients.

When Canoe started, Scheppach says she thought the effort to remake the TV business needed more than a paddle. "Everybody's got to be in the boat together. The secret is collaboration. It's a sad day because that's exactly what to me failed," she says.  And with Canoe foundering, TV will need to look elsewhere move ahead. "That's why it's a setback. This industry needs a serious kick in the ass."