Buyers Pull for Advanced Ads Despite Canoe Pullback

Other sources offer interactivity, addressability

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

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."