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CES: Ad, cable industries out of synch on interactive ads

Fri, 01/09/2009 - 7:35am
Brian Santo

LAS VEGAS – Interactive advertising may take much longer to become the norm than many people anticipate – even those already taking into account that innovations always take longer to implement than anticipated. 

Listening to the panelists at several advertising and cable sessions at CES here makes one thing clear: There’s little clear between the advertising and cable markets. Some advertising agency representatives were surprisingly ignorant about what is technologically feasible on the cable platform.

Part of that ignorance was revealed in the presentation of conflicting evidence. For example, Joshua Spanier, director of communications strategy at Goodby, Silverstein & Partners, explained that clients aren’t ready to take advantage of the opportunities that cable offers because they’re unwilling to do the necessary experimentation to see what works best on different end devices.

In a separate session, however, Cablevision Senior Vice President Barry Frey testified that he’s working with upwards of 30 clients on innovative and successful ad campaigns that take advantage of Cablevision’s advanced network. Somebody is clearly experimenting.

One of Cablevision’s examples was the Barbie Channel, essentially an advertisement. Frey said the Barbie Channel and other similar programming keeps visitors for 7 to 10 minutes, on average, which compares with the typical ad that runs all of 30 or 60 seconds.

“We’ve taken the best interactivity of the Web,” Frey said, “and melded it with the power of a big-screen TV.”

Disagreements across different sessions is one thing, but sometimes panelists were talking across each other within sessions.

Don McNeill, president of Digital Kitchen, said the problem isn’t a lack of willingness to experiment, it’s a lack of motivation to experiment because the metrics aren’t there to evaluate the success of interactive advertising. Clients aren’t going to attempt interactive advertising until it’s demonstrable that there will be a payoff.

Moments later, McNeill was contradicted by Brandon Berger, a vice president at MDC Partners, who noted that with IP delivery, it’s easy to extract metrics.

But other ad agencies simply don’t believe that, or if they do, they don’t care. In a later session, Alessandra Lariu, senior vice president at McCann Erickson, simply dismissed “legacy media” and repeatedly insisted that cable cannot match the opportunity represented by the Internet, for a variety of reasons, including better metrics.

Technologists associated with the cable industry argue that everything an advertiser (or ad agency) could want out of cable is available, or quickly would be, if advertisers would commit to using it, thereby assuring a return on the investment required to justify putting all of the necessary infrastructure in place, argued Texas Instruments’ Executive Director of Broadband Strategy Peter Percosan.

Aside from what’s feasible and what isn’t, the sheer number of pipes is confusing some agencies. There’s no question of picking one pipe over any other – they’ll advertise anywhere there are enough people to advertise to. An impediment for advertisers is the lack of expertise to handle all of the different channels.

“The hard part is that the market is so complicated – there are so many ways to get the message out,” Spanier said. “We have to find companies to help us do things we can’t do. We were a one-stop shop. We can’t do that anymore. We have to find someone else to help, and we wouldn’t have done that three years ago.”

And addressable advertising? Agency representatives shied away for privacy concerns. “Times two if there are kids in the house,” said Danielle Barbieri, manager of business development and advertising manager of the Cisco Media Solutions Group.

David Katz, vice president of mobile advertising and publishing at Yahoo, reminded that there are diminishing returns when you start dicing audiences down below the zone level.

Davina Kent, director of strategic alliances at Comcast Spotlight, noted that Comcast can already do zones across its entire footprint.

Cablevision and Comcast both have trial markets testing addressability, Kent said. “We see about 38 percent higher viewer retention with spots. The ad technology is there,” she said. “The creative is not.”

Dalen Harrison, CEO of Ensequence, threw a caveat into that. “It is non-trivial to get applications up and running across multiple platforms,” he said. There are at least seven different versions of Enhanced Binary Interchange Format (EBIF) out there, and they don’t work with each other, he noted. “Cox has different extensions on EBIF than Time Warner Cable’s, which are different from Comcast’s, which are totally different from Verizon’s,” he said.

In between you have guys like Ed Forman of ActiveVideo and Brendan Traw, CTO of Intel’s Digital Home Group, explaining that it’s easy for cable operators to provide Web-based content on the TV – including dynamically inserted ads. The issue paralyzing the industry is who gets the money when the ad comes in through the data pipe – the content originator or the pipe owner?

But the bottom line is the bottom line – there are, as yet, no reliable business models for interactive advertising. And even if you can find a workable business model, with competition and evolving technology, how long will it remain viable?

The upshot is that ad agencies don’t seem to be fully aware of what can or cannot be accomplished on the cable platform. Cable has some educating to do.

More Broadband Direct:

• CES: Ad, cable industries out of synch on interactive ads

• Genachowski to head FCC

• Update: Obama team urges delay in digital TV transition

• Boucher named chairman of House telecom subcommittee

• Cablevision subsidiary plans $500M debt offering

• FCC's Martin creates white spaces fellowship, training initiative

• P&F: U.S. Broadband subs will decline 12% in 2009

• Broadband Briefs for 01/09/09

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