Cable industry paddles along toward unified advertising platform

“Pssst. I’ve got the yo-yo.”

If you answered: “I’ve got the string,” you’ve just achieved security clearance to read on about the cable industry’s Project Canoe.

Project Canoe is an industry-wide initiative that seeks to build a common advertising platform that will allow the cable industry, for the first time, to broadcast ads nationally or across entire marketing regions, and track when the ads were played out. That’s expected to help cable nab some of the advertising dollars that are currently going to broadcast networks or the Internet.

Project CanoeProject Canoe, which supposedly got its name from everyone in the cable industry paddling in unison toward the single advertising platform, will have something that other providers won’t; namely, the ability to offer interactive ads. While there is no official word from the cable industry, CableLabs or the SCTE, other advanced advertising services slated for Canoe are expected to include VOD telescoping, targeted ads and addressable ads.

“The upside to the advertising industry is very significant,” said In-Stat analyst Gerry Kaufhold. “Here’s a way that cable can differentiate itself from all of its competitors. The telcos don’t have a national footprint yet, and it would be really difficult for satellite to do this nationwide to different segments of the United States.

“If I were an ad buyer, I’d be all over this in a heartbeat because you can do regional ads for less money and a better hit rate.”

Kaufhold said an ad could be created for a specific region, such as the northeast, with the same ads running across the board for all of the cable operators in that area. The ads would come from a central point, which would also handle billing, ad avails and other backoffice functions. MSOs will need common interfaces to hand the materials off, and can use their backbone infrastructures to send the information from one end of the country to the other.

The first unofficial inkling of Canoe was at last year’s NCTA show in Las Vegas. During a session on the OpenCable Platform, Time Warner Cable media sales president Joan Gillman spoke about a common middleware for advertisers.

“The opportunity for cable is a simple, streamlined solution that allows tests to scale seamlessly,” Gillman said.

Gillman also said interactive polling with sponsors keeps subscribers engaged in live viewing mode, and that their ad recall was higher with applications such as polling versus ads that were just embedded in shows. Advertising agencies want “a big idea with an integrated campaign,” Gillman said.

For competitive reasons, the cable industry and CableLabs haven’t openly discussed Project Canoe, although it has been alluded to during analyst conference calls, and there were references to it by Comcast CTO Tony Werner and Comcast Spotlight’s Paul Woidke, vice president, technology, at the recent CableNext conference.

When asked about those comments, Comcast would respond only with the following statement: “Paul Woidke and Tony Werner, in the course of individual presentations during the recent CableNext conference acknowledged that several MSOs, including Comcast, are working together in an intercompany coalition, which has been termed ‘project canoe.’ Without providing specifics/detailed references, both pointed to MSO work to create a seamless, simple national network that will allow our advertising partners to take advantage of our interactivity, targeting, and measurability on a national level. Both made reference to the fact that advertising revenues for MSOs and the cable infrastructure provides opportunities not available through broadcasters or satellite to provide these advanced advertising capabilities.”

So there you have it. Project Canoe does exist, albeit in a locked vault. Vendors involved in the project have been muzzled by non-disclosure agreements with CableLabs. CableLabs reportedly issued an RFI on Canoe in August, and about 60 companies responded. Of that 60, CableLabs has whittled the list down to roughly 10 vendors that it wants to work with in the near term for getting Canoe in the water, with another group in standby mode.

“I cannot comment on the specifics of any cable industry initiatives around advanced advertising and must defer to the MSOs,” wrote Joe Matarese, C-Cor’s SVP of advanced global technology, in an e-mail. “I think what we can say is that in so far as the MSOs have described publicly the sort of advanced advertising applications they generally wish to support – dynamic VOD advertising, addressable linear, interactive ads with embedded triggers, telescoping – C-Cor has piloted them all and we uniquely understand how to deploy them with the least amount of equipment, the least operational expense and the most appropriate set of partners in each case.

“Metaphorically, we’re passionate about cable advertising to the extent that we jumped in the lake already and we’re confident we can swim across. If a canoe comes along and we can get across the lake faster by joining others in the paddling, all the better.”

According to one source, the RFI was a wide-ranging document that goes from sales force tools to selling to deployment to back channel integration and reporting.

“What Canoe is attempting to do is to allow operators to have their own implementations of the various parts of the business, but then put in some interfaces that allow these systems to work with each other so they can do national buys, national invoicing, recovery and reporting,” said Aslam Khader, Ensequence’s chief product officer. “There is a common interface that is going to be defined so the operators can continue to operate the way they’re used to – it would be too hard to throw out everything and start over – but then also implement this interface that enables this common sales side system to query and get from the sales side the data on what ads are available, and then to make reservations against that.”

Khader said the interfaces could be some form of APIs (application programming interfaces), or batch level interfaces.

“The batch system would be an online system that is API-based. With those APIs implemented, one could query using Web services, and I really think this is the approach that Canoe is taking,” Khader said. “With the Web services model, where you put Web service interfaces into the various inventory systems, you would have a consistent sales side interface.”

With specific details of Canoe in short supply, the SCTE’s Digital Video Subcommittee 629 is worth a look since it sets the stage for Canoe’s objectives. According to the SCTE, within the DVS Subcommittee, the specific Working Group charged with building DVS 629 is Working Group 5 (WG5), Digital Program Insertion (DPI). More than 60 companies are participating in the DVS Subcommittee, and about 30 of those companies are involved in developing DVS 629.

DVS 629 is comprised of seven parts or individual standards. The first four parts have already been issued for balloting. According to the SCTE, Part One is an Advertising System Overview, which provides an introduction and the overall description of the suite of DVS 629 standards. Part Two defines the Core Data Elements, including data types and messaging services within the digital advertising system. Part Three, Ad Management Service, explains the requirements of the interface that defines ad-insertion opportunities and the handling of subsequent placement decisions. The Content Information Service described in Part Four defines the content query and notification functions.

Parts five through seven are still works in progress. Part Five is the Placement Opportunity Information Service, which defines the interface between software routines of the ad-placement query and notification functions. The Subscriber Information Service interface specified in Part Six implements the subscriber information (some level of demographical data) query functions.

Part Seven, Message Transport Compliance, provides the glue connecting the system together by defining the physical and messaging protocols that transport data between services that are specified in Part Two through Part Six.

With so many elements to put in place for Canoe to start paddling, expect DPI to handle the heavy lifting this year for cable advertising. As far as nationalizing the other advertising elements, VOD telescoping could be first out of the gate, followed by interactive and targeted ads.

Khader said that while the SCTE will handle the gritty details of some of Canoe’s specifications, he thought CableLabs would take the lead in shepherding the overall initiative in a similar manner to what it has done with EBIF and the OpenCable Platform. According to one source, Time Warner Cable is taking the lead on developing the business side of Canoe.

According to a story in The Wall Street Journal, representatives of the cable industry went to Washington D.C. last year to meet with ad buyers for both the Democratic and Republican parties for this year’s elections. While cable is pushing hard to launch Canoe, Khader said that in all likelihood “sneaker net” manual processes will be used to get a national sales side going for this year’s interactive election advertisements.

Aside from DPI, early implementations of Canoe will likely start with interactive applications based on EBIF, and down the road those same applications will be offered through the OpenCable Platform.

“This is going to be a phased approach that will take time,” Khader said. “It will be implemented system by system, operator by operator, but the interface specification should be out early next (2008) year and then the cable operators can start working with their vendors on those interfaces.

“In the next nine to 12 months, we’ll see all of the systems across Comcast, Cox, Cablevision and Charter be able to talk to each other so you can have national fulfillment, national billing, national buy and national verification, but this is going to be a step-by-step process.”