AMC Pitches Upfront Buys Utilizing Canoe's Platform

AMC, known for the "Mad Men" series about 1960s Madison Avenue, is pitching advertisers on upfront buys that involve a cutting-edge platform. The network is offering deals that include interactive ads using technology developed by Canoe Ventures.

Based on a document AMC has been floating, it appears that Canoe Ventures' platform for national request for information (RFI) ads will reach approximately 7 million homes by the fourth quarter. Canoe CEO David Verklin declined to provide a current figure last week, but said the ads are running in households served only by Comcast and Time Warner Cable.

If an advertiser runs a spot in AMC's 95 million homes, an RFI prompt could appear in those 7 million come fall. That can allow a viewer to order more information about a product or a free sample in the mail. Canoe licenses the RFI technology to cable networks, which then sell the opportunity to advertisers.

AMC's proposed upfront deals, however, include a package that can reach more than the 7 million "Canoe-enabled" homes. Through a partnership with its parent Cablevision, the figure climbs to 10 million.

For that reach, AMC hopes to charge advertisers that buy its upfront inventory an additional $100,000 a month ($1.2 million for 12 months). What's noteworthy: AMC is looking to charge a flat fee, rather than a cost-per-click or cost-per-lead model.

Under the proposed deal terms, advertisers will run both national and local spots. The national ads would be on AMC coast-to-coast. Then, there would be a separate run of ads reaching some 3 million homes served by Cablevision in just the New York area.

The Cablevision ads would run during local breaks on multiple networks. Cablevision launched an RFI offering in the New York area in fall 2009.

Particulars of the $100,000-per-month proposal have AMC offering upfront advertisers the opportunity to place RFI overlays on 60 national ads a month on its air -- and 352 in the Cablevision footprint.

Tracey Scheppach, a senior vice president and innovation director at VivaKi, said "adding value to television is an important initiative" and referred to AMC as "an innovator" for melding RFI opportunities into its upfront deal-making.

But Mitch Oscar, an executive vice president at MPG, said agency organization could be a hindrance. Deals involving local and national inventory can bring some coordination and budgetary issues among personnel. "The national person can't evaluate local, and the local person can't evaluate national," Oscar said.

Comment from AMC and Cablevision could not be obtained late Friday.

Even as AMC may get an advertiser to pay the $100,000 a month on top of a regular upfront buy, a portion would no doubt go to Cablevision.

"We still have not figured out what the (Canoe-enabled) interactivity costs," MPG's Oscar said, "because the majority of this $100,000 a month will go for Cablevision local inventory costs, and not for the Canoe technology."

The presentation AMC is floating to advertisers provides some insight into how networks may struggle to determine what to charge advertisers for the nascent RFI offering. AMC set the flat $100,000 fee regardless of the viewer response rate, but the network gives advertisers some estimates about what they may get for their money.

AMC estimates that in a month, the combination of spots for the "AMC/Canoe" and "Cablevision" inventory will yield 3.97 million impressions.

Under one scenario, where a viewer would be offered a brochure via the RFI clicks, the network estimates there will be about 20,000 "interactions" and about 8,000 leads generated for the marketer. That would result in a cost-per-interaction of $5.04, and a $12.61 cost per lead.

Under an example of a more attractive offer -- a free sample -- there would be about 99,000 "interactions" and about 40,000 "leads" -- bringing a cost-per-interaction of $1.01, and a $2.52 cost-per-lead.

AMC is not paying the costs of sending out the brochures or samples. But it is requiring that the fulfillment house the advertiser uses be "certified" by Canoe.

As AMC notes in its presentation, advertisers are warming to interactive advertising, since its capabilities are similar to direct- and digital-marketing. Marketers can pick up the name and address of potential customers, while gaining data on viewer response rates.

The cabler also supplies some projections for how many homes the Canoe technology will be available in next year: perhaps more than 17 million.

VivaKi's Scheppach, a Canoe proponent, said the company's forward motion is notable; "it's not easy for cable operators to work together." But she added that "getting organized on how to scale technology" to improve television's value is crucial.