Commentary

Canoe Potentially Taking Shape As TV Ad-Serving Network

by Michael Kokernak , August 12, 2009

The world has moved forward since the creation of the ratings systems. Today all television advertisers have sophisticated enterprise-reporting (ERP) applications that optimize their product pipelines and distribution networks. Yet as an industry we so far have failed to synch our TV ratings data with the enterprise data of the advertiser. Direct response advertisers have been linking sales data to commercials for decades, but the large brand advertisers still need a more robust application.

Canoe is taking shape to be our industry's first effort to help solve this data issue. However, at the beginning of its rollout, we should be prepared for a very bumpy ride.

There is a great deal of trepidation in the advertising sector on how to adapt the buying process to the age of time-shifted digital television. Many feel it will be impossible for current systems to adapt. But the addition of new systems can be less stressful by first taking the interactive TV data and then linking the data into existing media buying system's advertiser reports, (like a Donovan Data Systems or WideOrbit). The building of an interactive TV company is a large systems-integration project that will involve a lot of cooperation and financial support. Other companies (think Priceline.com) have successfully done it -- and television is certainly overdue for this level of integration.

Canoe Opens Market for Competition

Canoe should probably be viewed as something like an Internet ad-serving company. At first Canoe's primary verticals may be the cable networks owned by the members of Canoe (like Rainbow Holdings or Comcast Networks) and also the local insertions onto the consortium's cable systems. The placement of interactive advertising could then be sold through these verticals and then TV response data from the verticals could potentially be sent in a feed to standard media buying applications housed at the advertising agencies.

As the TV ad-serving industry matures, these verticals could also give way to horizontal ad placement across show genre and time of day. A buyer could then choose to purchase "local broadcast news" horizontal placements through one ad-serving company, and in conjunction, purchase a vertical like "sports nets" through Canoe. Interactive enhancements could theoretically be billed separately through TV ad-serving companies, while traditional "non-interactive" commercial placements could be billed as they always have been.

Don't Sweat the Small Stuff

The goal through the TV ad-serving companies is to provide custom data that will give advertisers the metrics they need for their ERP systems. In future, some standardization for ratings data will still be needed for the mass media and upfront schedules. Fine-tuning the measurement of media can come after enough investment flows into interactive TV technologies that we see scale on the horizon.

The advertising industry should not be hung up at this juncture with how to measure the day-to-day progress of Canoe -- but rather embrace its efforts as agents of change. We should focus on how we can support the build-out of Canoe, as this will open the floodgates for additional television ad-serving companies and keep the TV market competitive.

3 comments about "Canoe Potentially Taking Shape As TV Ad-Serving Network ".

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June Yasol from June A. Yasol Alternatives Co., August 12, 2009 at 1:45 p.m.
I don't really get this- is TV joining the internet marketing world?
How can the internet marketers benefit from this?
http://zyberdon.0lx.net/wpb
Reply

Carl Langrock from Allscope Media, August 12, 2009 at 3:30 p.m.

Mike's first paragraph assumptions notwithstanding, this is a good summary of the state of the state with insight as to how things might move forward. The prior question from June Yasol is telling. I think the real question is how quickly does buying TV time converge with how interactive is bought (and vice versa). Today the media are treated very differently from an applied media research perspective. I'm not sure that they should be. At the end of the day, I want to know how many people I reached in my target audience and how many times I reached them. I also want to know how this exposure helped the bottom line. Interactive television has some promise for giving us better results data (though it will never be perfect). The assumption that the interactive data that we have today approaches perfection is preposterous. As the media and metrics converge, so should the buying habits. This is where the industry has to go. Are we ready for it? Not yet.

Michael Michael kokernak from buyOTTads.com, August 12, 2009 at 7:11 p.m.

As you Carl (from your CoreMedia days) I prescribe to the belief that at the end of the day interactive television is about the direct response industry and 100% response driven. What better way to plan media time than to use actual responses. To June's confusion, as a practice I speak as if television is already 100% direct response as eventually there is no reason for it not to be.