• by David Goetzl , January 20, 2010

Despite a failure to launch its initial product and a delay in its second, Canoe Ventures has plans to nearly double the number of its employees this year. A spokeswoman for the business run by the largest cable operators said it ended 2009 with about 70 employees.

Canoe lost one top executive in December when former Time Warner Cable (TWC) executive John Collins left to pursue other interests, the spokeswoman said.

Collins, who had a top role in advanced advertising at TWC, joined the senior leadership team in late 2008 and left Canoe as senior vice president of sales service. He was involved in laying the groundwork for Canoe while at TWC.

Canoe pulled the plug on an addressable advertising product in mid-2009 after some technical hurdles and disinterest among cable networks. At the time, chief David Verklin said Canoe would switch gears -- and plans called for the debut of an iTV lead-generation application by the end of 2009.

But that has been postponed until at least this spring, when Canoe plans to take the product to market. Once the technology is considered deployable, the company needs to find national cable networks that are willing to license the system and sell it to advertisers.

Advertisers would have the option of implementing a request-for-information (RFI) program, where a viewer could click on a prompt and request that a special offer or sample product be sent to them.

Mitch Oscar, an executive at agency MPG, said a staff doubling at Canoe would be welcome, but he is skeptical how that might jumpstart the company's operations.

"If you have 70-plus people now -- so we understand -- we're not sure what Canoe has accomplished to date other than postponements of deployments," he said. "So if they are doubling in size, hopefully that's because they're going to be very successful, which would be great for the industry. But what will the new people do?"

Canoe's promise is the chance for advertisers to run interactive spots from coast to coast, reaching homes served by the six largest cable operators at once. Those operators -- Comcast, TWC, Cox, Charter, Cablevision, and Bright House -- are co-owners.

A test of the RFI offering was conducted in the fall, but Canoe will provide no details -- perhaps because not all six cable operators participated. A Cox representative said the company has not participated in any trials, but will be working with Canoe in the future.

In order for the RFI product to be operational, there must be a critical mass of cable boxes equipped with EBIF (Enhanced Binary Interchange Format) technology -- which serves the iTV ads.

The six cable operators are tinkering with their set-top-boxes to give them EBIF functionality -- but doing so at different speeds. Comcast CEO Brian Roberts said earlier this month, the operator has 13 million boxes teed up. TWC says it has 1 million. Neither Cox or Cablevision would release details. Charter and Bright House did not immediately provide information.

Canoe's principal challenge gaining uptake of the RFI offering looks to be less on the technological front and more on the sales side. Persuading cable networks to license the technology with the belief that advertisers will welcome it may meet resistance.

Both MPG's Oscar and Brian Wieser, an industry analyst at Interpublic's Magna, suggested that large advertisers are not organized internally to do much more than experiment with RFI campaigns. Launching one is a labyrinthine process that requires cooperation of brand management executives; the media department; the acquisitions team; and a fulfillment team, which must oversee the mailing out of the coupons or mouthwash samples that people request.

Employees under pressure to deliver on short-term performance goals can hinder that needed teamwork and be a blockade.

"If someone is responsible for a marketing budget, they're probably not responsible for the quality of the product," Wieser said. "They're probably not responsible for the retail distribution. (Large advertisers) are structurally unable to systemically sustain spending in these areas because of their organizational design."

Wieser suggested that iTV RFI campaigns might be more suited to smaller marketers. They could have fewer executive layers and a greater emphasis on more direct-response-type advertising.

"For them, it could be the single most important medium and they can generate real identifiable results," he said.

Oscar said, nonetheless, blue-chip marketers that avoid dipping a toe in the water could suffer down the road -- and agencies like MPG need to nudge them along.

"You have to find the right people within your own media department," he said. "They have to understand it. Once they do, they have to figure out with the client how to achieve the client's sales goals. But just as important is getting ready for when these applications have scale, which is the promise of Canoe."