• by David Goetzl  @dgoetzl, June 4, 2010

Last year may have been a tough one, but Time Warner Cable's ad sales group turned in significant growth in the first three months of 2010. A 19% year-over-year bump prompted CEO Glenn Britt to say on a recent earnings call: "Our advertising business has rebounded even faster than we expected."

Still, its first-quarter performance of $173 million is well below the $197 million during the 2008 boom. Overall, ad dollars make up only about 4% of TWC's business, although it was a $702 million business in 2009. As of March 31, TWC served 12.8 million homes with TV services.

Along with other cable operators, TWC is banking on new advanced advertising methods to drive growth. Those can allow a viewer to "telescope" to longer-form content to receive additional information about a product -- or provide a chance to vote with a remote control on a topic, where an advertiser can buy a sponsorship.

TWC launched Promotions on Demand in 2009, a service where a viewer can visit a video-on-demand channel to gather more product information and seek special offers through the mail.

Looking to bolster its advanced offerings, TWC is equipping its set-top boxes with EBIF (Enhanced TV Binary Interchange Format) technology. EBIF will also allow it to sync with Canoe Ventures' initiatives, notably delivering interactive ads on national cable networks into TWC homes.

TWC is one of the six cable operators that own Canoe. All of them are equipping boxes with EBIF, looking to give Canoe a platform to serve national "request-for-information (RFI)" spots, where people can opt-in to receive coupons or other information.

In addition to interactive applications, geo- and demo-targeting capabilities give TWC executives optimism that sales will continue to grow along with the economy. And competitive political races in regions that TWC serves should help.

TWC, for example, has a presence in California, where a governor's race should yield considerable spending. With both political dollars, and in other categories, TWC hopes to grab share from local broadcasters this year.

Jason Forbes, senior vice president with Time Warner Cable Media Sales, spoke with Media Daily News about some of the challenges and opportunities the company faces. An edited transcript follows:

MDN: You had a strong first quarter with 19% growth. CEO Glenn Britt said a recovery was quicker than anticipated. What do you attribute that to?

Forbes: It was important to look at our 40-plus markets and understand how we can do a better job of harmonizing our go-to-market strategy. In marketing, we had a number of silo teams. With the "MTV Video Music Awards," the teams in each of the markets would often build the same material.

We've now put in place a much more cohesive strategy; for example, the L.A. market is going to cover the following tentpole (programming event) ... the New York market is going to cover EBIF and interactive from a product marketing perspective ...

By clarifying who's doing what in more of a federated model, we've been able to get a lot more done with the same amount of resources. We have one owner for our major tentpoles who builds all the collateral -- and all the other markets get the benefit. That's actually allowing us to get a lot more done with the same headcount in the marketing group.

MDN: The economy no doubt helped, but were there other market dynamics that propelled the growth?

Forbes: In December, we ran a set of surveys across both existing and potential advertisers. Some of the responses that came back were absolutely fascinating. One of the most germane: overall, 30% of advertisers were looking to spend more with cable television in 2010, and we broke that down across what sort of categories should we be focusing on, and in which markets.

In retail, which is one of our important categories, 37% of retail advertisers plan to spend more with cable TV. And 26% of auto advertisers -- which is our biggest category -- plan to spend more with cable TV. Understanding our customers' needs led us to focus our firepower in the markets and in the categories where we thought the growth would be greatest.

MDN: TWC's five principal markets are New York State (including New York City), the Carolinas, Ohio, Southern California (including Los Angeles) and Texas. Has the economy recovered at different rates in different markets and how has that affected your business?

Forbes: There are so many variables informing the growth or non-growth story. What is fair to say is we've probably seen a faster and more robust turnaround in some of our larger markets.

Even for some of our smaller markets, which are maybe taking a little longer to recover, we've found the share-shift story is compelling there. We've been able to use the story of our ability to geo- and demo-target to take some share in those markets, despite the economic story not being where we want it to be.

MDN: Are you launching anything new in advanced advertising this year?

Forbes: Up to 7 million set-top boxes will be EBIF-enabled by the end of the year. In parallel with what's going on with Comcast and Canoe ... from an educational perspective, it would be difficult to drive the market by ourselves, but we're all getting the benefit because everyone is selling the same story from a voting and polling, telescoping and RFI perspective.

We're going to (focus) on Promotions on Demand, which we've now launched in 20 markets. When you see a 30-second spot for BMW or a Carl's Jr., you can actually go to the VOD environment to kind of engage deeper with an ad or creative, and order a coupon or discount to your home.

We're educating advertisers on how we can better track ROI versus other elements of the media mix. Now we're offering an advertiser not only viewership, but how many people went to the VOD environment; how many people requested the coupon; and how many people redeemed the coupon ... we've got a set of case studies in terms of percentage conversion by category. You're going to see that as an increasingly important part of our product portfolio.

MDN: What does EBIF allow you to do that previous interactive advertising did not?

Forbes: It provides more scalability in terms of our set-top boxes. It actually works across all our set-top boxes, so even lower-end ones can enjoy the benefits of EBIF functionality. It means you have far fewer latency and compatibility issues, which means we can get to a large number pretty quickly.

From a creative and programming perspective, we have more latitude. It's an open standard. Verizon was actually one of the earlier players in the EBIF space from a developer perspective in terms of overlays and creative. In terms of making that open to as many people (as possible), EBIF offers a far richer set of possibilities.

MDN: Canoe is planning to have opportunities for national cable networks in the market by August. Will the 1 million EBIF-equipped homes TWC has in New York be available for the national networks to target?

Forbes: Very much so. We've been working closely with our Canoe and NCC (National Cable Communications) partners, as they look to deploy across ourselves, across Comcast, etc. Obviously, New York is going to be a pretty important market for them.

MDN: With the markets it serves, TWC should be in position to garner considerable political dollars in 2010. There's former eBay chief Meg Whitman spending heavily in California and a competitive governor's race in Ohio, among others. Will you do better than 2008, even though that was a presidential year?

Forbes: As we looked to take share from broadcast in particular, we could have done a better job telling that story in 2008. One of the things we can now do for the campaigns on both the Democrat and Republican sides -- whether at the governor, Senate or House levels -- is being able to overlay our zoning capabilities on top of district maps.

We can actually go into California, for example, and for Jerry Brown versus Meg Whitman or Steve Poizner (all running for governor) show how zones skew towards Republican, independent or Democrat. That's something from a geo-targeted perspective we've been able to do for several years. But it's a story that we're telling on a far more compelling and cohesive basis this year.