• by David Goetzl  @dgoetzl, September 10, 2008

Executives at Comcast and Time Warner Cable said Tuesday the industry's efforts to stitch together a national platform to potentially allow an advertiser to micro-target neighborhoods or even specific homes is progressing--with further experimentation coming in 2009.

The system, still in its infancy, wants to bring to TV some of the capabilities that have made Internet advertising a growth engine. In addition to the opportunity for fine targeting or addressability, the advertising could involve interactivity. And it will come with in-depth reporting on ratings and other performance data via set-top boxes.

"The fact of the matter is, if you want to target a specific television spot to a specific television set, the only real way to do that is through the cable broadband structure," said Comcast COO Steve Burke at an investor event. "You can't do it through the Internet. You can't do it through the broadcast infrastructure. You can't do it through satellite."

Six cable operators--headlined by Comcast and TWC, which reach 54 million homes collectively--have jointly funded Canoe Ventures, which is overseeing the project. In addition to former Carat head David Verklin, who is its CEO, a chief technology officer is in place, as well as about 10 other staff members.

Among the promises of Canoe is the opportunity for an advertiser to combine reach and targeting with a single campaign. A marketer could place a buy for all 54 million homes, but spots with different, relevant creative would land in various homes. That functionality, however, may be several years away.

Canoe has already dipped its toe in the water with a VOD offering, Elections '08 On Demand, which is running across the six MSOs. The content includes infomercials from candidates and other politically themed videos.

Time Warner Cable COO Landel Hobbs said Canoe had modest goals with "Elections"--proving it could deliver content simultaneously to homes covered by the six operators and collect performance data within a 24-hour period.

Similar early-step initiatives will launch next year, Hobbs said at the same investor event.

Burke and Hobbs were bullish on the revenue potential from Canoe. Burke said revenues in spot cable have slowed recently as one-third of the dollars come from the struggling auto companies, but Canoe could help resuscitate that business.

The reason for this, Burke said, is that automakers have now developed a two-tiered system for advertising: They run national ads to drive demand, accompanied by heavy Internet promotion to reach the potential buyers who go online to conduct research. The interactivity of Canoe-serviced ads could allow for some of that Internet functionality, Burke said.

Burke said the spot cable business at large garners about $5 billion annually--a figure that Canoe might help double over time.