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Thursday, March 13, 2008

Cable Firms Join Forces to Attract Focused Ads

Slashdot It! In an effort to slow Google’s siphoning of advertising dollars away from television, the nation’s six largest cable companies are making plans for a jointly owned company that would allow national advertisers to buy customized ads and interactive ads across the companies’ systems. For the last six months, executives from Comcast, Time Warner Cable, Cablevision, Cox Communications, Charter Communications and Bright House Networks have been meeting monthly, alternating between New York and Philadelphia. Quarterbacking the initiative — code-named Project Canoe to emphasize that the companies must all work together — has been Stephen Burke, president of Comcast, and Landel C. Hobbs, the chief operating officer of Time Warner Cable. Getting the right advertisement to the right person, based on that individual’s own tastes and lifestyle, has been the promise of cable television for years and the reality of the Internet. The allure of online advertising is that it can be directed to individuals and that advertisers can quickly measure its effectiveness. After all, a bachelor living in a Manhattan high-rise surely does not need a pickup truck or a box of diapers. And a retiree living in Florida probably does not drink much Red Bull or venture online to find a date. Cable companies and even Google — which has a deal with the satellite TV company EchoStar to sell television ads — see customized features in television as a potential gold mine. But such newfangled advertising models are something the cable industry has promised for years, and until they see them on a large scale, advertisers and investors will remain cautious. That is why the industry has not made a more public splash about the initiative and why executives involved with the project asked not to be identified. Collectively, the cable companies will initially put about $150 million behind the effort in order to build a national service that can sell targeted advertising across all six cable systems. Cable companies have the ability to compile better data on users than Internet companies can glean, which could make focused ads on television more effective, according to Craig Moffett, a senior analyst at Sanford C. Bernstein & Company. It also makes the data that Project Canoe will collect from set-top boxes a valuable asset. “Addressable advertising on television is in many ways the holy grail, because it can offer ever more targeting ability than Google,” Mr. Moffett said (“addressable” is the industry term for targeted ads). While much ink has been spilled over the rise of Internet video and the decline of television, about 90 percent of all video consumed in the United States last year was done the old-fashioned way — watching shows as they came on TV — according to Starcom USA, whose clients include General Motors and Procter & Gamble. About 7 percent was via digital video recorder, 2 percent was online, and 1 percent was through video-on-demand services. Via NYT Get Daily Updates via Email Protect your computer with Windows Onecare Get paid $7.50 for reviewing my post Ad Space

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