NEWS: Cable Firms Join Forces to Attract Focused Ads

By TIM ARANGO
Published: March 10, 2008

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.

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Here is what is at stake. Combined, the nation’s cable operators generate about $5 billion in revenue from selling local advertising in markets where they own the infrastructure to people’s homes, a small slice of the $70 billion television advertising pot. They largely compete with local newspapers and radio stations. But Project Canoe will allow the industry to sell ads on a nationwide basis through a joint platform.

For each hour of programming on a cable network, the cable operator owns about two minutes that it can sell to advertisers. The network, say ESPN or TNT, owns about 15 minutes that it can sell.

Because the only way to deliver custom television advertising is through a cable set-top box, Project Canoe is also a way for the cable companies to get a piece of the advertising revenue. This is done by allowing cable networks like ESPN or a broadcast network like CBS to sell ads on Project Canoe’s platform and direct those ads using the vast amount of data collected from set-top boxes.

The executives involved in Project Canoe think that, by working together, they can increase the cable industry’s take from $5 billion a year to $15 billion a year, according to an executive briefed on research compiled by Project Canoe.

Another component of Project Canoe is interactive advertising, which allows television viewers to use remote controls to, say, request a brochure or call up more information about a product.

Ed: 1. Aggregate local minutes into national minutes. 2. Use settop box to target ads and increase eCPM. 3. Allow broadcast networks to use targeting to increase eCPM.