2008 CABLE SHOW: Esser: Cox ‘On the Verge’ Of Advanced Ads

NEW ORLEANS—Cox Communications president Pat Esser said the industry is poised to generate “material” revenue from interactive and addressable advertising formats in the next two years, and said his company is “on the verge” of bringing out such capabilities.

“Shame on us if it’s not material by 2010,” Esser said, speaking on a panel here Tuesday at The Cable Show. “It’s going to be heavy lifting… but we can do it.”

Esser was responding to a question from Sanford Bernstein senior analyst Craig Moffett, who moderated the general session panel, “Getting Engaged: Advertising's Quest to Connect.”

Esser said addressable ads will result in higher ad rates, more engagement and more accountability. Cox has said it plans to begin dynamically inserting ads into video-on-demand content in its MyPrimetime service in Orange County, Calif., and hopes to broaden that to encompass targeted advertising as well.

“Our platform is on the verge of bringing those kinds of services to the market,” Esser said.

Moffett previously had asked Cablevision Systems chief operating officer Tom Rutledge the same question—when advanced advertising will represent significant dollars—to which Rutledge responded that it will take a while.

“There’s a lot of technology to be deployed before this is ubiquitous,” Rutledge said. “Our current model of selling subscriptions… is going to drive our growth for the near future.”

Project Canoe, backed by Comcast, Cox, Cablevision, Charter Communications, Time Warner Cable and Bright House Networks, is supposed to allow the industry to be able to sell interactive and addressable advertising on a mass scale, using standardized technical interfaces and reporting metrics.

Tony Vinciquerra, president and CEO of News Corp.’s Fox Networks Group, said about Canoe, “We’re really anxious to see how that all goes.”

He added, “I’m confident we will come up with the right solutions… We will figure this out.”

Chrysler vice president and chief marketing officer Deborah Wahl Meyer said marketers clearly have an appetite to deliver ads based on demographic data.

“Now believe me, your customers—us the advertisers—are ready and waiting for you to develop addressable advertising,” she told the audience. “We just salivate for that opportunity… We believe you can take narrowcasting to the next level.”

According to Meyer, automotive marketers spent $1.2 billion with cable in 2007. But increasingly auto marketers are turning to the Internet, which provides better means of matching specific features of a car model with different audiences.

In marketing a vehicle like the Dodge Ram 1500, for example, Chrysler is trying to reach six or seven different constituencies with a single TV spot.

“In the traditional 30-second spot, we’re trying to squeeze those messages,” she said.

Auto advertisers “want to deliver one message to the 55-year-old married man watching Battlestar Galactica and a different one to the unmarried 22-year-old woman the next town over,” Meyer said.

Regarding advanced advertising in general, Meyer said, “We’re not going to get it perfect out of the box, but what’s critical are the relationships—that’s what will endure.”

Rutledge noted that Cablevision has run a trial of targeted advertising in part of its New York City systems, which are all-digital at this point.

“We have more spectrum unused than used there,” he said, explaining that the operator has ample bandwidth to send up to 10 different ads associated with a single linear channel.

After the panel, Cablevision vice president of media relations Jim Maiella said the tests took place recently in the Brooklyn and the Bronx and involved the company's own cross-channel spots and not any outside advertisers.

Former CEO of Aegis Media Americas David Verklin was originally scheduled to be on the panel, which was presented in association with the Cabletelevision Advertising Bureau. Verklin is reportedly coming on board to run Project Canoe.

According to CAB president and CEO Sean Cunningham, Verklin was unable to appear because of the death of a close friend.

Moffett kicked off the session by reading a dictionary definition of “canoe”: “A primitive, unstable boat traditionally made from bark or a dug-out or burned-out log, generally used for navigating very calm, very small waters.”

Moffett then deadpanned: “So, welcome to the future of advertising.”

 -- Tom Steinert-Threlkeld contributed to this article.

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