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Canoe Closer to Spot-Swapping

Canoe Ventures claims it’s on track for the May debut of its first advanced-advertising service — Community Addressable Messaging — which will let marketers place two different versions of their ads on national cable networks in different local cable-system zones.

Reed Barker, Canoe’s vice president of product management for addressable advertising, said the biggest challenge has been standardizing the process for delivering and playing out alternate spots across the six member cable companies’ different sites.

“The key challenges are that local ad sales are run uniquely not only by each MSO, but also site by site,” Barker said. “These local ad-insertion systems have only ever had to worry about their local ads. [Canoe has] been trying to pull those together to get a unified process that would work across all MSOs.”

Community Addressable Messaging, or “CAM” in Canoe’s shorthand, will initially segment spots based on average household income in different zones.

With CAM 1.0, advertisers will be able to target a second spot to 18 million homes in 370 ad zones where the household income tops $100,000. The default national ad will play out to another 42 million cable homes.

Canoe CEO David Verklin, at The Cable Show ’09 earlier this month, used American Express as an example, suggesting an ad for the regular Green Card would go to the nationwide base, while a spot for Gold Card would play to the 370 higher-income zones.

However, Canoe representatives clarified last week that American Express is not one of the charter advertisers for CAM. The venture has not disclosed which networks or advertisers will be part of the launch.

Barker said CAM is enabled in “well more than half” of the cable systems of the six Canoe MSOs, which are Comcast, Time Warner Cable, Cox Communications, Charter Communications, Cablevision Systems and Bright House Networks.

“Our primary concern is to do no harm on the local side,” Barker said.

The service uses SCTE 35 cue tones, which trigger an ad-insertion system to splice in an alternate ad. Canoe will define windows in traffic and billing systems so the insertion gear will know whether to act on, or ignore, the CAM breaks.

The high-income zones will then “process them like any other spot cable ad,” Barker said.

To deliver the actual 30-second spots, Canoe is contracting with a third-party electronic media distribution partner, which will deliver the ad copy over the Internet or satellite links to local systems.

As for pricing, Canoe remains mum on the specifics. “We are working with the programmers to determine pricing,” Canoe chief technology officer Arthur Orduna said.

So far, according to ad-insertion vendors, Canoe has been effective in getting the MSOs to cooperate with each other.

“I understand from a vendor perspective how difficult it is to get those people to sing from the same song sheet,” said SeaChange International vice president of product marketing Alan Hoff. “We can solve problems on the technical side, but we can’t dictate the business side. That’s Canoe’s role.”

With Canoe clearing orders across multiple MSOs, the venture is conceptually acting like “a national interconnect,” said BlackArrow vice president of distribution David Stengle.

“For a long time the MSO community, if they made an improvement in ad capabilities, it only covered the local avails — two minutes out of every hour,” he said. “Now the cable industry is working on a 100% solution, and that’s really exciting.”