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Canoe's David Verklin Navigates Tough Waters

OnScreen Media Summit – Complete Coverage from Broadcasting & Cable and Multichannel News

As CEO of Canoe Ventures, longtime ad exec David Verklin is on a crusade to reinvigorate the television platform and stop the drain of ad dollars to the major Internet players. Verklin, still in his first 100 days on the job, brings a wealth of knowledge about how the ad industry operates and what marketers are looking for from the next generation of TV applications.

As he prepares for his keynote address at the B&C/Multichannel News Dec. 2 OnScreen Media Summit in New York, Verklin talks to B&C Business Editor Claire Atkinson about the challenge of holding together a consortium involving the big six cable operators and how he's navigating the thorny issue of privacy.

What was the genesis of Canoe Ventures?

The genesis was simply a vision to see if we could use the two-way digital infrastructure of cable to bring advanced advertising capabilities to TV. You already can use video-on-demand and have interactivity; we could take it to the next level.

[Comcast COO] Steve Burke gets a lot of credit. He called the top six MSOs to think about joining forces to turn the TV set into a platform. Our name came from a line he used about getting into a boat, a canoe, together.

We needed the big six to come together; Comcast, Time Warner Cable, Cox, Bright House, Cablevision and Charter, and I love the idea of Canoe—that we do have to stay together. Canoes can be tippy. A lot of consortia haven't stayed together. Keeping the consortia together will be a challenge, but canoes are a speedy way to travel.

If addressability is the future of advertising, why don't more marketers spend in local cable?

The true promise of addressability is to put dog food ads just in households that own dogs. Local is good for products with geographic specificity. Cable offers 2,400 zones, but even with that specificity it is still limiting. Local cable is far superior to local broadcast, but the real holy grail of digital is at the household level, so you get the ads you are interested in.

Watch TV and close your eyes every time a commercial comes on that you don't think you should be seeing; you could eliminate about a third.

There's greater concern about cable companies tracking our behavior than Internet companies. Addressable advertising depends on knowing who the customer is, so how will you get to know me without invading my privacy?

We'll use the same techniques that direct marketers use. You and I are probably going to get a mailing for a credit card. There's a lot of interest [in Canoe] from Citibank. Instead of sending something by mail, how about through the TV and then suggest “click here”? It's a much more efficient way to deliver promotions.

I feel that there is no industry more regulated than cable. Cable is being held to a higher standard. We are absolutely committed to the Cable TV Privacy Act of 1984 [in terms of maintaining consumer privacy].

Set-top box data has become very valuable. Who are you working with on it, and might we see any joint ventures in Canoe's future?

I'm in my first 100 days and am amazed at the number of companies that exist just to circle Canoe. We've talked to Nielsen, TNS, ComScore, Axiom, TRA, Rentrak, NavIQ, Invidi, the entire ecosystem. Joint ventures? It's too early to tell.

Set-top box data for measurement purposes has become important. If you are watching an ad on Fuse at 2 in the morning, you don't get a rating, but the set-top box can put a number on that, and that's great for the ecosystem because maybe those people are very valuable to someone.

What are the sources of revenue for Canoe?

There are three potential lines of business. One is addressability and figuring out how we'll take a toll for using our pipes. The next is data. We'll want to look at what parts drive a platform and better audience flows, and how people come in and out of a show. The third is interactivity; you have polling, RFI [requests for information], T-commerce [allowing people to buy products as they see them on TV] and telescoping [zooming in on an aspect of a show]. Most of those applications are pay-for-performance. RFI might be a pay-per-click and a revenue share. For polling and voting, there might be an enabling fee.

Are there any preconceptions or misconceptions about Canoe that you'd like to dispel? Anything you want to tell the world?

TV is back in the game. Internet search is a spectacular application. It is a thing of beauty. Internet display advertising is not a killer application. I see an enormous amount of mortgage ads online; it's a small ad unit and I ask people at every cocktail party, when did you last click on a display ad online? I can't find anyone. The transaction usually takes place at the bricks-and-mortar level, so you don't know if [the ad] led to a sale.

I think the Internet people have hoodwinked the industry; search is amazing but display is not a killer application. If TV advertising is going to compete, we need to bring accountability to TV. Canoe is designed to get TV back in the game and compete with the digital platform.

How you can help during a recession when everyone's looking to save money?

This economy is putting more emphasis on Canoe. Everyone is rooting for TV. They want an effective platform and people are starting to see through the Internet and ask, "What do we do new in a recession?" Marketing directors say search, and the CEO asks what else is new. Canoe is a bright shiny object. I feel the weight of the world; people want me to do this faster. One thing you can count on in cable is speed.