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Rainbow, NBCU,Others ClimbInto Canoe

CANOE VENTURES, the company formed in 2008 to at long last overcome the technical hurdles of interactive advertising, has taken a big step toward that goal, striking deals with four of the industry’s top content providers. Discovery Communications, Rainbow Media, NBC Universal and Comcast have signed on to enable Canoe’s national interactive television (ITV) solutions on their inventory.

The companies encompass dozens of channels—including USA Network, Syfy, Bravo, E!, AMC, Sundance Channel, Discovery, TLC and Animal Planet—and account for billions of dollars in advertising spending. “This is a major step forward for advertising,” says David Verklin, CEO of Canoe Ventures.

The programming partners say they are joining the initiative now because Canoe is ready to enable RFI technology on their networks as early as next month. While some companies have dabbled with request-for-information technology, the Canoe initiative is the first broad roll-out on linear television. Additional applications, including in-program voting, polling and T-commerce, will be rolled out in the third quarter.

“We think it’s a very powerful and positive first step,” says Dave Cassaro, president of Comcast ad sales. “Everyone has a vested interest in seeing this succeed and taking it to the next level.

“We’re talking to some sophisticated, large advertisers,” Cassaro adds, though he would not reveal which ones. “Everybody wants to say to their clients they’re doing everything they can to continue to prove the value of [national TV], which we think is the most powerful marketing tool.”

“We’re obviously in a period where advertisers are eager to measure actual engagement from viewers and consumers,” says Arlene Manos, president of national ad sales for Rainbow Media.

Rainbow parent Cablevision introduced a suite of ITV advertising applications as part of the 2009 upfront, and earlier this year Zenith Media became the first agency to utilize the applications, forming a dedicated interactive advertising channel for Pillsbury.

“That’s been a good learning opportunity for [our advertisers],” Manos adds. “This takes it wider.”

In-program apps also have significant implications for programmers seeking deeper viewer engagement with their content. For example, with the click of their remotes, fans could weigh in on which of the Real Housewives of New Jersey behaved the worst; or fashionistas could purchase Kim Kardashian’s mile-high stilettos.

Canoe’s technology also gives marketers crucial data about their customers. And, as Verklin stresses, the terminology is not “popup” but rather an “overlay” that appears at the bottom of the screen when the ad is airing. “We’ll be able to tell advertisers how many people saw the overlay and clicked on it, and how many people completed it,” he adds. “That’s more metrics on a TV ad than ever before. You’re talking about the beginning of a revolution.”

Interactive television has been a pipe dream since Warner Cable rolled out Qube in 1977. The major stumbling block has been the lack of a standard back-office technology. Canoe—a consortium of cablers (Bright House, Cablevision, Charter, Comcast, Cox and Time Warner Cable)—employs EBIF (Enhanced Binary Interchange Format) technology to standardize ITV nationally.

The cable industry has committed to deploying 25 million EBIF-powered ITV households by the end of 2010. Comcast already has nearly 13 million. Time Warner has been deploying for several months, and Charter also is moving forward. The technology works with existing set-top boxes and remotes.

The overlay, according to Verklin, “is an enhancement to the ad. It is popping up in the middle of the ad and it makes it more actionable, more relevant and more engaging.”

Given that consumers are already inundated by marketing messages on every conceivable device and surface, executives stress that judicious deployment of the overlays is key. “I think there will be a very limited supply of it,” Cassaro points out. “You can’t do it for every single commercial position. So, scarcity sometimes impacts value or price.

“I’m not necessarily concerned about a backlash,” Cassaro adds. “I think it will prove beyond the shadow of a doubt how valuable television advertising with these applications can be.”