Canoe Ventures’ Reorg Represents Setback For Targeted TV – But How Big?

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February 23, 2012 – 2:41 am

After years of refuting rumors that the six major cable companies would “someday-soon” pull the plug on interactive TV joint project Canoe Ventures, the company is being gutted and dramatically scaled back. While the name will remain, Canoe will abandon all its efforts to establish a national targeted TV ad sales platform and will instead focus solely on driving video-on-demand ads and on TV Everywhere projects that involve connecting programming and ads found on the set-top box to subscribers’ “second screen” devices any where in the household.

About 120 out of 150 total Canoe staffers will be let go as a result of the company’s retreat from interactive TV ad sales, a Canoe rep told TVExchanger, confirming an earlier report from Multichannel News’ Todd Spangler. CEO Kathy Trimko, who had replaced Canoe’s first leader, media buying industry veteran David Verklin, in June, is also being let go, along with the rest of the senior team. The only top executive being retained is Joel Hassell, who is being promoted to CEO from chief technology officer. The 30 remaining staffers will be based in Denver.

While Canoe was often hampered by delays and missed deadlines, according to industry observers, which tended to be attributed to the difficulty in crafting a national interactive ad platform from companies’ whose local footprints tended to vary in degrees of digital sophistication.

Still, a Canoe rep insisted that many of those early complaints were long since dealt with. “We built the largest national ITV platform ever, reaching 25 million households and actually overcame a lot of the complexities of connecting different systems,” the rep said. “A lot of the hurdles that have been outlined have actually been overcome. This came down to a business decision.”

The business decision, we’re told, came during the last several weeks, when Canoe’s board members and “key industry stakeholders” reviewed the entity’s mission and product roadmap. “We looked closely at the technology, the processes and product assets and examined current and emerging market trends,” the rep said.

Ultimately, the board felt that there was more money to be made by concentrating on VOD ad insertions, though, there too, dissatisfaction with the seeming lack of progress in attracting large amounts of ad spending and scale continues as well.

As the ITV business winds down, the technology platform will be used to power the VOD ad insertion offering.

So what does this mean for ITV and addressable advertising and the $70 billion U.S. TV ad sales business? We asked a number of media buying veterans about their hopes and concerns for the industry being able to realize success in the ITV realm?

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Rino Scanzoni, chairman of WPP's Mediaedge:cia North America and chief investment officer for GroupM North America

I don’t think this is any reflection on the value and eventual success of addressable TV. Unfortunately Canoe like many ventures that are funded and managed by consortium of different competitive interests and priorities is always doomed to failure. As the competition from Dish/Direct that have embraced the technology and its advertising applications show its viability and revenue potential, the MSO’s will individually make this a business priority.

Tracey Scheppach, SVP, Innovations Director at VivaKi Starcom MediaVest Group

The premise was absolutely right: collaboration. But not everyone was in the boat. Even the members who were in the boat were fighting with each other. There were ostensibly six operators, but I’m not so sure how many were active participants. There were two dominant players rowing in the opposite direction.

And when I say not everyone was in the boat, they were missing telco and satellite – mainly because those two were further along in achieving addressability. As an ad agency, we’re looking for seamlessness and scale. So they had cable operators and networks, but they were missing advertisers, agencies and, most importantly, consumers, in the equation.

They never listened to the ad agencies. The most valuable thing to us as advertisers and agencies is addressability. Depending on how you define interactive television advertising, this is probably the death knell. Which is a very sad day for a lot of people. The talent Canoe had working ITV was top notch. They knew what they were doing technically. It was how they approached collaboration and not all players wanted it to succeed.

This is a huge wake-up call for the television industry and specifically for cable operators: they’ve got to figure out how to work together. The consumer is changing and the industry has to reflect that.

Brad Adgate, Research Director at Horizon Media

You look back at Canoe and there was a lot of hype about what they were going to be able to do. It probably bit off more than it can chew. It’s got to be difficult to assemble six different cable operators in a room and get them to operate on the same page. There’s different technologies, different levels of adoption on the part of advertisers. It was and remains an enormous challenge.

I think it will ultimately be up to the video operators themselves. I think one company will come up with a model that works and the rest will follow suit. The technology is there, so ITV is not going to go a way. About half the TV sets sold last year were web-enhanced TVs. At the Consumer Electronics Show, manufacturers like Samsung and LG were showing off their ad platforms as part of their wireless offerings. So beyond the carriers, that’s one possibility of how ITV will be further developed.

But it’s still the wild west out there. Who takes charge of ITV is yet to be decided.

Greg Kahn, EVP, Business Development Director, Optimedia

Obviously, we’re disappointed. It was an earnest effort and we’re looking for initiatives that have scale. Interactive TV is becoming a bigger area of interest for our clients. So we were rooting for it to work.

This will definitely set back the effort on ITV. But we know the individual MSOs and satellite companies are still coming out with their own offerings. But the problem is whether separately, those companies can provide the reach and insight that make it worthwhile for advertisers to support those systems.

At the same time, there are so many new offerings in the marketplace, especially around social TV and tablets, as well as VOD and SVOD, that the attention is going to be diverted from ITV these days. In any case, the media industry is not about to slowdown because Canoe itself isn’t the only point of entry for media sellers.

Sara Livingston, Digital Marketing Manager, Seamless

It’s sort of upsetting though just how flat targeted TV fell in that first 2007/2008 iteration, as there was just an incredible amount of potential there. The data really was there to a certain extent, the MSOs just needed to standardize it and fully leverage the set-top boxes. The crazy thing is, this is the exact opposite situation that display (& mobile to a certain extent) are currently in—whereby targeted TV had the advertiser support & money, but the actual targeting & tech wasn’t there, and display (& partially mobile) have the targeting and tech (for the most part), but is struggling to get the big advertiser budgets.

Tim Hanlon, CEO/founder, The Vertere Group

"Interactive TV" (however you define it) does not fade away with Canoe's demise – in fact, quite the opposite.

Many aspects of the medium's quickening evolution are evident from a multitude of innovative sources *outside* the legacy operator set-top walled garden hegemony. And those sources have taken it upon themselves to add enjoyment and/or solve problems for TV consumers – after waiting for more than a decade for the operator gatekeepers to allow them to do so. Canoe was simply an attempt by dominant incumbents to control the development of advanced television in a measured and, many would argue, restrictive way; unfortunately (fortunately?) the outside world - especially the increasingly sophisticated viewer – is running at a far faster pace.

If you're a marketer or agency, you can sit and wait (possibly forever) for all the incumbent players to join hands in "scale" before you care again. Or you can recognize that things like addressable messaging, simplified/elegant guidance and navigation, non-linear ad insertion, social TV, mobile/tablet enhanced viewing, modernized granular measurement, unbundled/a la carte programming, and yes, over-the-top viewing of Internet-originated video content – are all being pioneered right now by myriad non-incumbents (big and small) – and that the opportunity to learn from and align with them now is here for those who want to participate and influence. And very little of it will scale in traditionally expected ways.

The future of TV/video is very much underway and a lot closer than you think; if you're waiting for today's legacy incumbents to map it out for you, you (and they) will clearly miss it.

By David Kaplan

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February 23, 2012 – 2:41 am

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