NCTA: Competing Priorities Challenge Nationwide Cable Ad Venture

One of the greatest challenges facing Project Canoe, big cable’s ambitious plan to offer advertisers nationwide reach for their commercials, is making the effort a priority, said cable company executives participating in the The Cable Show hosted by the NCTA in New Orleans this week.

“Canoe requires a commitment from the industry,” said Arthur Orduna of cableco Brighthouse Networks. “We have to live in a reality in which we’re juggling multiple projects. Last July it was separable security, which was a pain in the butt, and now we’re looking at digital TV transition by next February. We have to keep focus through the urgency.”

John Collins, senior vice-president of advanced advertising technologies at Time Warner Cable, added that the urgency has to be tempered by the reality that Project Canoe is no simple task. “It’s not a 3- to 6-month effort but rather an evolution,” he said.

Project Canoe will be a joint company owned by the six largest U.S. cablecos. The initiative is designed to lure advertisers by offering greater reach and the ability to buy ads spanning as many cableco markets as needed.

While the goal of the multi-operator Project Canoe is clear, so is the to-do list that includes linking disparate and legacy systems as well as spending on necessary infrastructure.

“We’re on the way to creating a platform to access for targeted ads, which is a unique opportunity for us,” said Comcast Corp. CEO Brian Roberts. “Satellite can’t do it and telcos don’t have enough scale. It’s our next big opportunity,” he said of Project Canoe.

Progress has been made; Roberts said the venture partners are  close to hiring a CEO, but he didn’t provide additional details.

“If we only did it for MSO marketing itself, Project Canoe would still be worth doing,” saidCharlie Thurston, president of Comcast Spotlight, the advertising sales division of Comcast.

However, content executives familiar with the project see the larger goal clearly. “I’m encouraged by what cable is doing with Project Canoe,” said Brian Hunt, senior vice president of advertising for NBC Universal. “We really need the [resulting] scale.”

Meanwhile, the analyst community is taking a “wait and see” attitude about the undertaking. “Canoe can hopefully drive revenues over the coming years, but there’s still a lot of growth left in telecom,” said Doug Mitchelson, a director and senior analyst with Deutsche Bank Securities, adding there are many questions that need to be answered before he and others can figure out the value of the effort.

Among those questions, he said, is how much is it going to cost? How much plant capacity and servers will be needed? And, how will ad agencies handle the resulting opportunity. “They’re struggling with everything,” Mitchelson said. “Some would be easy to work with on it, but others would take years.”

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