Cable Cooperation with Rivals Said Needed for Interactivity
Cable operators must work with each other and outsiders, including competitors sometimes, to vastly expand ad insertion and interactive services (CD April 1 p3), executives said at the NCTA show. The industry should take a cue from eBay, Facebook and YouTube by trying to make many “connections” and not maintain a walled garden of limited user access to content, said Mitch Weinraub, Comcast Media Center executive director of products and services. Scale is the basis of those Web sites’ existence, not just their growth, he said late Wednesday: “Without their mass, without their scale, these businesses wouldn’t work.”
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In interviews Thursday, cable vendor executives agreed that bigger potential audience size and openness to work with other platforms including competitors will help the industry expand addressable ads. CSG Systems, which sends bills to cable customers, has “become much more open as a company of how we engage with competitors than we ever have,” said CEO Peter Kalan. “We take our applications and engage with competitors in a very different way than we would have before” and the company’s applications now work with rivals, he said. “Mass matters,” he said. “You have to engage with this because it’s an open world” and walled gardens haven’t worked, Kalan added.
Working with competitors can be “hard,” but it’s necessary to move “out of the traditional cable environment and into some other areas,” Weinraub said. That may include working with cellphone and texting networks, he said. “Internet ad-decision engines” are “getting pretty good at being able to place the right advertisement in front of the right person,” so “why would we not take advantage of that?”
Interactive services that operators can offer include TV-based social networking, Weinraub said: The name of a show being watched over a set-top box appears on the subscriber’s Facebook page. Cable customers should be able to chat in large groups, he added. “If we're really going to have voting and polling that makes sense” it “can’t just be within a certain group.”
Cable needs a “centralized platform” to communicate with programmers, advertising agencies and others on ads, said Arthur Orduna, chief technical officer of the Canoe joint venture of six operators. “Let’s try to do something that a lot of us have tried to do in the past -- that is, create that big process that links us on a national level,” he said. Ad agencies still will work directly with individual operators, but “we want to create this platforms” to “reduce complexity” and allow conversations on a national scale, Orduna said. Wireless applications may eventually be included, he added.
“Any design that we are going to put together” will have “strict” privacy rules and auditing capabilities, Orduna said. It will leave it up to participating operators to decide what types of technology and vendors to use, he said. “What we are working on, what they look to Canoe for, is to what kind of data … We don’t want to specify at all the actual collection mechanisms that are involved.”
Many customers probably want to get personalized ads, but they must have a choice of opting out or opting into such services, said Dave Caputo, CEO of Sandvine, a seller of network management products. “There are going to be people who are going to be very concerned in terms of relevant personalized ads” so “any approach that’s taken should be absolutely sacrosanct on the privacy aspect,” he said. “I think most people would see value in that,” Caputo added, because “that ad could subsidize the utility that people are getting from that content or application.