The Trench-Level View From Comcast Spotlight

Kevin Smith, group VP, Comcast Spotlight

Kevin Smith, group VP, Comcast Spotlight

March 3, 2012 – With the recent collapse of Canoe Ventures as a focal point in the cable industry’s drive to build a systematic approach to advanced advertising it would be easy to assume the industry’s ad agenda had suffered a major setback. That would be a mistake.
 
By all accounts, the advanced advertising push is closer to becoming mainstream than ever before. Collective pursuit of the technological foundation for advanced advertising under the auspices of the Society of Cable Telecommunications Engineers and CableLabs is bearing fruit. The cable industry has made significant progress in shared efforts to reach common ground with Madison Avenue on the key question of how to monetize things like addressability, interactivity, time-shifted content placements and long-form messaging in the context of campaigns that extend across all devices.

But, as often reported in these pages since the inception of Canoe, the key to progress has been how individual MSOs apply the technological templates and interactions with Madison Avenue to mount trials and real campaigns, one advertiser at a time. It’s not about serial pursuit of one mode, such as the oft-delayed Request for Information model that was finally put into play on the EBIF (Enhanced TV Binary Interchange Format) platform prior to Canoe’s collapse. It’s about moving aggressively on all fronts as the resources and strategic vision of each MSO allows, with all players coming together to share information and to devise new solutions in response to what they’re learning in the trenches.

Nothing better illustrates how this process is unfolding than the work spearheaded by Kevin Smith, group vice president at Comcast Spotlight, whose team is charged with building the advanced advertising business model in tandem with the traditional spot advertising effort that remains the core revenue generator for Comcast. Smith provided an update of where things stand in a conversation with ScreenPlays editor Fred Dawson at the Consumer Electronics Show in January. The edited transcript of that discussion follows.

ScreenPlays – Obviously this is a time of tremendous change in advertising, and Comcast has very much been in the forefront of trying to move things along and set up some new ways of advertising across all screens, across all platforms. To start, give us an idea of how your group works within Comcast Spotlight to drive the next generation of advertising in terms of things like addressable advertising, the interactive kinds of things, companion devices, etc.

Kevin Smith – We complement our core team. Our core team at Spotlight is almost a couple thousand sellers in 80 plus markets in the U.S., talking to local advertisers, agencies and national spot advertisers. The bulk of our business is 30-second units. We’ve enhanced that with Internet banners, and ultimately that will get enhanced with live streams, etc.

So my group is really evangelical as well as testing and setting up a lab. Comcast has built pretty sophisticated systems that afford our advertisers much more capability. With regard to interactivity, for instance, what’s available today is the ability for an advertiser to run a traditional 30-second spot and telescope to a long format. Here an advertiser has an opportunity to tell more of their story or an information-based message.

Or for a programmer who’s interested in getting a consumer to watch a program, we have a remind-record capability where inserted in the spot is the ability to remind our consumer to record a particular program. And we also have request for information, which is, “I’d like to see more data or a special offer for a coupon.” So these are just early stage capabilities.

What my group does is take those capabilities out to the advertiser and integrate them as part of an overall campaign. And that brings different metrics into play. With the traditional metrics of evaluation we talk about a cost per thousand or a cost per point. If I’m providing leads to an advertiser, that’s a different value proposition.

So what we take out to our advertisers is an integrated campaign. It probably has traditional spots, and they may be targeted to a specific group that’s identified, depending on our data bases, for an advertiser to understand where there’s a higher concentration of a particular customer. So we may message to that particular group in our zones. We may enhance that from the capability of our iTV portfolio. We may also augment that with some banner ads. But the point of the matter is that as these technologies and platforms evolve we’ve got to try to put some clarity to the blur.

SP – In other words, define what the business model is.

Smith – From our standpoint, how do we monetize it? From the advertiser’s standpoint, how do I buy it, how do I plan it?

SP – Where does it fit on my spread sheet?

Smith – Where does it fit? Does it fit into my stewardship system? Do I need to buy more of this and less of that?

SP – Do you find yourself in the position of having to define these things and then going to them and saying, I think this is worth this, and then negotiating around all that?

Smith – Yeah. There’s much more data, as you can imagine. So you have to simplify the data. And then ultimately for us, we’re looking to drive a commitment. So there’s a negotiation on the traditional spots, and there’s a negotiation on the value add, and what’s the package commitment, etc. And then, what’s the ROI?
ROI, as traditionally measured, I order 200 rating points at this cost per point. But now they may be interested in a certain number of leads. They may be interested in paying a certain cost for a lead. So now we have a new set of metrics we bring into the equation. It’s a deeper conversation. It brings us closer to the advertiser’s business as opposed to just their media plan. We’d like to know more, because the more we know, the better we think we are at making smarter recommendations for the advertiser’s overall media campaign.

SP – Speaking of those metrics and the data processing, you are aggregating all this across many set-tops and all across your marketplace. As you become more centralized, I assume you have access to data in a more centralized manner. However, it’s a matter of defining it and spewing it out in ways that are conversant with whatever it is your marketplace is looking for. Is some of that getting defined in a more or less standardized way that begins to make sense to different people as you’re talking to them?

Smith – Yeah, I think this is a process. We’re very sensitive about the data we use as it relates to the privacy and protection of our customers. We really look at this very closely in terms of what data we use and how we aggregate that. But, more importantly, to the advertiser on the B-to-B side, it’s only good if it’s useful intelligence, if it’s a valuable insight. So turning the data into nuggets of insight is the big challenge, because there’s a lot of data.

As we evolve, our competencies are becoming different. We’re not just trying to sell a spot. We’re really putting together a solution that has information and data sets, including mobile data sets, behind it. So we’re culling through that and trying to provide insights, just enough that the end user, our client can see some movement of the needle. Whatever that is, whether it’s applications for a credit card, if it’s test drives for a car, if it’s folks going into a dealership, there are different metrics. So it’s a learning process.

SP – Do you find some of the advertisers on board with this agenda and very supportive around working with you, or is there just a lot of skepticism out there?

Smith – It’s process. It could take 50 meetings, because it’s not the traditional way of doing business. The traditional way of doing business is you have a TV budget, and you have an Internet budget. I’m going to bring my proposition in and price it, hopefully competitively, and I should get some share. Now we’re talking about an integration of three media, two iTV platforms, different sets of data.

To the traditional buyer or planner this could be perceived as foreign. So we move up the chain, and we start to talk to folks who have more accountability on sales and revenue. When we can speak that language and engage in that conversation is when we begin to get some traction. When we get traction, though, ultimately at a senior level, they’re not typically sitting with a budget. It’s got to come from somewhere.

So now we’ve worked up, we have a green light, and we’re off on another race. Now we’ve got to work down and work through the folks who ultimately administer and plan the budget and execute. So it is a process. It’s filled with challenges, new systems, new nomenclature. But, you know what, when you win and you deliver results, there’s no better feeling.

SP – Are you finding a lower hanging fruit is with some of the on-demand content you have to offer in terms of dynamic advertising placements around that?

Smith – On demand is fascinating for us just on the growth of views, just the number of views in the millions and millions per month. There’s interest now, because either you have a DVR or you go on demand. Business folks are seeing that. The technology is tested and working, so finally we’re out of testing mode and into deployment with dynamic ad insertion, mostly pre-rolls with our networks, and we’re working with our network partners on rights, because this is not your traditional linear campaign.

These are spots. The ad loads may be different; the number of units is different. But what’s great about this is, this is an engaged viewer. This is a viewer who has made a decision to watch a program. This is what’s exciting to us. We have actual data, real-time data, on that viewership. So how we bring that into our mix, does it complement a traditional linear campaign, do we use that to trigger someone to long-form content – this is all this process of learning.

SP – It’s not necessarily a segmented buy.

Smith – It’s an integrated buy.

SP – It’s on the linear side in real time and then it becomes another opportunity when it moves into time shift.

Smith – Could be, because in the stratification of the audience, what we think is happening is the linear viewer who is watching perhaps appointment viewing may be different than the on-demand viewer.

SP – By about 20, 30 years.

Smith – Could be. And then you go to your iPad and watch that same content. Or you flip over to the Internet on your computer or an iPhone. So these are different audiences. There’s some duplication. But they’re all part of perhaps the target audience for the advertiser. Putting them in the mix of an overall campaign is really our quest.

SP – You mentioned request for information as part of what you’re selling now, which ties in with EBIF.

Smith – It does.

SP – How’s all that going from your perspective? Has that become a key product or is it something that is just part of a portfolio?

Smith – I think it has become part of a portfolio. It enhances a campaign. It works for some advertisers. It doesn’t for others; it’s just not part of their messaging. They may be brand focused; they’re not looking to give deals. So what we have found with RFI with some of our advertisers is that it’s great for leader generation for someone looking for leads. That could be a national shampoo manufacturer. It could be an automotive or motorcycle distributor. We’re learning. They’re all relatively new in the last two years, and you only learn by doing.

SP – One of the things I’ve heard repeatedly in our own conferences from the advertising community, agency executives and some of the content folks is that selling us interactivity, selling us RFI, selling us these things, isn’t what we’re looking for right now. We want better definitions of our audiences, not super granular targeting, just good ways to block out key definitions of demographics, and we need to have this across all platforms. We need a unified campaign capability. Sounds like what you’ve got organized at this point is the capability to deliver a multiscreen campaign opportunity to those that are interested.

Smith – Absolutely. That’s what we do. We really put together an integrated campaign. And that campaign consists of multiple elements. It could be a high-value network campaign which would be a targeted campaign to one of our zones that’s been identified as high profile with a higher propensity to buy something. We’ll enhance that campaign then with perhaps dynamic ad insertion, perhaps with an iTV trigger, perhaps with a long-form message.

SP – You have that integrated from a centralized standpoint across your footprint so you can go into different zones. You can do that in whatever way works for your customer?

Smith – Whatever makes sense for the customer. What drives that is the data – their data in terms of their profiles of their customers matched up anonymously against our customers. Then we get a better idea of who their folks are and who of theirs are our particular customers. So we reduce the waste. We don’t eliminate it, but we begin to reduce some of the waste and hone in hitting a few, not one to one, but hitting a few perhaps, versus many. And we do that with your linear and an Internet ad, etc., and then track the results.

SP – So you’ve accomplished the integration, you have the technology. It’s now an education and business model description.

Smith – And hopefully an industry. And that takes time, because now you’re building consensus, you’re building metrics in terms of valuation. Ultimately there may be a currency. You need to find who’s going to buy it. Does the money come from the TV buyer?

SP – Do you find yourself working closely with your colleagues across different MSOs to help, even totally apart from standards, just to begin to talk the same language?

Smith – We do. We’re partners with other MSOs in National Cable Communications, which is our national rep. We’ve added additional relationships with providers like AT&T and DirecTV, all with the goal of just consolidating this distribution for the advertiser. They don’t want to deal with ten people. They want to deal with one. And what we’ve tried to do is consolidate and simplify the process. It’s a process, though.

SP – But at least it’s now doable.

Smith – Absolutely.

SP – Which would suggest it’s going to start to roll, because what I’m picking up from Madison Avenue is they want this.

Smith – They do. This is all driven by the consumer. It’s about what we can do to make it easier for the client to hit who they need to hit in terms of their messaging across whatever the platform is and to give them comfort we’re providing a smart mix.

SP – It’s been a long haul. There’s been a lot of skepticism, but it sounds like it’s now an opportunity, the proof of concept is really there.

Smith – It is. It’s real money. There are major advertisers. They’re sophisticated with high expectations. We’ve really worked hard to get on this playing field. We’ll play hard and smart. We’re committed for the long haul for this. Not every campaign will be a great success. They don’t have to be if you can gain and garner good insights. But we think ultimately this will evolve and this ecosystem may change. And if we can play a part in the crafting of that with our partners, then we think we’ve done our job.

SP – We’ll certainly be watching how it unfolds this year. Thanks so much Kevin.

Smith – My pleasure.