In this series of interviews about the emerging video space, we’ve spoken with thought leaders in live streaming, product development, content recommendation and massive end-to-end delivery solutions. One of the critical facets we have not yet explored is advertising in Video on Demand (VOD). Enter Chris Pizzurro of Canoe.
Canoe is an ad tech specialist that works with TV network programmers and cable providers to facilitate the next generation of ad placement for VOD platforms. It was established by six of the leading cable operators, including Comcast, Cox and Time Warner, to anticipate the fast-approaching changes in video. Since 2011, Pizzurro, as head of business development, has been optimizing reliable, high-quality ad placement for the new generation of video delivery. It’s the kind of thing that when done well, you don’t even notice it’s there.
Q: With all the recent developments in VOD, where do you guys come in?
A: The networks need help with all this new technology. We say to them, we can help you with VOD, we can help you with OTT [over-the-top content], we can help you with TV Everywhere. We have tried-and true techniques. And as on-demand viewing delivery and behavior continues to change, we are finding efficiencies and expanding it organically to these other areas.
As long as people are running ads, we’ll be serving them. The machine is in place, OTT is growing, TV Everywhere is growing. Whether it’s through this pipe, or that pipe, you still need to get the product there in a quality manner: quality of video, quality of ads, no buffer, no time-outs.
Q: It does seem like the growth of emerging TV is compounding.
A: When we consolidated on VOD about four years ago, we had a head count of 40 people. We still have the same number and we’re doing 10 times the volume. We have to adapt. We know techniques. You, as the network programmer, can go down the road and mess up, or we can help you. So a combination of automation, experience and people has led us to keep the head count where it is, grow the business and help the programmers.
Consumers can get video anywhere and anytime, which is great. But people are working really hard behind the scenes to make sure that’s the case and that it’s seamless. I think programmers have finally realized that TV is a combination of broadcast, cable, VOD and OTT. And that is complex. Programmers need help and that’s why they appreciate Canoe, because we make it easy for them to have a successful pitch to cable operators. We make it work.
Q: Let’s talk about the two major models: subscription vs. advertising.
A: This has existed since the beginning of time. What’s interesting is that people think a household has to be one or the other. But there are all different combinations within a single household. Even now with cord-cutting, there is this misconception that they must be either a cord-cutting household or not, or they’re not. That’s not the case. In reality, multiple preferences have coexisted and will continue to coexist within a single household, and programmers are constantly weighing the revenue for each and the cost-benefit of each.
Even in today’s world where HBO and CBS have gone OTT so much, that’s the way their economics have always been in relation to the cable operator. They can afford to play around a bit more than others. A&E may not be so aggressive, because it is getting that revenue from the operator. Each programmer will find which balance is right for it to maximize revenue. It’s in no way an either/or situation.
Q: Are we in a phase of proliferation or consolidation right now?
A: It’s a bit of both. There is definitely consolidation, because companies see that they have to consolidate domestically to compete globally. There’s a reason why Comcast buys a software company like Freewheel, which does a deal with a company in France. The global vision is driving the domestic consolidation. Not that it’s easy, but technology makes it easier. It’s really about what it takes to compete with Google or Facebook. And the first check box is, you need to be global.
Q: Your business is measured in impressions, which often gets a bad rap.
A: We thought long and hard about how to measure a true view. I think that’s one of the reasons we were successful: Our data is as pristine and pure as Nielsen’s. For all the knocks Nielsen takes, at the end of the day it is solid and reliable and it is still the standard. It’s consistently bad for everyone or it’s consistently good for everyone, but it’s consistent. I think part of our success has been getting that balance of the best of digital and the reliability of a single source like Nielsen. So we feel our impression is a really good impression. And the currency for TV is an impression.
Q: Who is making the best use of ad targeting in VOD?
A: The ones who are most successful are not reinventing the wheel, but rather regurgitating the wheel in a smart, cost-effective way. Now you can insert an ad in a timelier fashion than you did before. I can deliver that ad so my creative is actually relevant to that person. No one is particularly fancy in their targeting or their creative, but people are certainly using the platform for what it can do.
Where we are finding a lot of smart stuff going on is in the networks using targeting in their tuning for programs, including other VOD programs. For years there was this mentality of, “I’m a linear network, all this new stuff is just noise.” Now they’re like, “Oh, maybe it’s okay to advertise on VOD.”
And the networks are also saying, “Wait a minute, maybe I should put a VOD tune-in spot after someone else’s show to use as a recommendation engine to drive people to my program.” Well, that’s kind of sophisticated and kind of cool. The VC guys don’t get all excited over our solution, because it’s not the next Snapchat, but the people who actually do this on a daily basis for the good of the stock price get it. Is it as sexy as the new iPhone? No. But we can look at set-top-box data and tell them if something is a good idea or a bad idea.
Q: And you have to continually prove your worth in this environment. You can’t just ride if for five years with a sexy PowerPoint.
A: Nope. There’s nowhere to hide. No one can phone anything in anymore.
For more information on Canoe, visit canoeventures.com.