Interview: Canoe Ventures' Verklin: Google TV Ads Is A Potential Partner

This story was written by David Kaplan.

Audio of the interview is here and excerpts are below:

-- Canoe as metaphor: This company isn't called "Battleship," Verklin said. Nor is it called "Ocean Liner." So what does the name signify? "A canoe is kind of tippy. The mission here is to bring interactivity and addressability to a national advertising and national content. But we can only do that if wethe MSOs, the networks and the advertisersstay in the boat, rowing together. There's been enormous enthusiasm from the MSOs. Part of this is mutual self-interest. That's always a marvelous basis for a partnership. The six MSOs know that only by working in tandem, that's the only way we can offer an addressable solution to the problem of national advertising and cable TV. The need is driving the cooperation and the cooperation is driving the need."

-- *Google* on Canoe: A few weeks ago, I spoke with Mike Steib, director of Google (NSDQ: GOOG) TV Ads, which exited out of beta and has been working with satellite TV company EchoStar (NSDQ: DISH) on selling targeted ads using set-top box data. I asked Steib how Google regards Canoe. He told me, "We view Canoe very favorably and we're rooting for them. What we want to see happen is see ads that are relevant. We're doing our part to make that happen. Canoe wants the same."

-- Mutual appreciation to collaboration?: I asked Verklin what he thought of Google, especially since he comes from an agency background, which might lead him to suspect the search giant. If he does harbor concerns, he certainly didn't show them. Verklin: "Tim Armstrong [Google's president, Advertising and Commerce] and I are going to get together in a couple of weeks, actually. Google TV Ads is kind of in a different space than Canoe. Google has really been focused on the auction-based model for selling media time and space. I think that's a really interesting idea. And in some areas, we'll probably need an electronic marketplace. So Google and Canoe could be in alignment. Canoe's focus is to try to bring interactivity to TV. And while what Google is doing is exciting, we do bring something to the party as well. There are 66 million cable TV households and Canoe represents almost 60 million of them. If we get the top 10 MSOs, two-thirds of America will be in the Canoe footprint before the end of the year. Those set-top boxes are under the control of the MSOs. That's our space, that's our technology. So both Google and Canoe are interested in the TV space, but our interests are not in conflict at this point. We think automation and auction is a good thing and they think addrssability is a good thing. So actually, Google and Canoe are potentially partners as we build out the platform called television." Lots more after the jump.

-- 120 days: Canoe plans to bring out its first product in 120 days. The product is called Creative Versioning, though internally, the company identifies it as "National Addressability." Verklin explains: "This is a very simple product. It uses existing cable zone technology, where we overlay the 1,200 cable zones in the U.S. with demographics. Using a U.S. census map or an Experian map, we can convert geography to demography. This product will allow us to take one spot on say, ESPN (NYSE: DIS), and in that spot, a marketing like Citibank, in households above $125,000 in personal annual income, can run a brokerage commercial; from $125,000 to $150,000, a home equity loan creative spot; and for households under $50,000 in income, a free checking spot. So that's purchasing one spot, but allowing the insert of three creative versions."

-- The challenge: If there are any difficulties that still need to be ironed out, Verklin says they have to do with marketing, not technologyat the start, at least. "This first product and the subsequent ones we'll be coming out with over the next six months will use existing technology. This is why I'm so excited about it. Everybody thinks Canoe has this enormous technological mission. And we do. But in the meantime, we can bring fantastic products like Creative Versioning to market. With Elections '08, we have a national VOD platform. And we're going to light up another VOD platform in the next month called My Life On Demand, which is for pharmaceutical ads and healthcare content."

-- Regulatory issues: Before Verklin was hired, one of the attributes that the MSOs were looking for in a CEO for Canoe would be someone who could serve as a corporate diplomat to Washington, DC. And that description was often applied to Verklin, whose public posture has always come across as earnestnot a quality that most ad execs can easily fake. And so, with Congress looking into behavioral targeting and the aborted tests that broadband ISP Charter Communications was doing with NebuAds still casting a pall over ad targeting, Verklin has his work cut out for him. "I was in Washington, DC last week. I'm spending a lot of time with the [industry trade group National Cable & Telecommunications Association]. The industry and Canoe fully intend to comply with every part of the 1986 cable TV act. We have enormous respect for personally identifiable information and consumer privacy in general."

-- Better measurement for all: So with one eye on the privacy issues, the other eye is on advancing the accuracy of audience measurement to benefit advertisers and sellers. "Right now, Nielsen can only measure the top 102 programs. So if you're [women's cable net] Lifetime and you have a late-night program, you can't actually tell an advertiser precisely how many people watch. Canoe can bring that data to the marketplace. Or, look at the Olympics. One of the great things was the TV coverage and the hours of streaming video. If you're *comScore*, you have incredible data on the web. But you aren't able to cross that with TV. Canoe can address that too."

By David Kaplan