Future TV: Time Warner Cable Balances Ad Demand With Infrastructure

In an era where Wall Street is keeping a very close eye on service provider capital expenditures, a top Time Warner Cable executive said Wednesday the company is striving to balance the demand for advertising opportunities with its current network and related infrastructure.

The overwhelming focus of the two-day Future TV event has surrounded new advertising models brought on by an ever-increasing number of distribution methods that go far beyond traditional TV and broadcast  30-second ad spots blasted to the masses.

“The more targeting you want, the more equipment we need to put in place,” said Joan Gillman, executive vice-president and president of Time Warner Cable, as part of a presentation in which she detailed the cable giants menu of ways for advertiser to reach consumers. “Cable has not done a good job of discussing its inventory.”

Time Warner’s inventory goes beyond ad basics to include the powerful ability to reach any of what she called 2,400 retail trading areas, which correspond to zip codes. “And we can identify just the households with an annual income of over $100,000.” The cable giant also claimed to be able to offer advertiser interactive ad options in 15 markets today.

And, unlike many service providers that rely on third party services to provide audience viewing data, Time Warner collects its own, directly from the set-top boxes in the homes of its subscribers.

Of its 2,400 retail trading areas, the Los Angeles DMA is made up of 49, which gives advertisers the ability to tightly target the metro area’s huge, and ethnically diverse, TV viewing audience. “We can slice and dice L.A.,” said Gillman. But, if you want to reach more retail trading areas or 15 markets with interactive capabilities, Time Warner needs to open the checkbook.

The company is willing to spend money to make money, but “we need to demonstrate there’s demand for the equipment and that people will use it,” explained Gillman.

Time Warner is cautious with capital spending, perhaps slightly more so after seeing larger cableco Comcast have Wall Street slam their stock just hours after the company announced last month $300 million above its capital expenditure guidance for 2007.

But given an ad market faced with more options for reaching consumers, the possibility of adding equipment to the network doesn’t seem to be the cableco’s biggest challenge.{vpipagebreak}

“There is not shortage of ideas beyond the 30-second spot,” said Gillman. “The real challenge for us in this industry is to prioritize ideas for what people think will drive the greatest value for the advertiser.”

The senior cableco exec emphasized that advertisers can use it ability to target individual zones with as little as a single channel on the cable system to experiment and receive the precious performance data and easily take a message throughout a region if satisfied.

“We’ve done a lot of testing in individual markets with advertisers,” said Gillman. “We can do Staten island without doing all of New York city.”

Time Warner Cable www.twcable.com
Comcast Corp. www.comcast.com

Share this article: Email, Slashdot, Digg, Del.icio.us, Yahoo!MyWeb, Windows Live Favorites, Furl
Add this article feed to: RSS, My Yahoo, Newsgator, Bloglines