Canoe cuts 120 employees, shuts down interactive advertising business

Canoe Ventures shut down its interactive advertising operation and cut 120 employees, dealing a body blow to the cable industry's efforts to convince media buyers to invest in its advanced advertising platform.

Canoe, which was founded in 2008 by Comcast (Nasdaq: CMCSA), Time Warner Cable (NYSE: TWC), Charter Communications (Nasdaq: CHTR), Cox Communications and Cablevision (NYSE: CVC), said it will shift its focus to providing a platform for dynamic video-on-demand advertising with its 30 remaining staffers. Employees who have been cut include Canoe CEO Kathy Timko and chief product officer Arthur Orduna. Canoe named CTO Joel Hassell its new chief executive.

"To succeed, we must prioritize and focus our resources. Therefore, Canoe will conclude its national interactive TV initiatives. Cable's ITV business will continue through the ad sales teams and video business units at the individual MSOs, as they pursue business opportunities with these capabilities within their own footprints," Hassell said in a prepared statement.

Multichannel News broke news of the Canoe layoffs Wednesday afternoon.

Canoe had focused much of its efforts on marketing the potential of delivering targeted and interactive advertising to millions of cable subscribers, and had been pushing cable operators to upgrade systems to deliver interactive ads and programming that could support EBIF triggers embedded in commercials. It took Canoe three years to deliver RFI (request for more information) ads on national cable networks that encouraged viewers to hit the select or OK button on their remotes to interact with an ad. 

In December, Canoe released a study that found that the most popular RFI ads that have run on national cable networks had achieved an interaction rate of just 1 percent.

Among Canoe's challenges was finding an easy way to explain to cable subscribers how they could use their remotes to interact with TV programming and ads. In 2010, Canoe said it would use SelecTV as a brand for interactive programming. Last year, it dropped SelecTV, and began encouraging programmers to use ExpandTV as a brand for interactive programming, and to place ExpandTV icons on interactive TV overlays.

Canoe and its cable partners have found it challenging to convince media buyers to shift their advertising budgets from the Internet and other media to cable's interactive TV platform. Cable MSOs also face increased competition from second-screen interactive TV applications such as Shazam, which uses automatic content recognition (ACR) technology to deliver interactive ads to TV viewers through mobile phones and tablet computers.

Some cable MSOs such as Cablevision may continue to focus on delivering interactive and targeted advertising without relying on Canoe.

For more:
- see statement from Canoe
- Multichannel News has this story

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