Last week’s big TV news was that Canoe Ventures, the company jointly founded by the major cable MSOs (Comcast, Cox, Charter, Cablevision, Time Warner, and Bright House), has decided to abandon its interactive TV (iTV) business and focus its efforts on enabling targeted advertising in video-on-demand (VoD) programming. (See Advertising Age story here.) Departing CEO Kathy Timko was cited as saying that the shuttering of the business was “the result of what the marketplace told us,” but marketers have long demanded that their TV ads be more interactive and engaging. What happened?

I would argue that marketer demand for Canoe’s request-for-information (RFI) interactive ads, though never incredibly high, was the victim of not only the difficulties of getting large cable companies to work on a joint end product but also the shift in consumer behavior to media multitasking and an explosion of second-screen experiences. Since 2008, there have been a number of trends that would suggest multitasking would negatively affect Canoe’s RFI ads:

• TV multitasking, particularly with the rise of tablet, is becoming the new normal. We recently reported on the current state of multitasking, that 58% of US consumers multitask with a tablet, smartphone, or laptop while they are watching TV, with the younger Gen X and Y approaching nearly 75% (client access required). With US smartphone penetration up to 48% as of this week and the staggering increase in social and second-screen engagement during this year’s Super Bowl, I think that it’s safe to assume that smartphones and tablets will become the dominant medium for consumers to interact with marketers and brands while they are watching TV.
• Smartphones are far more powerful than remotes. New mobile technology companies like IntoNow, WiOffer, Shazam, and Viggle allow consumers to request coupons and samples, opt in for future communications, and share marketer content with their social network. Canoe’s product relied on consumers using their outdated TV remote controls and clicking a button to request that something be sent to them via snail mail or interrupting their TV shows to navigate to an interactive showcase on another channel. The overall level of engagement possible with second-screen applications without disrupting viewers' TV experiences far outdoes that of Canoe and can all be done on devices that are already in the willing hands of TV watchers.
• Lower technological barriers exist to scale nationally. The back-end system of TV is a patchwork of cable operators and networks. Although Canoe achieved some success in marrying these systems together for a broad national audience, the increased complexity, time, and expense of building and executing a basic interactive campaign across this network proved too costly. In contrast, second-screen mobile applications allow marketers to circumvent the entire back-end cable system, reach audience members on a national scale regardless of what cable zone they are in, and connect with consumers on a platform that can easily be connected to marketers’ websites and email databases.

Second-screen and synchronized TV-plus-mobile advertising is still a pretty nascent space that is very fragmented across a number of platforms (see Shazam, WiOffer, Miso, Viggle, SocialGuide, and IntoNow, to name a few), but many forward-looking marketers like PepsiCo, Pillsbury, and Sephora are betting on companion devices and screens as an important vehicle to bring their TV marketing campaigns to life and engage viewers. 

 Why do you think that marketers weren’t interested in Canoe’s RFI products? We’d love to hear your thoughts below or in The Forrester Community For CMO & Marketing Leadership Professionals.