Despite the rapid progress in advanced interactive advertising over cable networks, the U.S. cable industry is not likely to achieve the level of annual ad revenues that it is expecting over the next several years, but likely can double its revenue from current levels by 2015, Pike & Fischer (News - Alert) now concludes.

 

Cable executives have said they hope to increase advertising revenue from approximately $5 billion generated in 2007 to as much as $15 billion a year once they have completed a standardized, cross-operator platform capable of supporting interactive advertising on a national basis. Much of this effort is being pursued through Canoe Ventures, a joint venture involving top cable operators such as Comcast (News - Alert) and Cox Communications. 

 

Cable industry annual ad revenue will not exceed $10 billion before 2015, says Tim McElgunn, Pike & Fischer chief analyst. The recent flap over the privacy implications of mining user browsing data to target ads is but one example of the hurdles such advertising will have to surmount.

 

"Given the immense complexity of first creating such a platform and then using it to disrupt the existing advertising food chain, it will take years and many millions of dollars in capital spending before its impact will be sufficient to allow cable to capture more than a small percentage of total ad spending," McElgunn says.

 

That might provoke some measure of caution in telco circles about the financial return from targeted advertising, even though the concept holds much promise for the mobility segment.