BOSTON -- A top Comcast (NASDAQ: CMCSA) executive said that marketers have begun to take a keen interest in getting their advertisements displayed in the company's X1 user guide.
"They've been doing the limbo trying to get ad spots on there," Comcast CTO Tony Werner said here during a keynote event at the INTX show. "I think [Comcast's X1 ad business] is going to go pretty well."
Werner said that advertisers had little interest in Comcast's X1 platform when the company first launched the offering. However, now that Comcast has deployed its X1 to roughly 37 percent of its customer base of around 22.4 million people, he said advertisers are starting to take notice.
Further, Werner said that Comcast's approach to advertising on X1 has started to take shape. "I've warmed up to advertising," he said.
Specifically, Werner said that Comcast's X1 advertisers have to meet the company's specific advertising guidelines and formats so that their ads flow into the rest of the X1 user interface. He also said that Comcast is working to make sure that it is showing ads that are related to the types of content and channels customers like, and that those ads are relevant to viewers.
And Werner said that Comcast is making sure to tailor its own ads to the proper customers: For example, he said the company isn't showing ads for $9.99 per month phone service to those customers who are already paying more than $20 for their phone service.
Werner added that X1 DVR reminder ads are also popular, helping customers remember to record their favorite shows. "That got tremendous use, and really brought the viewership ratings up," Werner said, noting it was especially successful in raising viewership of NBC programming. "I think there is opportunity here starting to emerge."
But, Werner warned, Comcast and other players need to be careful to make ads unobtrusive and relevant. For example, he advised against preventing customers from fast-forwarding through ads, a feature available on some DVRs. "Customers are not going to stick with us if we disable fast forward," he said.
He also said that Comcast worked carefully with its partners on its planned coverage of the Summer Olympics in Rio de Janeiro so that the amount of ads the company shows won't overwhelm viewers.
Steve Shannon, GM of content and services for Roku, agreed that advertising is an important area for the company. Indeed, he said that advertising on Roku's user guide is one of the company's fastest-growing sources of revenue. "We've really kind of gone full tilt on it and it's super popular with advertisers," Shannon said during the same keynote event.
But Shannon too cautioned that ads need to be relevant and helpful. For example, he said that industry players need to make sure that "people without babies aren't getting diaper ads, and that's probably a good thing."
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