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Time Warner Cable Thinking TV Ad Auction

By: David Utter

Once Time Warner spins off its Cable division, the cable company may offer advertising spots placed within on-demand programming through an auction process.

Time Warner (TWX) has learned Zen and the art of advertising from its billion-dollar partner, Google (GOOG). When its cable division becomes a standalone company, it could use techniques to provide advertisers with a way to place their ads on the TV screen.

Similar to Google's approach to online advertising, Time Warner Cable (TWC) would auction off placement on channels related to vertical industries, like automotive or home improvement. Advertisers would bid on placement, with the highest bidders winning the spots available.

News of the prospective ad auction made the rounds in a Reuters report:

"We can start doing what Google does--auctioning off spots," Time Warner Cable Chief Executive Glenn Britt told Reuters in an interview at the cable industry's annual convention in Atlanta.

"We have the ability, using our set tops and new software we're putting in, to begin targeting advertising," Britt said at the show sponsored by the National Cable and Telecommunications Association. "We're actively looking at this."

Part of the blockbuster deal Google made with Time Warner in December 2005 included sharing knowledge on advertising. With Time Warner Cable (TWC) comparing its proposed TV ad auction to AdWords, maybe that was part of the knowledge-share.

TWC has a distinct advantage through the voluminous database of customer information it has collected from subscribers. That should permit the company to best deliver an advertiser's message to its most desired demographic.

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