Cox, McCann in iTV Ad Deal

Cox Communications and media buyer Universal McCann will work together in one of the first major interactive TV media deals between a cable operator and an ad agency.

The alliance with Universal McCann, the media unit of Interpublic’s McCann-Erickson WorldGroup, aims to sew up a process for distributing advertising to emerging interactive television platforms.

Specifically, the two companies say they’re looking first to tackle advertising-supported video-on-demand. Next month, Atlanta-based Cox plans to begin trials of a free VOD service to digital cable subscribers in the San Diego, Calif. market.

Financial terms were not disclosed.

Cox’s new service, dubbed FreeZone, is expected to include sports programming, celebrity interviews and independent films, and will be supported by long-format, infomercial-type ads and sponsorships. According to insiders, a number of local San Diego advertisers have bought into the arrangement. Now, through the deal with Universal McCann, the client roster will include Coca-Cola and Sony’s Epic Records, both of which have committed to running ads on FreeZone.

Cox, the nation’s fifth-largest cable television provider, also operates video-on-demand services in Virginia and Arizona. Technology partners in the effort include video server Concurrent Computer Corporation and N2 Broadband, handling secure video delivery.

Theoretically, advertisers stand to benefit by being able to measure how many times VOD content is requested through the technology, while Cox stands to boost its advertising sales — which currently accounts for about 5 percent of the company’s revenue.

“Clearly, we are at a crossroads in the history of advertising supported television,” said Billy Farina, vice president of advertising sales for CableRep Advertising, Cox’s advertising division. “Advertisers and those who advise them are looking for new and innovative ways to get their messages across. We are proud to pioneer advertising models in the VOD space and in other new media that speak directly to this need.”

The partners also said they’re eager to study subscribers’ interaction with ads being delivered in conjunction with on-demand entertainment content.

“Our collaborative alliance with Cox provides [Universal McCann] and its clients with a living laboratory that will enable us to glean valuable insight into consumer reaction to the evolving on-demand and interactive television universe,” said Mitch Oscar, senior vice president and director of Universal McCann’s UM Futures division, which focuses on emerging television technology.

Universal McCann and its immediate parent, McCann-Erickson, have been experimenting with interactive TV for some time. The agency’s UM Interactive and UM Futures divisions — the latter of which spawned the deal with Cox — have each dabbled in producing ads for emerging TV formats for advertisers including Coke and Gillette — though never in a full-fledged media deal with a cable operator.

Last year, Interpublic Group launched an effort it called “Covered Bridges,” in conjunction with Liberty Livewire, a post-production firm. The agency tapped Kathleen Mulhern, an executive with UM Ventures, to oversee the effort.