Along with coffee and rain, Seattle is perhaps best known for high technology-which might explain why cable operator Comcast is optimistic about the next generation of local ad sales tools the company is introducing there.

“We seem to be coming out of [the recession], and on our end [we’re] trying to take advantage of the technology savvyness of the market,” said Rick Stanley, VP and general manager for Comcast Spotlight in Seattle. “This is often a test market for technology-related goods, both for Comcast and in general,” he said.

Many advertising leaders are particularly keen on the notion of addressable advertising, in which ads are delivered to specific neighborhoods. While this kind of advertising is expected to play a weighty role in the future, it’s something Comcast Spotlight, the local cable sales arm of the operator, has just begun to discuss with clients.

To begin that transition this month, Comcast Spotlight in Seattle plans to introduce Adtag, which allows the last five seconds of a spot to be tagged with different information, such as the address of a local advertiser, and Adcopy, which can be used to deliver different marketing messages to different zones. Adtag and Adcopy will be available in 18 of the top 25 Comcast markets by year-end.

Seattle and other local markets are grappling with many of the media and advertising issues that national marketers and networks face, such as how to reach consumers in an increasingly fragmented world that is growing more time-shifted every day. As consumers steadily migrate to greater use of video-on-demand and digital video recorders, local cable ad markets seem well positioned to benefit because of the flexibility delivered by tools such as Adtag and Adcopy.

Comcast serves 87 percent of the cable homes in the Seattle designated market area. Smaller companies such as Millennium Digital Media, Wave Broadband and Click! Network share the other 13 percent.

Mr. Stanley said Seattle’s Comcast Spotlight has also just begun to peddle VOD ads and localized spots on the company’s Web site, Comcast.net. These new tools are still very much in the embryonic stages, Mr. Stanley said. “There has been lots of interest from media agencies and planners, and it’s an active part of their discussions internally,” he said.

Book purveyor Half Price Books tested Adtag in late July and early August, listing the addresses of its eight Seattle-area locations depending on where the ads ran. John Wilson, a spokesperson for the Dallas-based book chain, said while the ads ran for only two weeks, store managers said some customers mentioned they found the store closest to them because of the ads. Mr. Wilson said the chain would use Adtag again when advertising ramps up after the presidential election.

Ultimately, deeper addressability is where Comcast is headed, Mr. Stanley said. “That’s the value of our platform,” he said. “Today it means addressability in terms of geography, because that’s how we can utilize Adtag and Adcopy, and I think there is a general understanding as a digital rollout occurs that ultimately we can target to a household.”

Spot Allocation an Issue

One of the issues that multiple system operators will contend with as the advertising business lurches closer to one-to-one contact with consumers is how to allocate spots, said Alan Schulman, chief creative officer of Brand New World in Alexandria, Va., which develops creative for new and emerging media. As addressability migrates from the laboratory to the marketplace, competition may intensify for the valuable ad inventory, with local cable getting short shrift as national marketers lay claim to the pliable turf, Mr. Schulman said. “I think the [MSOs] are scared that spot avails will end up getting moved over to national advertisers who are trying to hyper-target,” he said.

“It’s a question of how MSOs organize sales staff and inventory to accommodate both. You also want to accommodate dollars moving from national broadcast to spot cable. That becomes the challenge for the MSOs-to figure out what the sweet spot is,” Mr. Schulman said.

As addressability and VOD and broadband ads often necessitate retooling the creative process of crafting commercials, many marketers, especially local businesses, are taking their time to evaluate how to rejigger their marketing messages for the new media. Comcast Spotlight’s Seattle strategy is to roll out the new tools and slowly introduce them, rather than apply a full court press to buy. “The initial wave is going out with the purpose of informing advertisers, not immediately shifting funding,” Mr. Stanley said.

Mr. Stanley said he has high expectations for growth in local cable ad sales in Seattle. He projects a 15 percent increase in ad revenue this year, in part because he expects local cable will capture about 10 percent to 15 percent of the expected $25 million to $35 million in political ad revenue that should flow to Seattle. Broadcasters are expected to snare the lion’s share of that political haul.

This year’s projected rise at Comcast Spotlight in Seattle comes on the heels of a 10 percent rise in local cable ad revenue in 2003 and a 20 percent rise in 2002. The fact that the business grew at all in those years is impressive given the economic downturn at the time. And while Seattle, as a tech hub, was certainly impacted, Mr. Stanley said local cable sales were largely shielded because money, in particular from Shell Oil, was moving away from broadcast and into cable.

In addition, the Seattle market became interconnected at the start of 2003 and now offers insertion across 44 networks rather than 20-plus networks just 21/2 years ago. Those factors all contributed to Comcast Spotlight’s relative strength during the downturn.

With about 92 percent of the Seattle market now interconnected, the additional 8 percent leaves room for growth. Mr. Stanley said he expects both local and national spot cable buying will continue to gain business from broadcasters, which can’t target.

“We have spent the last few years building out our interconnect to a marketwide footprint,” he said. “Within any given market, we make sure we have uniformity in a network offering across all zones.” That means an advertiser can buy a network across nearly the entire market rather than just a certain percentage of homes serviced by one cable operator. “It makes it much simpler to buy,” Mr. Stanley said.

An interconnect also replicates, in most cases, the broadcast designated market area, making sales easier because they can now mirror their competitors’ reach, he said. But Mr. Stanley believes cable will ultimately have an edge over broadcast through addressability.

Comcast Spotlight in Seattle plans to make that targeting even more precise. Currently, the Seattle DMA consists of 16 zones that can be sold in any combination. Over the next two years, that number will grow to 20, with some of the largest zones being split to create more efficiencies.

For instance, the Pierce County zone in Tacoma, Wash., with close to 200,000 customers, will be split in half later this year.