How Will the AT&T and Time Warner Merger Impact TV Advertising?
AT&T is still working to close its long-awaited merger with Time Warner. While we wait for the ink to dry on this potential deal between two media powerhouses, it’s worth revisiting a topic we wrote about last year: what will the potential impact be for the advertising industry? As Ad Age noted in a recent opinion piece, the size and scale of these two behemoths could have big implications for how TV and digital ads are bought, sold and measured. As the deal moves closer to completion, here are some points for advertisers to keep in mind.
Addressable TV is set to become a big deal
There’s lots of talk about the potential of addressable TV, even though 2017 spending on the format is still relatively modest at $1.2 billion. But the AT&T Time Warner merger could have a significant impact on the scale and opportunity of addressable TV. The vast trove of subscriber data already owned by these two companies could be used to offer more targeted and relevant TV ads to viewers, leading to more effective (and pricey) ad inventory. AT&T’s CFO touched on this at an investor event, noting that they may be able to charge even higher CPMs than usual for such inventory.
Mobile is critical to the TV ad personalization puzzle
Strange as it may sound, mobile phones may be a key component of future TV campaigns. AT&T has access to the user data of millions of phone customers, a priceless asset that could be cross-pollinated with Time Warner to gain greater knowledge of their subscriber’s viewing habits and demographics. As cross-device web habits and multitasking become even more common, a combined knowledge of AT&T and Time Warner’s phone and TV businesses may give them a leg up on their competitors and make ad campaigns more desirable.
TV advertising continues to overlap more with digital
Although some in the ad industry still think of TV and digital ads separately, the AT&T Time Warner deal is just one more sign of their continued convergence. The precision targeting of addressable TV will be combined with a vast network of TV inventory controlled by these two companies. This may lead to all kinds of opportunities for advertisers to get better measurement data and campaign performance. Consider the example of a retailer who buys a TV campaign and uses data from mobile phones to understand if the ad persuaded consumers to shop in store. There are a lot of possibilities here to explore.
The pending AT&T and Time Warner merger is still not a sure thing. But assuming the current agreement is finalized, advertisers interested in TV may soon face a very different advertising landscape. Expect to hear more about this important industry business partnership in the months to come.