What AT&T’s Proposed Merger with Time Warner Tells Us About the Future of Advertising
By Patrick Hanavan |
AT&T’s recently proposed $85 billion merger with media company Time Warner is a sign of what lies ahead for the advertising industry. Should the merger earn approval from government regulators, the new company would reflect a continuing pattern of greater consolidation and increased interconnection between the media, distribution and advertising industries. But beyond the big dollar size of the merger, and the even bigger size of today’s media companies, what does this deal tell us about the future of advertising?
A merger of AT&T and Time Warner would have a big impact on our increasingly cross-screen media environment. Consumer habits already point to a world in which content (and ads) are available on every device at any time. But even as advertisers and publishers have talked about making this content available “everywhere,” the reality is that various technical and copyright barriers still stand in the way. AT&T and Time Warner executives are hoping that the combined company will help remove some of this friction, clearing the way for advertisers to more easily deliver content and follow consumers to any device.
The proposed AT&T and Time Warner merger also points to media’s growing focus on size and scalability and the fact that big, brand advertisers will always be looking for both reach and frequency. In today’s digital environment, where measurement questions still plague digital publishers, making sure advertisers get the audiences they pay for is critical. This merger would follow the lead of previous deals like NBC and Comcast in 2011 and Verizon’s purchase of AOL and Yahoo in 2015 and 2016. What each of these “big and bigger” deals reminds us is that scale matters. The media companies that dominated the 20th century are increasingly bulking themselves up to compete in the 21st century with their new digital competitors, like Facebook and Google, in order to ensure the scale that advertisers have long required.
Last but not least, AT&T and Time Warner are likely a further sign of the future of advertising personalization. While this may seem contrary to the broad reach sought after by large advertisers, media buys are increasingly designed to accomplish both. The growing importance of mobile advertising and mobile video has given advertisers hope of gaining more granular ability to target individual consumers. The huge trove of customer data controlled by these two companies may make it possible for them to offer agencies new ad products and a greater ability to personalize those ads to specific consumer segments in the years to come.
While it will be some time before we know whether the AT&T-Time Warner merger will be approved, one thing seems clear: a bigger cross-screen, and more personalized, advertising industry of the future is already starting to take shape.