Comcast NBCU: Ways To Drop-Kick Advertising into Interactive Age

Although it is clearly fixed on preserving the cable lifeline to homes and the proprietary content and data it carries, Comcast should kick advertising and e-commerce into the interactive 21st century as it prepares to assume control of NBCU.

Advertising and e-commerce are likely to be spared restrictive merger conditions imposed by haggling legislators and federal regulators focused more on digital video access.

While advertising is a small portion of overall revenues for Comcast and its giant cable network portfolio, it is a dominant at-risk income stream for NBCU's broadcast network and stations. Using mobile interactive technology will forge new ways to mine broadcasting's blue-chip advertiser-consumer ties.

Consumers are already there, using holiday shopping as a snapshot of the new norm.

Online spending is expected to increase 11% this holiday season, with $9 billion already spent, according to comScore. The National Retail Federation says 80% of consumers will do some of their holiday shopping online. IDC estimates mobile shoppers will account for 28%, or $127 billion, of the overall $447 billion in holiday spending predicted by the National Retail Federation. Amazon, which has been leading the mobile e-commerce charge, said in July its mobile sales had already surpassed $1 billion during the prior 12 months.



Clearly, this explosion of e-commerce revenues is not so much an opportunity for advertising as for interactive mobile marketing and transactions -- which should put it high on the list of Comcast's priorities.

Morgan Stanley Internet guru Mary Meeker recently declared: Advertising as we have known it is "ripe for innovation."

Reconciling the time consumers and money marketers spend in the exploding Internet space, versus television and other traditional media, is an estimated $50 billion global opportunity. Global Internet ad revenues of $54 billion last year chased an estimated 1.2 billion global Internet users, Meeker says. Yet major advertisers continued to stumble their way across Facebook and other social networking platforms in hopes of bringing recession-weary consumers back into the spending fold.

While the overwhelming focus remains on developing interactive paid content and services, billions of ad dollars are gradually drifting from television into fragmented media sectors.

With NBC's prosperous and legacy operations under wing, Comcast will increasingly find itself a Gulliver-like conglomerate struggling with cheaper, more spry disruptive competitors. Meeker points out that Amazon and Netflix already aggressively compete for consumers at the low-end of the cost spectrum, while iPad and Facebook platforms gnaw away at the other.

And where consumers go, advertisers and marketers follow.

There are at least five ways Comcast could use its NBCU-expanded scale and leverage to shake things up. It could jump-start a new wave of interactive marketing and commerce, funded by its newly formed Silicon Valley investment fund, which combines about $750 million earmarked by Comcast and NBCU for online advertising and other start-ups.

*Put Canoe Ventures on steroids, and really see what it can do. The cable industry's lagging interactive advertising effort could use a proactive shove into the future. Its latest snail's pace move was forming partnerships to develop ways for TV viewers to use their remote controls to make purchases.

*Experiment with mobile and transactional marketing leveraged off NBCU's ad ties. A majority of advertisers would welcome ways to be more interactive as an extension of their TV spending. Comcast should make it mandatory, and fun!

*Use as an experimental platform for creating transaction and targeted consumer matches as a new, albeit, nascent revenue stream. It could parlay broadcast and cable network programming, and even films, into formats bookended by digital marketing and commerce.

*Use the combined NBCU-Comcast cable network strength to change the media marketing equation. Why not collect a fee for every targeted consumer connection and transaction marketers gain from network extensions cross-platform?

*Actively partner with Groupon, Facebook and others that can sweep their static cable and broadcast businesses into their innovation machines. No sense trying to reinvent the social network wheel, although Comcast owns Daily Candy.

*Develop apps as a shortcut connection to target consumers. The new NBU-Comcast gets a piece of the action for every app executed and used. It will be spurred by smart phones and tablets, consumers' most-favored screen.

2 comments about "Comcast NBCU: Ways To Drop-Kick Advertising into Interactive Age ".
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  1. Dave Geipel from QWASI, Inc, November 29, 2010 at 3:23 p.m.

    Great set of suggestions Diane. The entire interactive experience we have as consumers today is exciting to watch evolve... and grow up. The consumer is the moving target... and traditional media companies are still wrestling to nail down "interactive" beyond online (now including social and mobile forms of advertising and marketing). While brands still dabble in various new forms of social and mobile media, the advertising channel has become even MORE fragmented. It would really help Comcast to provide Mobile Marketing, Social Media placements, Mobile Commerce... through one sales channel. The challenge still remains: to bring them under one roof. Then provide analytics (I know, don't even get into that in the thread :). But let's face it - even Google hasn't done all that yet... and we'd expect them to take a leadership role in this area too. Bottom Line: It’s going to be an interesting meld next year and the following and I'd expect Comcast / NBCU to come out of this "quiet period" with something new and exciting... Fingers crossed.

  2. Robert Blau from Morgan Stanley Smith Barney, November 29, 2010 at 3:26 p.m.

    Great article...the connection between the web and tv, and especially mobile and tv is so obvious, consumers are already telling networks how to do it...check out they're on to something...

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