Commentary

Media, Advertising Future: AT&T, Amazon and NBCU Big Consumer Data Bets

There are media content bumps on the road, but don't worry -- advertising will still be a big deal. Recent moves at the likes of AT&T, Amazon and NBCUniversal might show us that.

AT&T’s DirecTV advertising business is a $2 billion business, growing 26% in the fourth quarter, according to Randall Stephenson, chief executive officer of the company, who spoke in a recent CNBC interview.  

Sure, we can all be dismayed by slowing DirecTV subscribers when it comes to its traditional TV satellite business, and recently, its new virtual pay TV service. But the story doesn't end there.

With regard to declining traditional TV business, “we expected that when we bought DirecTV,” says Stephenson.

But, he adds, DirecTV is still “generating $4 billion of cash flow,” which means a lot of investment by AT&T. For example, “we're investing in an advertising business... [and] as we stand up the SVOD service -- you're going to see significant growth over here.”

To a different degree -- in a related consumer business -- we can see Amazon is also quietly thinking about its ad future. Recent data from BMO Capital Markets estimates $9.21 billion in advertising revenue for the company in 2018, $13.72 billion in 2019, and $18.71 billion in 2020.

Amazon would point to some 100 million regular customers -- under its Prime membership plan -- as a key metric that marketers look to when it comes to connecting messaging with consumer sales. But this is only a piece of its puzzle, representing just 60% of all Amazon U.S. customers.

Not to be outdone, AT&T might point to its 170 million consumer relationships across wireless, video and broadband businesses.

Deep consumer data continues to gain value for advertising growth, Surely, the likes of Walmart and others might show much of the same strength.

All of this is why traditional TV/media companies -- Walt Disney, NBCUniversal, and yes, AT&T's WarnerMedia -- are focused heavily on direct-to-consumer engagement, connections, and ultimately, big-time, ongoing entertainment sales.

This includes advertising-supported video businesses. NBCUniversal is taking this to heart -- focusing on recreating new OTT platforms based on advertising-supported businesses. All this to re-create, in part, a familiar broadcast-like platform, says Steve Burke, chief executive officer of NBCU.

But this new business -- now with TV companies' own granular, growing consumer data -- will hope to do much more for advertisers.

Will that be enough?

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