Commentary

Continued Consolidation Of TV Industry Means More Focus On Ad Tech

  • by , Featured Contributor, August 15, 2019
The big story this week was Viacom and CBS’s announced plan to merge, reuniting the Viacom cable networks and Paramount studio with CBS Broadcasting, Showtime and the Simon & Schuster book publishing arm under the ViacomCBS moniker. When it closes, it will be just the latest in a string of mega media mergers in the TV & video industry over the past several years, close on the heels of Disney/Fox; Comcast/Sky; AT&T/TimeWarner; and Discovery/Scripps.

The ViacomCBS reunion is likely to follow a game plan well known to industry followers, and not unlike what happened when Comcast bought and integrated NBCUniversal almost 10 years ago. First, we will see consolidation of all back-office functions like finance, strategy, legal and administration. Second, we will see more focus on “cooperation” across the companies in how they acquire content, negotiate distribution deals for programming, attack new strategic markets (think direct-to-consumer streaming) and, ultimately, how they package, price and sell their advertising.

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Within a year, the “cooperation” phase turns into a consolidation phase, with the cooperating teams (from content to sales to ad trafficking) now finding themselves smaller, more integrated and operating across a number of heretofore different business, channels and consumer delivery platforms.

The only real difference that we’ve seen since the Comcast/NBCU playbook nine years ago is that in today’s mergers, everything will happen faster.

So, what does this mean for all of the consolidating ad sales and sales operations teams at the other recent mega media mergers, and for ViacomCBS particularly?

For sure, the distinction between how “broadcast” and “cable” are sold is going away fast. Remember, it was in the merging of NBCU’s broadcast and cable sales groups that NBCU sales chair Linda Yaccarino took over, establishing her leadership across the entire TV industry. In the process, she launched a combined upfront in 2014 and extended it with the  creation and promotion of the open-source CFlight cross-platform measurement metrics over the past two years. Expect ViacomCBS to do the same.

Just as sure, we’ll see even tighter integration and packaging between linear TV ad inventory and ad-supported streaming inventory. There's no question that TV+OTT ad integration and coordination is a big part of the TV industry’s future, and Viacom’s recently acquired Pluto will be a key fulcrum in this market for ViacomCBS.

Advanced advertising is certainly going to play a big part. The new ad revenue and yield being driven by the audience-based selling through Viacom’s Vantage platform — and its potential when scaled across all of the CBS properties — was referenced high up in all the merger coverage.

Clearly, software and technology will play a big part, whether in consolidating broadcast and cable products, planning, measurement and trafficking, or combining sales measurements between linear TV and streaming, or automating audience-based selling across properties, channels and devices,  TV sales teams have pioneered market-leading efforts in fields like research for decades — remember Turner’s Media at the Millennium?

Pioneering in the building, buying and renting of ad technology is relatively new for TV ad sales companies, though many are clearly already jumping in with both feet. Comcast’s purchase of FreeWheel and VisibleWorld, AT&T’s purchase of AppNexis and Altice’s purchase of Audience Partners stand out in recent years.

While I admittedly have an interest in this space (since I and my company have been playing in it for quite a while) it seems clear that the more the TV industry consolidates, the bigger the role ad tech will play in its future.

What do you think?

5 comments about "Continued Consolidation Of TV Industry Means More Focus On Ad Tech".
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  1. Ed Papazian from Media Dynamics Inc, August 15, 2019 at 4:25 p.m.

    Some interesting and, for the most part, likely predictions, Dave. As regards the cross selling of cable and broadcast this has been going on for some time, albeit in small deals and most media plans still segregate the two types of TV content and distribution as they are not considered to offer equal value. Also, if the brands are ever allowed to buy their own time in national TV, the fit between broadcast TV, which is overwhelmingly a middle aged and, especially, an older person's platform, and cable which has lots of content that appeals to younger folks and affluents as well as oldsters, poses a problem. Most brands who are targeting consumers aged 45 or less with better educations, incomes, etc. will find relatively few shows on high CPM broadcast that they want to be in. At the same time, cable's very heavy commercial clutter, relative to broadcast is a negative that can't be ignored. So it's not a given that so-called "advanced" targeting methods will play a big role in national TV cross platform time buying in the near future. Long term---maybe, but only if there are lots of changes on both the buying and selling side.

  2. Claudio Marcus from FreeWheel, August 16, 2019 at 7:08 a.m.

    As usual, Dave's observations are spot on. Another important trend is broader TV ecosystem collaboration that extends beyond even the largest consolidating enterprises. Some notable recent examples include OpenAP, OAR, FreeWheel Markets, and Xandr Community, while NCC represents a long standing and re-energized collaboration between leading MVDPs. The TV ecosystem needs to effectively manage these broader collaborations as they are necessary to streamline execution and deliver greater scale to compete with the digital advertising Goliaths.

  3. Dave Morgan from Simulmedia replied, August 16, 2019 at 12:21 p.m.

    Thanks Claudio and great points about the industry collaboratoins and their importance to enable TV companies to effectively compete with the large digital platforms.

  4. Dave Morgan from Simulmedia replied, August 16, 2019 at 12:22 p.m.

    Thanks Ed. I am totally with you about how important consolidating broadcast and cable will be if all brands are allowed to buy their TV media on their own - you and I will keep wokring to make that a reality some day!

  5. Kenneth Fadner from MediaPost, August 18, 2019 at 6:45 p.m.

    Ken Kurtz: All you've done is make vehement assertions of your own opinions without any proof and called them facts. I've politely stated my opinions and labeled them as opinions and said I am willing to wait and see whether your opinion about gun controls or mine is correct.

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