Comcast-NBC Uni deal could change ads

Experts say merger may result in new business models

Ad industry executives have talked for years of a future where a marketer could buy a single national TV placement that serves up different ads to individual households depending on the viewing and purchase profiles of those homes. Does the planned Comcast-NBC Universal merger bring this vision any closer to reality?

Executives say the likelihood of an addressable world arriving sometime soon clearly has improved.

"Now that you have a distributor and a content provider sitting on the same side of the table, that could accelerate movement into this area," said Rino Scanzoni, chief investment officer at GroupM, a unit of WPP.

"A portion of the opportunity in addressability is dependent on partnerships between content owners and distributors," agreed Tara Walpert Levy, president of Visible World, a tech company involved in the efforts to deploy interactive and targeted ad delivery systems. "Time will tell, but when you put together two critical pieces of the pie like this, it should make it easier to get (addressability) done on a mass scale."

Heather Way, analyst at market research firm Parks Associates, said the proposed merger reinforces her latest projections: While spending on interactive TV ads will amount to a mere $49 million in 2009, she says, she sees the sector expanding exponentially during the next few years, exceeding $4 billion by 2014 -- assuming the successful rollout of Canoe Ventures' national advanced TV platforms. (Canoe is a consortium of cable operators Comcast, Time Warner Cable, Cablevision, Cox Communications, Charter and Bright House Network.)

By comparison, broadcast TV ad spending will reach $46.5 billion this year, and cable and satellite TV spending combined will total $29.5 billion, according to PricewaterhouseCoopers. By 2013, combined spending is expected to be $73 billion.

Cable operators and tech companies have led efforts to deploy interactive TV delivery systems for the past decade. National scale has been elusive because of the different and incompatible technologies used by competing cable firms and the fact that content
companies like NBCU and distributors like Comcast haven't been able to work out terms for jointly deploying ad-targeting systems.

But if there's a hookup between Comcast, the largest cable operator with more than 23 million subscribers, and NBC Universal, which offers NBC and 10 cable channels, national scale could be a step closer to reality.

Steve Farella, CEO at independent media shop Targetcast, hopes that's the case.

"What I'm looking for in this purchase is a brighter tomorrow because I don't think anybody can fix the linear television model of today," he said.

Scaling advanced TV platforms is critical to the success of the merger, Farella added. "We're looking for Comcast to take (its) technology and the programming from NBC Universal and push really hard on addressability, interactivity and customized messaging," he said, "because that's the stuff that has gotten everybody excited about the Internet."

But Comcast and NBC say they aren't ready to give up on the existing broadcast model. Comcast CEO Brian Roberts said last week that his company and NBC Universal are committed to "restoring" NBC and its related broadcast assets to a healthy, even dominant position. "We're excited by the whole portfolio," he said.
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