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 contacted last week say the likelihood of an addressable world arriving sometime soon has clearly 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."
According to Heather Way, analyst at Dallas-based market research firm Parks Associates, 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 over 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 six 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 this year, according to PricewaterhouseCoopers. By 2013, the furthest out the company forecasts, combined spending is expected to be $73 billion.
Cable operators and tech companies, including Visible World and Invidi, have led efforts to deploy interactive TV delivery systems for the last 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 Comcast, the largest cable operator with more than 23 million subscribers, and NBC Universal, which offers NBC and 10 cable channels (including Bravo, MSNBC, USA and Syfy) hook up, national scale could be a step closer to reality.
Steve Farella, CEO at New York-based Targetcast, an independent media shop, 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."
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