AT&T says it wants to build a technology platform the entire TV advertising industry will use. It sees it as a natural move to counter the rise of Google and Facebook.
But TV executives are torn over whether rival media giants will ever be able to collaborate on such an effort.
Some see the timing as perfect, given TV’s fast-eroding ad dominance and the ad industry’s embrace of data and automated ad buying.
Yet others see inherent conflicts leading individual companies to stay in their corners.
Can the TV advertising industry work together to fight off the duopoly?
AT&T’s new ad boss, Brian Lesser, thinks so, but TV insiders are torn.
As Business Insider reported a few weeks ago, AT&T has some bold plans for the TV ad industry. The telecom giant, following its recent acquisitions of Time Warner and AppNexus, wants to build a TV ad hub that is used by the entire industry.
That includes competing cable and satellite companies as well as TV networks that aren’t part of the Turner family.
The vision is to make TV advertising more like a “platform,” à la Google and Facebook, through which advertisers can buy ads across multiple networks using automated software.
Some experts think it’s the perfect time for TV networks to put aside competition and work together, or risk getting buried by digital media. Others see no chance of TV’s blood rivals joining hands anytime soon.
It’s that tension — and whether it can be resolved — that will make or break the success of AT&T’s ambitious initiative.
It’s not clear what exactly AT&T is planning
Does AT&T, armed with AppNexus, simply want to build a TV ad platform that it licenses to loads of TV companies?
Or does it want to build something of a TV ad exchange, where buyers use data and tech to purchase ad space across multiple TV networks all in one shot?
The first option would be tricky but not impossible, insiders say. But option No. 2 is where things get dicey.
Why it will be hard to get the TV industry to work together
For one thing, it’s hard to get any competitors in an industry to work together. And TV has some unique factors at play.
For one, TV has had a terrific business for a long time. It’s still a $70 billion market, despite digital media’s ascendancy. Most TV ads are sold up front through person-to-person negotiations, an old-school sales dynamic that has made everybody money for a long time, even if there’s not a whole lot of transparency into what different advertisers pay for ad space.
Thus, when some TV ad-sales execs hear terms like “programmatic” and “open exchanges,” they think “losing control” and “plummeting prices.”
“An industry platform unifier? Good luck! Fat chance!” said Tim Hanlon, the founder and CEO at The Vertere Group, which consults media companies. Hanlon said other media giants like Comcast would never work with AT&T.
But not everyone feels that way. Marcien Jenckes, the senior vice president and general manager of next-generation IT systems at Comcast, did not dismiss …read more
Source:: Business Insider