The proposed AT&T/Time Warner combination is promising two big benefits to the advertising community: Being able to target TV commercials to individual homes and bringing Hollywood-grade content to the small screen.
The combination would marry AT&T’s more than 100 million subscribers across its wireless, broadband and DirecTV properties and Time Warner’s offerings, which include HBO, CNN, TBS, Cartoon Network and Hollywood's biggest television and film studio, Warner Bros.
The bringing together of massive amounts of viewer data with content may finally bring “addressable” or targeted advertising to TV sets. Working like Facebook and targeted banners, ads would be customized to an individual’s location, interests, income, ethnicity, gender or other characteristics. With new subscription options, viewers might see fewer but more relevant ads.
In many cases currently, such addressable ads have been limited to two minutes of local commercial time in each hour. With the scale in the deal, the parties hope to extend addressable ads to a national scale to compete with Google and Facebook.
“When you combine Time Warner’s content with our scale and distribution ... [and] put that with our customer insights and the addressable advertising opportunities that flow from that, we think we build something here that’s really special,” AT&T CEO Randall Stephenson has told analysts.
The other opportunity addresses consumers' preference to view more of their entertainment on their mobile phones and via online streaming rather than on TV or at the movie theater.
Time Warner’s content would get pushed out through AT&T’s mobile network with the arrival of 5G, the next generation of wireless connectivity, expected to bring the speed and capability of broadband internet to smartphones. Similarly, the technology promises relevant ads. The combined companies hope to catch up to where younger consumers are heading while capitalizing on the rapid growth in mobile advertising.
“The future of mobile is video, and the future of video is mobile,” Mr. Stephenson told analysts.
- AT&T Promises Innovation in Advertising With Time Warner Deal – The Wall Street Journal
- What the AT&T and Time Warner Deal Could Mean for Advertising – Advertising Age
- Individualized Ads on TV Could Be One Result of AT&T-Time Warner Merger – The New York Times
- The rise of the small screen is what's driving AT&T's $85.4-billion deal for Time Warner – Los Angeles Times
- Why AT&T's play for Time Warner makes sense – Chicago Tribune
- AT&T Needs the Time Warner Content Factory to Survive – Bloomberg