What might the AT&T/Time Warner merger mean for retail?
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
DISCUSSION QUESTIONS: Do you think the proposed AT&T/Time Warner merger offers more potential to exploit the mobile opportunity or to allow for more targeted TV advertising? Where do you see the biggest potential benefit for brand marketers and retailers?
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5 Comments on "What might the AT&T/Time Warner merger mean for retail?"
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President, Max Goldberg & Associates
I don’t see this merger providing significant benefits to consumers or retailers. For consumers it may mean higher prices for Internet access. For retailers, it means another giant media company, which means less competition, which means higher advertising rates.
Principal, Cathy Hotka & Associates
The purpose of the merger is to marry content with delivery, so the end result will be more targeted advertising. The question is whether customers will like this or not. Search for a bath vanity online and watch it follow you around for weeks afterward … when does “targeted” become “creepy?”
Managing Director, StoreStream Metrics, LLC
AT&T will definitely leverage its delivery platform and retail footprint to monetize Time Warner’s massive content library in ways we haven’t yet imagined! Any medium or device that can receive and play content of any type will be leveraged to create new revenue streams — advertising, subscriptions, pay-per-view/listen, downloads, you name it. They will leverage every opportunity to hook consumers into long-term revenue streams.
Strategy Architect – Digital Place-based Media
Assigning benefits to different stakeholders is a one-martini lunch for spin doctors on this one. Both firms and their suppliers can accelerate revenue harvest while Wall Street and Madison Avenue gain their pound of flesh. Consumers pay.
President, Second To None
Though AT&T/Time Warner are touting the fantastic synergies this will bring to consumers, it first and foremost will limit consumer choice in the marketplace and likely result in higher service and package fees. Given AT&T is driving this deal, you have to believe the play will foremost be about the upside potential around mobile … streaming content and targeted/personalized advertising. The combined entity would clearly have such massive scale and depth of resources to go after advertising dollars currently captured by Google and Facebook.