Comcast-NBCU: Madison Ave.'s Wish List

Speed up addressable advertising, fix the network

By Claire Atkinson -- Broadcasting & Cable, 12/3/2009 4:14:33 PM

Comcast-NBCU: Complete Coverage
Madison Avenue is busy weighing the implications of Comcast's acquisition of a majority stake in NBC Universal and some think the combination could deliver some positive results.

CEO of Starcom MediaVest Group Laura Desmond said: "We think this is a seminal deal and signals a change in the media landscape because putting together a distributor with a mass broadcaster unleashes all sorts of advances in TV measurement from the set top box. There are also national and local synergies."

Starcom MediaVest Group has been intimately involved in addressable advertising trials with Comcast in Huntsville, Ala. and in Baltimore, Md.  "We have seen very positive business results from that," said Desmond.  Addressable advertising is the ability to tailor more suitable ad messaging to the consumer.  "The idea of taking some of Comcast's trials in the area of interactivity and bringing that expertise to broadcast television is a very powerful thing." Desmond said addressable advertising had been held back by cable operators' inability to deliver scale. The addition of mass via the broadcast network, "is the very intriguing development." Comcast is also developing interactive applications such as requests for information services.  "The ability to have those interactive applications and gain more content and more channels could be great for advertisers," said Comcast COO Steve Burke on a call with press today, adding that 23 % of the revenue of this new company comes from ad sales.

Rino Scanzoni, chief investment officer at Group M, agrees this deal might also speed the progress of addressable advertising, potentially giving networks the ability to sell the same ad spot numerous times to different clients targeting different subsets of the audience. Scanzoni said: "[The deal] doesn't change how we go to market, where the opportunities are, from my perspective.  This might be good in terms of advancing the pace of addressable advertising."

Harry Keeshan, executive VP of national broadcast at PHD U.S., said: "I think this is going to take a while and though the focus is on cable, we'd like to see more effort on the broadcast side of things. Keeshan thinks the addition of Comcast might help NBC Universal shore up the primetime broadcast line-up. Comcast will take a strong run at rebuilding that."

Scanzoni adds that having Comcast rather than GE the majority owner of NBC Universal could be a good thing since the network may not be so tightly squeezed for efficiencies.  "I think potentially what could happen in the short run, there might be less economic pressure on NBC."  Scanzoni also added that NBC could be the first network to convert to a cable network that involves subscription fees and 24/7 programming, saying "I could see that happening sooner with NBC."

Another potential benefit of the deal for Madison Avenue might be speeded up access to set top box data for better audience measurement, something that Alan Wurtzel, NBC Universal president of research, has been pushing for as part of the Coalition for Innovative Media Measurement. Comcast has the set top box data, there may be a merging to use it for better research.

While Madison Avenue may see upside, the deal will take up to a year to complete and will not be without hurdles. Susan Eid, senior VP of government affairs for DirecTV said in an email statement to B&C today: "We are evaluating the potential effects of this transaction on our company as it certainly creates significant media concentration. For example, in the San Francisco Bay Area, Comcast controls roughly 60 percent of the video market, owns two regional sports networks and, if the deal goes through, will also own the NBC and Telemundo stations there. And that's just one local example. We expect the government will closely scrutinize this deal to protect consumers, choice and competition."