When it comes to OTT and advertising, that nascent sector could used some fueling. The sector represents a confusing mishmash of outlets offering small pieces of the puzzle to advertisers, ranging from pay-TV providers to media companies to TV manufacturers to OTT device companies like Roku–which all have some access to TV app ad inventory. ”It’s confusing and scattered,” said Darcy Bowe, vp, media direct, Starcom MediaVest. “There is no one place with scale.”
For many onlookers, Verizon’s $4.4 billion acquisition of AOL this week echoed another multibillion dollar deal—AOL’s own $162 billion acquisition of Time Warner more than 15 years ago. That deal famously collapsed before the end of the decade. But Verizon’s move may differ because of one salient fact: there’s a ton of money in the video advertising being increasingly watched on mobile devices.
Growing acceptance over the past several years of Rentrak’s TV viewing data as at least a complement to Nielsen’s has resulted in tangible benefits for TV stations and media agencies. But challenges remain for the ratings upstart.
TV station executives — particularly those in small diary-only markets — say the more detailed and immediate Rentrak numbers have improved their selling position, and media agencies say they like Rentrak’s melding of viewership and product purchasing data.
Could Verizon’s $4.4 billion purchase of AOL spark a summer of acquisitions in the ad-tech space? It depends on whom you ask.
Yahoo has reportedly considered making Foursquare a big offer in recent weeks. The Google-purchasing-Twitter chatter has gone on for months and won’t die. Yelp is reportedly entertaining suitors from Yahoo to Google and Amazon, with some analysts speculating that foreign companies Alibaba and Rakuten are in the mix. Even mighty Salesforce.com has found itself the subject of speculation about a Microsoft takeover.
Verizon is the largest wireless service provider in the U.S. with over 108 million retail connections as of the first quarter of 2015. But as the wireless business matures, providing connectivity is increasingly a zero-sum game among the four national carriers — Verizon, AT&T, T-Mobile and Sprint — leading to price wars in pursuit of marketshare and threatening margins.
Verizon’s efforts to find new ways to monetize its user base, such as through advertising, however, have met with mixed results at best. It’s use of undeletable “super cookies” to track its subscribers’ web surfing, and the sale of those data to third-party marketers, led to an outcry among consumers and privacy advocates (and scrutiny from the Federal Communications Commission), which forced Verizon to allow users to opt-out of the program.
Now though, with its $4.4 billion acquisition of AOL, announced Tuesday, Verizon is gaining a portfolio of over 100 million device IDs from consumers who have opted-into direct, content-based subscription relationships with AOL’s media properties. From a data-collecting perspective (to say nothing of the legal and regulatory implications) that’s a much safer starting point than anonymous, surreptitious tracking. But those opt-in content relationships will also provide a foundation for the launch later this year of Verizon’s own opt-in over-the-top video service. Read More »