How Cable Companies Are Using Data to Compete With Digital
Telco's are finally using data to better attract advertisers. But is it enough to stave off the trend of ad dollars moving toward digital platforms?
Introduction
One group that most assume to be slow to use data is cable companies. TV advertising, long based on a show’s Nielsen ratings and general demographics of the audience, had not been an area where big and comprehensive data analysis was used. However, this is now changing, as seen in the recent announcement from NCC Media (a jointly owned company between Comcast, Charter Communications, and Cox Communications) that it is creating a new division to deploy and sell unified advertising solutions across the three companies. To do this, he group will use non-personally identifiable data and targeting capabilities to create advanced video advertising products that deliver greater scale, audiences and measurement to meet current and future demands of advertisers.1 These cable giants recognize that they have the ability to mine their subscriber base’s data to the advantage of selling ads.
How Did We Get Here?
The TV landscape has undergone a massive paradigm shift in the last half decade. Cord cutting has become a real threat (~11% of U.S. households have cut the cord), overall linear TV viewership is down, and advertising dollars are increasingly being steered toward digital platforms. On top of these systemic shifts, advertisers were becoming less inclined to spend large amounts of advertising spend on broad shows, with diverse audiences, which were once the crown jewels of the advertising industry. Digital platforms, with their ability to micro target consumers who were most likely to be relevant to various advertisers, were seen as better opportunities. Cable companies had to do something in response.
NCC Media’s Advanced Advertising Solutions
Through NCC Media, the biggest telco’s recognized that they needed to get better to stay relevant with advertisers. Specifically, NCC will now sell data-driven ad products, creating unified ad offerings and measurement tools that leverage “non-personally identifiable data and targeting capabilities.”2 The group is focused on building solutions that deliver audiences across linear, digital, and video-on-demand platforms based on age and gender. In a fractured cable landscape, this creates scale and the ability to for advertisers to sell across platforms, thus uniting what once were different ad channels backed by a more targeted approach. This is especially a direct response to ad-based OTT players, who for years have been touting their viewership data as an advantage over cable. Leveling the playing field, and providing an even larger audience that other OTT competitors, these cable companies can charge higher CPM’s than before.
Noticeably absent from NCC media is Time Warner Cable. TWC unveiled its own data-driven ad sales product in 2016, known as Ads Everywhere, which claimed to allow advertisers to buy campaigns at the household level.3 While this is similar in tone to NCC’s products, it lacks the large scale and data sharing of NCC, whose footprint is much larger than that of TWC. In addition, NCC hopes to go deeper than a household level, eventually selling against individuals.
The Future
Cable has lagged behind its digital-first competitors in using consumer data to better create and capture value in the ad space. As data privacy issues come to forefront, cable companies will have to be cognizant of how they collect and share user data to their profit. In addition, the ad space continues to evolve in its sophistication and targeting, with interactivity and shorter advertising times seen as the next hot button issues that cable companies will need to get smarter at in order to satisfy advertisers. As cable companies get smarter and accumulate more data, they will have to continuously create new products that allow advertisers to execute on this information. Staying nimble, something big cable is not known for, will have to become the new norm in order to continue to signal to advertisers that their money should still be spent in the world of TV.
3 https://www.multichannel.com/news/twc-media-launches-household-based-ad-targeting-403200