Sinclair Broadcasting’s planned acquisition of Tribune Media Co. for $3.9 billion is expected to change the face of the addressable TV market and significantly expand the way local and national TV inventory are bought together.
In addition to Tribune’s 42 local stations in 33 markets, many of which are big Fox and CW affiliates, Sinclair also gets a sizable stake in national inventory like Tribune’s Food Network.
AdExchanger asked four addressable TV experts the following question:
What are the implications for TV buyers of the Sinclair-Tribune merger?
Click below or scroll down for more.
- Lorne Brown, president, SintecMedia
- Ben Tatta, co-founder and president, 605 Group
- Eric Mathewson, CEO, WideOrbit
- Nick Troiano, CEO, Cross MediaWorks
A Tribune-Sinclair deal opens up a lot of inventory. The key thing with this deal is it helps [Tribune-Sinclair] to deliver what they promised.
For instance, if you don’t deliver on an audience or an addressable deal in TV, then the agency loses commission and the network has to issue a makegood. Once a merger of this size occurs, these companies tool up. Will it look like Facebook’s buying portal right away? No. But it will be meaningful for buyers because it will be professionally produced content with sound and that is a legitimate threat that has the opportunity to begin pulling those [digital] dollars away [from the duopoly of Facebook and Google].
It obviously provides a significant amount of scale from an advertiser’s perspective both for hyperlocal targeting as well as national, through one supplier. And then with more of a migration to an IP-based signal (ATSC 3.0), it allows for more advanced work to be done with addressable and data collection.
Even though addressable has scale north of 40 million households, it’s almost entirely focused on the two minutes of local time distributed through the cable systems. The cable systems benefited big time because they were able to monetize locally, but national avails were not enabled. For the first time, there are national broadcasters who can sell addressable on a national basis versus rolling everything up locally. What that means is more inventory instead of just two minutes per hour.
That brings more inventory and options in terms of tapping into different audience segments and networks. Historically, traditional measurement systems have not been great at measuring local and regional networks because their sample is so small, so I think the other macro benefit of this is that the networks can collect the data themselves with an IP-based signal and have more data about what their viewership is.
If the network is too small to measure at the local level, it’s called a zero sell and almost impossible to sell if you’re not getting a Nielsen measurement on it. Whereas now they’ll have their own data to improve the accuracy of measurement.
The merger will increase the momentum for advanced TV buying and selling. Larger pools of TV inventory will be more attractive to agencies as they become available for purchase programmatically. Combining these pools with first-party data will increase the value of the underlying TV programming.
Sinclair and Tribune are leaders in bringing their inventory online in programmatic TV platforms, and they have already started to have success reaching new advertisers this way. I expect the importance of this channel to grow as transactions through programmatic TV platforms become a greater share of the overall market.
Sinclair and Tribune are both well-run station groups that have put a lot of effort into optimizing their operations, so ad buyers should expect no major operational changes in the short term. Over time, I expect Sinclair will continue to optimize its business and borrow best practices from Tribune as its digests its operations.
Today, addressable TV inventory sits with the MVPDs and is inserted within cable programming. The Sinclair–Tribune merger would take local broadcast inventory and make it available for addressable TV advertising. Only now, if the merger is approved the new combined company would have incredible scale in reaching targeted audiences. It’s a win/win – better reach of a target audience, since they can insert advertising on broadcast TV and increased scale.
With added scale and investment in addressable TV advertising – it will only help advertisers reach their target audience efficiently. Also, with the massive influx of added addressable TV inventory – TV is no longer an awareness play, but a real viable competitor to digital. In that, TV can and will be used to target specific audiences and drive them to a specific action. Whether it is to buy a new pair of shoes or a luxury-brand vehicle.
This merger will also encourage the industry – brands and agencies – to invest in addressable TV advertising technology and push advertisers to make this a meaningful part of their media ad spend – no longer test budgets.
Interviews edited for clarity and length.