Big question #1: Can AT&T put the pieces in place to compete with Google, Facebook, and Netflix?
Big question #2: Will other networks (their competitors) put differences aside and focus on the common enemy (Google, Facebook, and Netflix)?
Quote from Randall Stephenson — CEO @ AT&T:
“We think we have a couple of years window to stand this up and really make inroads… I have yet to speak to a [chief marketing officer] or an advertiser who says, ‘I wish I could spend more money with Google and Facebook.’ That human being doesn’t exist.”
Flashback #1: What AT&T’s advertising platform will look like
Quote from Brian Lesser- CEO @ AT&T Advertising and Analytics:
“Because we have DirecTV, we are the only company that knows you are watching a big screen in your living room wall and you have a small screen in your pocket… With this knowledge, AT&T can then have an icon appear on the TV screen during a show that indicates there’s a mixed-reality experience on your phone. And without ever interrupting the content, consumers would be able to receive a targeted commercial message on their phone.”
Top pay-TV providers:
1) AT&T/DirecTV/Sling — 26.2M
2) Comcast — 21.2M
3) Charter Spectrum — 16.4M
Top mobile providers:
1) Verizon — 151.5M
2) AT&T — 143.8M
Addressable TV homes in U.S.:
1) Total — 60M
2) AT&T/DirecTV/Sling — 15M (25% of total)
If AT&T offers addressable advertising AND owns the networks the following occurs:
1) Ad pricing — A single ad impression increases 192% from 1.2¢ to 3.5¢ due to improved targeting.
2) Inventory — The number of 30s spots available to AT&T increases 600% from 4 to 28 now that they are both the cable provider and content owner.
3) Total impact — AT&T currently makes roughly $0.05 per hour (4 spots x 1.2¢), but that could increase to $0.98 per hour (28 spots x 3.5¢) if they accomplish #1 and #2.