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BizReport : Advertising archives : May 12, 2017

Expert: What advertisers need to know about potential broadcasting mega-mergers

Just a month ago, Congress voted to repeal a law that kept businesses from selling customer data, not another repeal is in the wings - this one would get rid of the rule that prevented the mega-mergers of TV/broadcasting corporations. What does this mean for brands?

by Kristina Knight

Kristina: There is another possible repeal being talked about, which could allow for the mega-mergers of large TV corporations - what do you think is leading this push?

Greg Portell, Lead Partner, Consumer Practice, A.T. Kearney: Large media companies are under pressure from smaller, more nimble rivals. The result has been extremely fragmented growth across the industry with limited performance improvement for the major players. By allowing mega-mergers, companies would be able to more quickly shift the business economics within their segments. They can improve scale efficiencies in the slow growing areas while prioritizing growth areas. The action is being driven by those corporate interests.

Kristina: What impact might this have on advertisers?

Greg: Advertisers need a way to simplify their marketing operations. The ad world has become too fragmented for all but the best marketers to efficiently execute marketing programs. The result is a mess of wasted money and poor oversight. A consolidated media world may at some point increase ad rates, but that cost would be outweighed by the benefits of more consistent execution and accountability.

Kristina: What about consumers?

Greg: Brand power kills creativity. Mega-media companies would have incentive to push their branded media franchises across their platforms. Consumers can expect to see less innovative content that isn't tied to a franchise.

Kristina: What can be done, from an advertiser standpoint, in the face of these changes?

Greg: Advertisers need to avoid putting anyone between them and their consumers. Ultimately the brands that control the most consumer data are in the best position to act on it. At the same time, those brands can avoid being held captive by the larger, more powerful media outlets.

Tags: A.T. Kearney, advertising, broadcast advertising, broadcasting mega-mergers, FCC rules

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