When Nexstar Media Inc. acquired local TV giant Tribune Media Co. Monday for $4.1 billion – outbidding private equity firm Apollo Global Management, LLC with an all-cash offer – it gained new status as the largest local TV operator in the country.
Nexstar now has the opportunity to reach millions of customers with more sophisticated or experimental ad techniques including addressable TV advertising. And there’s been some traction around getting addressability into local TV channels.
Before Tribune terminated its $3.9 billion agreement with Sinclair Media Co. in August due to legal concerns from the Federal Communications Commission, AdExchanger wondered about the possibilities of addressability, thanks to all that pooled media. Wouldn’t Nexstar have a similar opportunity?
Nexstar has been public about the need to innovate broadcast TV, and it has been acquisitive when it comes to ad tech.
In December 2017, it bought the three-year-old video ad tech startup LKQD Technologies for $90 million in cash to target advertising in local digital markets.
But what about targeting in broadcast TV? Nexstar did not return requests for comment, but the concept is on every broadcaster’s to-do list.
“Every large broadcaster has an effort afoot to figure out how they can get their signal into an addressable framework,” WideOrbit CEO Eric Mathewson told AdExchanger (Nexstar and Tribune are both clients of WideOrbit). “Most of those efforts are fairly nascent. But the shocking truth is that the vast majority of video consumption in minutes is still on broadcast.”
If Nexstar does have addressable ambitions, it will have to clear the same technological hurdles other broadcasters are facing in order to fulfill them. Creating truly addressable TV advertising won’t be as easy as their targeted efforts on digital.
“The primary way that target is going to happen for local broadcasters is through ATSC 3.0,” Mathewson said. ATSC 3.0 is a broadcast standard that allows a broadcaster to put an addressable signal into your device, whatever that device may be.
“If it’s a pad or it’s a panel or it’s a projector or however you view [the broadcaster’s] signal, they can hand you a stream that is unique to you,” Mathewson said.
But work on ATSC 3.0, in development for two years already, is far from complete, according to the ATSC’s official website.
Jacqueline Corbelli, CEO of TV ad tech company BrightLine, also sees a steep hurdle toward addressability, despite Nexstar’s aggregation of local stations.
“Consolidation is happening in this part of the TV ecosystem to counter the market decline that local’s been experiencing,” she told AdExchanger. “I don’t think it offers much that’s additive to addressability in the immediate term, as it’s not at all clear that they have the last mile tech into the home to activate addressable properly.”
Nexstar’s addressable future remains open for speculation. But an ANA/Forrester State of TV and Online Video Survey from earlier this year found 15% of ANA members are already including addressable TV in their plans with another 35% “experimenting” with it.
Addressable TV ad spend is expected to grow to $3.04 billion in 2019, according to analytics site Statista.
This post was syndicated from Ad Exchanger.