Facebook wants TV’s ad money.
The seemingly best way to get at those dollars is to actually have TV ad space to sell advertisers.
Yet right now, Facebook is betwixt and between the tube, putting it nowhere in TV advertisers’ eyes.
So it’s time to actually get on TV – or move on. And that starts with going way over the top.
As in, Facebook needs to buy Roku, or buy a TV manufacturer.
Or just forget about it.
As Digiday’s Tim Peterson reported a few weeks ago, Facebook recently shut down its initiative to sell OTT ad inventory for various mid-sized smart TV apps using its data.
You could be forgiven if you thought that this unit had already gone away a while ago, given its lack of big partnerships, traction or profile.
It seems that major TV networks don’t want to invite Facebook in to help sell the most lucrative ad medium on the planet any time soon.
Meanwhile, Facebook’s other shot at TV money, Facebook Watch, is far from a finished product (it lacks a clear programming strategy, vision, and promotion, for starters). But after an erratic first few years, Business Insider’s Lauren Johnson reports that Facebook appears to be settling in on YouTube-like quality content as a means to get at TV money.
This could work – over a long period of time. Just ask YouTube how long it’s taken to make real headway with TV marketers (and that was before a string of brand safety disasters).
Currently, TV ads are still largely funded by a different set of advertisers and budgets than those that fuel web video. And therefore, that best shot at getting at those budgets is to give them what they want: TV ads.
To that end, helping sell ads on connected TV devices was the right idea for Facebook, but the approach was flawed.
That’s why buying Roku, and its 22 million registered user install base and well-established ad tech infrastructure, is the perfect move for Facebook right now. Roku has had a rocky year in the public markets, and could be an easy $5 to $6 billion purchase for Facebook.
Given what’s been going on with Facebook lately (there’s been some – shall we say, Real News), the company could use two things:
-A distraction (which a big deal could certainly provide)
Roku offers instant growth. Not only are OTT ads a hot market, Facebook could turn on its data for targeting and send their effectiveness – and advertiser demand for them – through the roof. They’d know who you are, where you live, what you like and what you really watch. And TV networks would suddenly have to work with Facebook if they want distribution on Roku.
Plus, buying Roku accomplishes two other things:
-It’s an instant home for Facebook Watch
-It keeps Roku away from Google and Amazon.
Ok, so maybe Facebook doesn’t want to be in the set-top business, or doesn’t like some aspects of Roku’s economics? Another quick gateway into the TV business could be to buy a smart TV maker.
TV manufacturers increasingly play a powerful role in reaching consumers via their interfaces and built-in app environments. Connected TVs would offer Facebook both, with the opportunity to soup up the canvas. Plus, the screen-level data would provide Facebook with powerful TV analytics on millions of US homes, which could be used for program personalization and TV ad attribution across the board.
If you can prove that OTT ads work, you’ll do very well in this business.
Of course, Facebook has Portal, its own hardware bet. So far, despite the cute ads, Portal seems like a bigger screen for FaceTiming or Skyping, which most Americans are already pretty satisfied with. And there’s not a lot of ad or media money in video chat.
There’s lots in TV. And Roku already has a portal into the home.