1. Bob and Rupert and Brian and Sky

So the big story this week is that the machinations of the big TV networks have become more interesting and the plotlines more intricate than the latest Shonda Rhimes epic.

To recap: Brave Comcast CEO Brian Roberts originally wanted to buy those parts of the Fox Networks that wily titan Rupert Murdoch was going to sell off (the TV networks and overseas properties like Sky, a major European and Indian satellite broadcaster.) Bob Iger, heroic CEO of Disney, was also interested and even though Comcast had offered more money, Murdoch worried that the Trump Department of Justice, having put the brakes on the AT&T-Time Warner merger, would not let a Comcast-Fox deal fly either, and thus awarded the prize to Disney even though they'd bid less.

While everyone sat around waiting for the courts to decide on the AT&T/Time Warner case, Comcast let rumors leak that it was still interested in buying Fox and might actually produce a counteroffer.

When nothing came of that, they found another route: it seems that Murdoch only owns 31% of Sky and so the deal with Disney would have required them (either Fox or Disney or both) to acquire the remaining 69%. This, it seems, was far from a slam dunk—Murdoch had tried to acquire all of Sky twice before, and concerns about giving him too much control over the UK media landscape had prevented those deals from going through. The hope was that selling it all to Disney would make those concerns go away.

But last week, in a very unexpected move, Comcast put in a bid for the remaining 69% of Sky, effectively blocking both Disney and Fox.

Why It Matters

The ball is now in Disney’s court. Do they counteroffer and try and beat Comcast’s bid for Sky, likely overpaying in the process? Is the US part of the Fox/Disney deal then dead, or is it still worth it for Disney? (It would seem to be, but that’s hard to tell without being inside Bob Iger’s head.)

There are two other key issues too: while Comcast buying Sky would give it an international outlet for NBCU content, is a satellite provider worth it in 2018? CEO Brian Roberts said that comparing US and European satellite companies was "apples and oranges" but we’re not so sure: Sky has no native broadband capabilities (they piggyback on other carriers) and well, it's satellite. Sky is advanced in many other ways—they have the biggest addressable advertising platform in Europe, but still—it's satellite. 

So there’s that.

There’s also Hulu, now suddenly the child of warring parents. We wondered how the deal with Disney would work out, given that they would own 60% of Hulu and Comcast would own 30%, but figured that Disney and Comcast had worked that out beforehand and that Comcast would work with Disney to boost Hulu, which could then be distributed via Sky in Europe and India to the benefit of both Disney and NBCU.

That seems a less likely outcome now, but you never know—stranger things have happened and both companies could act in the best interest of Hulu and of their own ABC, ESPN and NBCU programming. The meetings to work out all those details just might get a tad frosty.  You never know.

What You Need To Do About It

If you’re David Benioff and D.B. Weiss, then definitely use this as the inspiration for a plot twist on next season’s Game of Thrones. It's right up the Lannister's alley.

If you’re everyone else in the industry, get out the popcorn, put your feet up and see how this plays out. Some things to look at are: (a) is Roberts right in saying that a European satellite company like Sky is different than a US company like Dish? (b) what happens to Hulu when all the dust settles, (c) whether anything happens before the courts issue a final ruling on AT&T/Time Warner.

 

2. P&G Follows Through On Its Promise

Last year, P&G’s CMO Mark Pritchard issued an ultimatum of sorts to the digital ad industry, promising to uncover fraud and waste and make some cuts.

This year, he followed through revealing that P&G, one of the world’s largest advertisers, had cut over $200M from digital budgets after uncovering fraud, bots and the like. What’s more, cutting back on digital, and reallocating the dollars to TV, ecommerce and search resulted in a 10% increase in reach. And Pritchard promised there was more to come.

Why It Matters

Unilever’s Keith Weed has made similar promises and his budget is pretty close to Pritchard’s. What they’re realizing is what the TV industry has been telling them for the past two decades: not all “views” are created equal and just because someone shows you a stat, it doesn’t mean anything actually happened.

Look, we get it: marketing is constantly under pressure to show proof that the dollars it’s spending are working. Digital provided an easy and effective way to finally answer all those eyerolls from the guys in finance.

Rather than point to some study that showed consumers liked your brand better as a result of the last campaign, or deal with falling sales numbers because the retail team didn’t do a good enough job getting shelf space, marketers could whip out spreadsheets showing how well their ads were doing at reaching the exact targets they wanted to reach: people who had bought the brand before, people who had bought the main competitor, people living near a new store where the brand had major shelf space. People who had seen ads for the brand on other apps.

The possibilities were endless and it didn’t matter whether those “views” were three seconds of video with the sound off, or a page that only half loaded as the user moved on to something else. Marketers had beautiful charts showing all the great reach and targeting and metrics they were getting from digital platforms and no one batted an eye. Or challenged whether all those “views” were real.

Until now.

We suspect that as TV develops digital quality metrics and brands start holding digital platforms to stricter standards—e.g. Joe Marchese’s call to use Attention as a unit of currency for advertising—that even more marketers will cut back on their digital ad budgets in favor of things like TV and search. It’s not that digital is always a bad choice. It’s that it’s been painted as a much, much better one than it actually is.

What You Need To Do About It

If you’re an advertiser, be like Mark and Keith. Don’t let those eyerolling weenies in finance pressure you into putting ad dollars in places you know no one sees them. Even if they give you beautiful four color charts. TV will give you charts too, better and prettier charts too, over the next 12 to 36 months. Plus you know that spending on TV is the right thing to do.

If you’re a network or MVPD, get on the stick. You know that your advertisers need justification, that “because it’s TV” doesn’t cut it any more and they need to show that TV is as quantifiable as digital. Be like Linda (Yaccarino, from NBC). Give them all sorts of data points to show off at meetings. They need that sort of thing. Your bottom line will thank you.

And if you're one of those weenies in finance, stop rolling your eyes. If it weren't for you, advertising wouldn't be in this mess.