Market Overview

Targeted Ads Are Coming To TV, And The Kings Of Cable Are Gearing Up For Long-Term Gains

Targeted Ads Are Coming To TV, And The Kings Of Cable Are Gearing Up For Long-Term Gains
Related CMCSA
Pay-TV Subscriber Loss Rises In Q3, Cord Cutting Still A Woe
45 Biggest Movers From Friday
ProSiebenSat.1 higher as CEO exit fuels acquisition hopes (Seeking Alpha)
Related FB
Facebook Launches Creator App, Eyes More Video Content
Your Tech ETF Could Lose Some Of Its FANGs
Don't Be Fooled by GoPro's Temporary Performance (GuruFocus)

Credit Suisse analyst Omar Sheikh’s recent meetings with companies in the television advertising space — Simulmedia, Clypd and Matter More Media — reinforced his long-term thesis for the industry: “[P]otentially game-changing” developments in linear TV advertising are in the works.

The thesis is focused on the industry’s development through the next 10+ years, but suggests that domestic ad revenues could faster than what the Street expects, between 12 and 48 percent of current top lines (see Sheikh's track record).

In the near-term though, investors should recognize the growth of digital advertising platforms — such as Facebook Inc (NASDAQ: FB) and Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) — which continue to cut deeply into U.S. TV advertising.

4 Takeaways

Following the meetings, Sheikh came away with four key ideas concerning the future of TV advertising.

First, advertiser concern over digital ads is at a tipping point. Many companies are wary of fraud, transparency and brand safety issues.

The TV industry hopes to capitalize on this concern by targeting its advertising products.

Second, several platforms including Simulmedia and Clypd are working to overcome concerns regarding advertiser anonymity. Comcast Corporation (NASDAQ: CMCSA)’s Blockchain Insights Platform has the potential to lead this effort after launching in 2018.

Third, vertically integrated platforms are especially well-positioned to grow in the future through targeted advertisements, much like the digital platforms.

If the AT&T Inc. (NYSE: T)–Time Warner Inc (NYSE: TWX) merger goes through, its combination of consumer data gathering and ad delivering capabilities would provide strong long-term value.

Last, traditional ad agencies and Nielsen N.V. Ordinary Shares (NYSE: NLSN) will see their role diminishing as networks and newer third parties build a new TV advertising system.

Related Links:

For The Content Hungry: Cloud Or Cable?

How Will Charter's 'Sports-Free' Cable Bundle Affect Disney's ESPN?

Latest Ratings for CMCSA

Oct 2017NomuraMaintainsBuy
Oct 2017BarclaysMaintainsOverweight
Aug 2017Argus ResearchMaintainsBuy

View More Analyst Ratings for CMCSA
View the Latest Analyst Ratings

Posted-In: ClypdAnalyst Color News Psychology Analyst Ratings Tech Media General Best of Benzinga


Related Articles (CMCSA + FB)

View Comments and Join the Discussion!

Partner Center