AT&T, Time merger may lead to targeted TV ads

Partnership could mean viewers only see ads for products they’re interested in

Targeting people with individualized TV commercials using cable or satellite boxes has been promoted as the future of television for at least a decade. But the business, known as addressable TV advertising, has remained on the fringes, usually limited to two minutes of local commercial time an hour on cable shows. Now, AT&T and Time Warner are pointing to targeted advertising as a major benefit of their proposed $85-billion (U.S.) ($113 billion Canadian) merger. Jeffrey L. Bewkes, the chief executive of Time Warner, and Randall L. Stephenson, AT&T’s chief executive, highlighted the vast trove of consumer data their combined companies would have in a call with investors on Monday — and its usefulness for both marketers and consumers.

Viewers, with new subscription options, could enjoy fewer interruptions and see ads for “the products you’re interested in, not the ones you don’t need to see,” Bewkes said.

National advertisers would presumably pay more to reach them and have an alternative to spending on Google and Facebook.

Targeted advertising has become commonplace on streaming services such as Hulu or platforms such as YouTube, where, for example, women in their 20s may see ads for birth control, pregnancy tests or certain movie trailers.

Advertisers hope things could potentially move even beyond that on TV, with people seeing ads based on, for instance, their location or individual interests, much like what happens on the Internet.

Still, skepticism over whether the AT&T-Time Warner merger will normalize the practice for traditional TV is rife within the ad industry.

“As to the question of whether this is a new route for advertising and another opportunity for targeted addressable TV advertising, the answer is it’s going to take a significant period of time,” said Martin Sorrell, chief executive of the advertising giant WPP, pointing to the risks around regulation and combining the two companies. “It’s possible, but implementing it is not going to be easy.”

Tailored advertising is a generally accepted part of the Internet experience — consumers see it daily on Facebook or through banner ads. But traditional TV has largely continued to advertise in broad swaths.