The big news in our industry last week was the antitrust lawsuit filed by the Department of Justice and a number of states’ Attorneys General against Google for alleged monopolistic practices in the operation of its advertising technology businesses.

We have all been waiting for it for years. In fact, I enjoyed watching a 

 posted by legendary investment banker (and comedian) Terry Kawaja of LUMA Partners recently on social media of a talk that he gave at a Google event 10 years ago. He led off with jokes about the likely presence of DOJ folks in the back of the room -- since every major digital publisher and advertiser was there, and inevitably tied up with its DoubleClick and other owned and controlled ad-tech platforms.

Most expect that the desired outcome of this week’s lawsuit will be the separation of Google’s ad-tech businesses -- DoubleClick for publishers, Google Ad Exchange marketplace and Google Ad Manager and Google DB 360 digital ad-buying platforms -- so that they can’t cross-subsidize each other and be used in tandem to force advertisers and/or publishers to adopt Google tools and potentially pay anticompetitive rates.

Hanging over everything is the enormous market power of Google’s parent company’s ownership of so many other businesses that could either impact or cross-subsidize its ad-tech businesses, including its offerings in streaming video (YouTube), storage (Google Cloud), email (Gmail), content (Google News), navigation (Waymo), insights (Google Analytics) and many others.

Will an ad-tech breakup actually happen? I don’t know.

When the DOJ went after Microsoft in a similar fashion back in 2001, hoping to force it to break up its personal computer software, business enterprise software and consumer gaming businesses, it won the suit but ended up settling with Microsoft to just change some of its business practices, including unbundling its Explorer Internet browser, which was being bundled in its Windows software.

My sense then was that Microsoft and its shareholders would have been better off with unbundling. Each could have grown differently -- likely faster – and probably could have each been stronger alone than together. Given the fact that Microsoft’s stock price and performance was pretty poor for a long time until Satya Nadella finally took over as CEO in 2014, that sense was probably right.

I think the same for Alphabet today. Sure, there is some strong synergy between its ad tech and other businesses. And its dominant search and YouTube businesses are big parts of that. However, I am convinced that the ad-tech assets are held back as much or more as they are benefited, and that they would be better as a standalone company singularly focused on serving its advertising and publisher customers, separated from all of the internal and sometimes conflicting and compromising Google and Alphabet pressures.

So, if I were Alphabet, I would take a page out of Br'er Rabbit, and not mind so much if I had to break up some of my advertising technology businesses.

 for TV and streaming advertising provides unified access to premium linear and CTV inventory across all networks and publishers. 

An earlier version of this blog was originally published by 

If the Department of Justice's antitrust lawsuit against Alphabet is successful, Google's ad-tech business and its advertising and publisher customers may end up better off.

Will Alphabet Actually Benefit From the DOJ Lawsuit Against Google?

Recently, Microsoft announced it was laying off more than 10,000 of its employees. Two weeks before that, Salesforce announced it would cut 8,000 employees from its roster. That same day, Amazon announced that it would lay off 8,000 employees on top of the 10,000 that it already announced in November. Also in November, Meta (Facebook) announced 11,000 layoffs.

According to tracking site Layoffs.fyi, 122 companies have laid off 37,525 tech workers in the first 18 days of this year. In 2022, 1025 tech companies laid off 154,386 employees.

For those impacted, their families, dependents and communities, this is a terrible situation, and nothing that I write here today is intended to make light of that or present it as anything other tragic.

This happened not just because of softness in the advertising market (which is a primary or significant revenue driver for the majority of today’s tech giants) or supply chain issues. It also happened because, as we all know, many of these companies purposefully over-hired tech talent over the past half dozen years, stockpiling developers, scientists and product managers as much to keep them away from their competitors than because they desperately needed that many people to build against high-priority product roadmaps.

Many of the big tech players were growing fast, running fat profit margins and had stock prices that kept going up and to the right. With the cost of capital practically free, money was everywhere, and cost-conscious fiscal discipline wasn’t the core ethos of how these companies operated.

The tech giants weren’t just keeping these extraordinarily talented and well-trained technologists away from other big tech companies (and little ones too), they were keeping them from the tens of thousands of companies operating businesses that weren’t “technology first,” but needed to embrace technology if there were going to survive and thrive in the onrushing and overwhelming digital future that now confronts them.

These companies operate in more staid, less sexy businesses -- maybe in government, nonprofits, manufacturing, service delivery, food, agriculture, construction, or hospitality, you name it. There's high potential for magic in the mixing of great tech talent wanting to work and make a difference, and tech-needy institutions needing high-quality help.

We saw tens of thousands of recently laid off Internet-trained workers make their way into mainstream companies and organizations in the wake of the dot-com bubble bursting in 2001, transforming many of those companies. I believe we will see the same thing now, but at a much more massive and faster scale. I know that this line of thinking doesn’t provide solace for those whose lives have just been upended, but it should give all of us optimism for the long-term health and vibrancy of our society and institutions.

We have long needed to democratize the haves and the have-nots of technology talent. It will be painful and dislocating for too many who don’t deserve it and did nothing wrong, but it will make a big difference in the end.

Discover what's really behind the thousands of tech industry layoffs in 2023 and how they will impact a huge range of organizations that didn't put technology first in the past.

How Mass Tech Layoffs May Transform Mainstream Companies

I have been working In the “new media'' field for more than three decades. Over those years, there have been four times I’ve seen technology that -- from the moment I saw it -- made clear it would fundamentally change the way we live and work.

The first was the Mosaic browser in 1993, a free browser client that made the World Wide Web a reality and accessible to all. The second was the Nokia 9000 Communicator, a clamshell mobile phone with a full screen, web browser and integrated email service I saw demoed by a Finnish newspaper publisher at a conference in Europe in 1996. This was the first true smartphone, many years before the iPhone.

Also in 1996, a friend showed me a web crawler and search technology for online job listings called Junglee that was both simpler and dramatically more powerful than any “search engine” existing at the time. Junglee was a key inspiration in the founding of Google (Larry Page and Sergey Brin were students/advisees of Junglee’s Stanford CompSci grad student founders), and acquired by Amazon in 1998 as a price-comparison shopper.

It’s been almost 27 years, but I’ve now seen the fourth: 

, the AI-powered chatbot that is taking the tech world by storm, and which caused the CEO of Google last month to declare “Code Red,” telling the entire company that their entire search business is now at risk.

Over the past 24 hours, I’ve asked ChatGPT to draft press releases. In all of ten seconds each to type requests, I’ve had it generate press releases better than we’ve ever written on our own. I’ve had it create pitches, financial analyses of public companies, legally tight privacy policies, executive bios and explainers designed to describe complex technology solutions to eight-year-olds (which was super-cool).

None of the requests took more than dozens of seconds to construct, and none of the outputs took more than 20 or 30 seconds to generate.

At my company's most recent weekly All Hands meeting, I told all of our employees that from that day forward, all of their jobs are going to change through AI bots. Do I think that AI tools will have a bigger impact on how we live and work than the browser, smartphone or search engine?

ChatGPT and other AI bots are revolutionizing the workplace, generating press releases, pitches, financial analysis, and more in just seconds. Companies must adapt to this game-changing technology.

Why ChatGPT's Impact Will Be Bigger Than the Web Browser, Smartphone and Search Engine

Unlike in most years, I was not in Las Vegas in early January to experience the Consumer Electronic Show. I was bummed to miss out on one of my all-time most favorite conferences and exhibitions, and on seeing so many of my friends who were there.

Still, I didn't miss out on the next generation of consumer technologies, because I spent the week of CES in South Korea. My family and I took advantage of the reopening of travel in Asia to spend the better part of three weeks traveling through Japan and Korea.

I have always been impressed with the consumer technology leadership of Japanese and Korean companies, and the breadth and depth of cutting-edge technology usage across their societies. This trip has shown me that Asian tech leadership is only accelerating.

The mobile phone apps to manage immigration and COVID clearances into each of the countries were straightforward and simple to use. And the totally automated entry into the Incheon airport near Seoul was the fastest, easiest and most automated international entry that I have ever made.

Language-translation apps for both spoken and written Japanese and Korean have not only been simplified, but their use has become routine in restaurants, stores and taxis in both the big cities and small villages we visited.

Mobile-enabled point-of-sale tech for ordering and paying at the table in restaurants -- only recently discovered in the U.S. when COVID hit -- has been available in Europe and Latin America for years, but is implemented at the next level in Korea and Japan. It’s not just the IT systems integration that’s impressive, it’s the seamless integration into the culture and operation of restaurants, and into interactions with customers.

In fact, the efficient and smart integration of all the new consumer technologies into daily life here is what strikes me the most. It’s not just about tech as a curiosity, but tech as a time-saver and helper. That element of use was missing at CES. All across the Las Vegas convention halls, you could see the new tech in amazing displays, but you couldn't see them in everyday action. That’s what’s happening in Asia.

Did I miss the massive displays of the latest TVs, gaming devices, AI-driven appliances and electric vehicles? Nope. All I needed to do was go into the Hyundai department store next to the COEX Mall. The home of the future was on display there, just up the escalator on floor 3.


Instead of serving as high-priced objects of curiosity at showcases like CES, the cutting edge in consumer tech is fully integrated into all aspects of daily life in Asia. 

How the Future of Consumer Technology Arrived Early in South Korea and Japan

Yep, it’s that time of year again: Time for some speculation on what 2023 might bring to the world of media, advertising and technology.

The ad recession will last longer than most hope.

 The recent Standard Media Index data  confirmed what most know: We’re in an ad recession, having just experienced the sixth consecutive month of declining ad spend in the U.S.

A number of ad-tech companies will be hurt.

 It’s been coming for a while, and a lot of companies got a reprieve during the pandemic, but stretched bank announcement balances, lack of public or strategic exits, and a dearth of follow-on investors in the industry will finally take its toll on the dozens of ad-tech companies currently fighting to stay afloat. Keep your eyes and ears open for staffing cuts, consolidations and shutdowns.

Programmatic ad-tech soup won’t be much clearer.

 Before the second quarter of 2023 is over, every banner-built digital ad-tech system will have appended the acronym “CTV” and the term “streaming” to their platforms, preceded by the words "purpose-built” -- which, of course, none were or will be. What’s old is new again, as it always seems to be in ad tech.

Netflix will finish the year as a video ad market leader.

 The long-awaited debutante of the video ad industry has had her coming-out cotillion. Expectations for Netflix at this point are enormous and certainly unfair, but by the end of the year, the company will emerge as a real leader in the industry -- not by the financial scale of its business, but by the impact it has on industry standards, go-to-market and thought leadership, much of this owing to having made some great picks in the senior leadership it has installed in its ad business so far.

What else do you think we’ll see in 2023?

From the impact of the recession on ad spending to the prospects for Netflix's ad tier, Simulmedia CEO Dave Morgan looks at four big trends shaping the future of TV and streaming. 

What 2023 Will Bring to Media, Advertising and Technology

Amazon makes a lot of money selling to Prime subscribers and giving them free shipping. It also makes a lot of money selling merchant services to ecommerce companies, and an awful lot of money selling AWS cloud storage services. And it gives away unlimited access to billions of dollars of great movies, series and sports content.

Apple makes a lot of money selling iPhones, iPads and iMacs. It also makes a lot of money taking a piece of the revenue for many of the apps running on its products. And now, every time you buy a new Apple device, your household gets Apple TV+ streaming services for free, which include billions of dollars of great movies, series and sports content.

Ten years ago, a good friend and top investment banker told me that once premium video streaming services were given away en masse as free “premiums” for buying other products or services from big tech companies, the days would be numbered for television and movie companies as we know them. Premium video services, she feared, would become commoditized, like the free toasters that used to be given away when customers opened a banking account.

Her perspective was that those movie and TV companies’ business models were built around the analog media world, where distribution was scarce but attention was plentiful. Broadcast, satellite or cable carriage were monopoly providers of video into consumers’ homes. Putting content on those channels guaranteed big audiences hungry for quality video programming, with big cuts for subscription fees and ad revenue plentiful as a result.

In a digital media world, distribution is no longer scarce. Anyone can deliver a video stream into an Internet household, and many thousands of companies currently do. With so much choice, viewer attention is now scarce. Streaming viewing is fragmented over hundreds of thousands of videos at any given time. No longer will making great video create a profitable revenue stream on its own.

This point really hit home for me when I read a recent 

 piece co-authored by my good friend John Kosner, the longtime head of digital and strategy at ESPN, about the extraordinary disruptive power that Amazon now represents to the world of sports media. Its 

 streamcast is attracting 15 million to 20 million viewers per week (with much younger audiences than the NFL normally attracts) and has spiced up production with tons of cool camera angles and stats. Most importantly, the football streamcast is apparently generating many new Prime subscriptions each week as well.

Is it possible for legacy TV/video companies to survive that kind of world without similar adjacent market subsidies? It will be hard, but these three issues will be critical:

 Legacy video companies need to maximize their revenue from legacy channels like broadcast, cable and satellite. Those channels support hundreds of millions of viewers in the U.S. each day. They're not going away soon; they should be with us for at least another decade.

 Revenues will be hard to sustain, so cost-cutting will have to move faster. Most legacy video companies have a lot of duplicative vertical integration -- they each have their own ad sales, marketing, operations, production teams, etc. They will need to create or participate in cross-company service bureaus to take out these costs and reduce them dramatically for all cooperators. Possibly 50% of a national TV company’s operating costs could be eliminated that way.

Build your own adjacent market subsidies.

 What’s good for the goose is good for the gander. Offering free premium video gives mobile phone and ecommerce companies attractive consumer acquisition economics. Do exclusive deals with their competitors -- or companies like them in categories like financial services or retail -- to build the same kinds of advantages for yourself, just going the other direction.

This won’t be easy for the culture of legacy TV video companies. But those that can execute it well will reap big rewards.

With tech giants like Amazon and Apple essentially giving away access to video content, there are three ways legacy TV can try to win against subsidized streaming.

How Legacy TV Can Compete With Big Tech's Premium Video Services

Back in 2013, Netflix Co-CEO Ted Sarandos famously said that “The goal is to become HBO faster than HBO can become us.”

No matter what you feel about the strides made at HBO Max over the past few years, it’s pretty clear that Netflix achieved Sarandos’ goal. It has become the world’s leading video subscription service and absolutely owns the same kind of premium content cachet that always separated HBO from everyone else.

Except for the very prescient work done at Hulu, most of the large media companies didn’t try to “become Netflix” until probably five years ago, as they started to lose real viewership to the service (and to Amazon Prime Video).

Of course, if these companies were totally transparent, most would admit that what they were really chasing in Netflix was its market cap. Netflix’s stock market valuation grew extraordinarily over that time period, culminating at just a shade under $700 billion.

That market cap number always came up when anyone in the press or at conferences discussed the big streaming launches by the major television and movie companies (HBO Max, Disney+, Paramount+, Discovery+, etc.).

Those media companies were trading on multiples of profits and cash flow -- and all of them wanted to be traded just like Netflix, at an enormous multiple to revenue and subscribers, with scant attention to profit. Of course, the potential that they each might be bought for a comparable multiple by one of the big tech/video players was a big driver as well.

How quickly times have changed. Today, Netflix has a market capitalization of $138 billion. The large TV media companies are each losing billions and billions investing in their platforms, massively cannibalizing their linear TV offerings and cinematic releases to ensure differentiation and focus for their streamers. Their market caps are also each just a fraction of where they were a few years before.

Netflix is now quite profitable, with annualized profits in the $6 billion to $8 billion range -- and, incredibly, has done that with only a single revenue stream: viewer subscriptions. With Netflix's recently launched advertising tier, we can only expect profits to go up if the Hulu model is any guide. Hulu makes more money on viewers who both pay a lower fee and take ads than those who pay premium subscription fees for an ad-free experience.

The shift of strategy at the big media companies from optimizing to being just like Netflix to achieving its stock market multiple to now being more like they used to be -- all about cash flow -- is having wrenching effects on the entire ecosystem.

The strategies of the large TV media companies of the past few years accelerated audience shifts to streaming, which meant that billions of dollars of distribution fees were lost. Now, there is a question of whether billions of dollars of advertising will be lost. For sure, many, many thousands of jobs have been lost, and that is likely to only accelerate.

I do believe that the best TV media companies will not only survive, but will thrive, as they make these shifts. But it won’t be easy, and it won’t be pretty.

 for TV and streaming advertising provides unified access to premium linear and streaming TV inventory across all networks and publishers. 

TV media companies accelerated the audience shifts to streaming, losing billions of dollars in distribution fees in the process. Will billions in ad revenue be lost next?

Why Streaming Media Companies Are Sacrificing Market Cap for Cash Flow

More than 11 years ago, Silicon valley icon Marc Andreessen famously told us that 

Over these past 11 years, Amazon’s AWS (Amazon Web Services) has definitely proven to all of us the enormous advantages of massively scaled, cloud-based delivery of software, relative to those running software in their own hardware or on subscale clouds.

Recently, AWS announced that it is offering 

Yep, two of the biggest drivers in the future of digital advertising and marketing -- analytics and privacy-protecting data matching, both in real time -- will now be just a simple configuration and button-push away for AWS customers.

Much of the world of ad tech has lived on black boxes, opacity and commingled economics with buyers and partners, while enjoying very attractive per-transaction margins (10%-90% -- but generally closer to the upper than lower). The driver? Claims of proprietary algorithms.

For sure, we’ve already seen big cloud services impact many areas of ad tech. Ad serving, creative delivery, hosted analytics, workflow automation and version control have all become simpler and cheaper with cloud delivery. But what happens when everyone can get the best algorithms in the world for almost free? That is where we’re headed.

How will we know that the AWS (or Azure or Google Cloud) ad serving, bidding or attribution algorithms are better? We will see it in campaign results. That will be super-easy for performance ads, and easier and easier for 

 ads, particularly as retail media networks become bigger and bigger players in the media mix.

Will AWS (or massive cloud competitors) eat ad-tech margins overnight? No, it won’t. But I wouldn’t bet against it for very long. And advertising will likely win when that happens. What do you think?

Now that Amazon's AWS is offering turnkey solutions for data clean rooms and analytics, the ad-tech world's profit margins will feel the impact sooner than later.

Will Advertisers Benefit at the Expense of Ad-Tech Thanks to Amazon's AWS?

I don’t talk to anyone who watches ad-supported streaming services regularly who doesn’t complain about how poorly managed ad frequency is. The same ad will be shown over and over during the same show, frequently back to back to back. The same ads all week on the same shows, over and over again.

Sure, legacy TV has issues with frequency sometimes too, particularly if you watch a lot of the same network at the same time all week. But the promise of digital advertising and all its whiz-bang technology was supposed to fix that issue.

So, why do we keep getting hammered with redundant ads?

 The campaign management systems, digital ad-serving systems and sell-side platforms all have technology that can help us execute meaningful frequency caps on creatives and campaigns.

 There are plenty of identity flags (device IDs, IP addresses, viewing pathways), identity tools (matching services, creative IDs, clean rooms, data-management platforms) and predictive probabilistic audience models to dramatically reduce the vast majority of the bad frequency.

 Buyers of campaigns on streaming channels frequently leverage multiple different demand-side platforms, sell-side platforms and owners of access to the same inventory pools (device companies frequently reserve inventory for their own sale on publishers' inventory; agencies frequently receive their own pools of inventory from suppliers to resell to clients) when they execute programmatic campaigns.

If processes and technology are not in place to help everyone understand what ads each person or device has seen, it is vertically impossible to expect that the viewer ad-frequency experience can be managed. If there are three different pathways to the inventory and each operates with a three-per-day frequency cap, the user might very well get the same ad 

 Solving this problem requires cooperation and collaboration from the multiple stakeholders, particularly the publishers, devices, sell-side platforms and buyers. It’s not rocket science, but it will take focus, hard work and time. Solutions to the problem will have to be prioritized.

But what if the broader streaming industry doesn’t solve this?

 Platforms like Google/YouTube and Amazon are making great strides here. You can be sure that, over time, they will make a good user ad experience a competitive advantage for attracting and retaining viewers. And, for sure, Netflix will do it as well.

Are you happy with your ad-frequency experience on streaming channels? Are you ready to be part of the solution?

What's at stake if TV and advertising stakeholders don't solve the issue of poorly managed ad frequency? Only the future of the streaming TV business.

Why Is Ad Frequency Such a Huge Problem for Streaming TV?

The Federal Reserve Board recently approved a fourth consecutive hike of its interest rate by three-quarters of a point, which signals that general consumer inflation is likely to be with us for a while, certainly deep into next year. Taken together with the intense pressures on energy markets from the Russian war in Ukraine, this means we all need to be prepared for some tough sledding ahead.

I’ve run technology businesses in the advertising industry for almost 28 years, so I feel like I have seen this movie before. I suspect that we’re going to face something along the lines of the impact from the dot-com bubble bursting in 2001 and the significant slowdown from 9/11 in 2001.

Advertising is very sensitive to inflation and dramatically slows down with recession. Money spent to acquire new customers tends to be the first money cut when things are tough, and the last added back when things get better.

In 2000 and 2001, I watched literally thousands of companies go out of business. I don’t necessarily expect the same to happen now, but everyone needs to understand that we’ve been living off a 14-year bull market run, with interest rates so low that the cost of capital to companies was almost zero.

. Here's some unsolicited advice to companies for surviving the hard period to come:

. Cash is king. Get it. Keep it. Be super-careful in spending it. Time will only make cash harder to get.

 Assumptions made in 2021 and earlier in 2022 -- particularly about sales, pricing and revenue -- are now wrong for sure. Waste no time redoing and stress-testing those plans and assumptions like you never have before.

 With economic hardship can come opportunity. Find places to win when others are going to lose. Many companies can grow share in tough times. Make sure you’re one of those companies.

 The available talent pool is going to expand significantly. If you are growing, this is your chance to bring in new talent and raise the bar for your entire team. Tough economic times create uncertainty and anxiety for everyone. Make sure your stars know that they're stars.

 I’ve seen enough of these moments to know this one hasn’t really started yet for most in the world of media or ad tech. Yes, I know we’re already seeing tough earnings reports, weak guidance, hiring freezes and muti-thousand layoffs among companies in our sector. It will get worse before it gets better. Don't dawdle.

This part of business is rarely fun, but it’s a time when you can make a real difference. Don’t waste a crisis.

 for TV and streaming advertising can reach your target audiences no matter where they're watching. 

The economic landscape will get worse before it gets better, but there are five big things companies can do to prepare and even thrive during an economic downturn.

How Advertisers and Ad Tech Can Survive the Tough Times Ahead

TV advertising blog with the latest information, news, analysis and trends about linear television, CTV, media buying, measurement, and more.

I have some news to share. After 10 years at the New York Times Company, I am joining Simulmedia as Chief Marketing Officer. I couldn't be more excited about this new adventure. Let me tell you why:

I love TV. Always have. And truth be told, I love the commercials as much as I love the programs. (Well, some of them, at least.) When I was a kid, each morning in elementary school my friends and I spent as much time talking about the ads we saw on TV the night before as we did talking about shows we watched.

Flash forward to today and I see this same phenomenon whenever a great TV campaign ignites social media. Why has this interaction between TV and social persisted throughout time? I believe it is because TV ads make a strong impression, the strongest of any form of advertising. And this interaction is poised to get even stronger. With media consumption on the rise, people are watching more TV than ever before. As a result, according to many analysts, brands are projected to spend record amounts on TV advertising this year.

But there is a paradox: The way we watch TV has changed dramatically in the digital age, with more devices, occasions and program selection than ever before; and yet, the way brands buy TV advertising has remained stubbornly stuck in a paradigm developed before the dawn of digital. The prevailing metric remains the GRP, the prevailing targeting dimensions are restricted demographics, and buyers are far more focused on CPMs than on measuring the business outcomes of their advertising. In digital advertising, where I’ve spent the majority of my professional career, we’ve moved to a more "people-centric" model -- we can target audiences more precisely and we can measure the outcomes of advertising with greater certainty.

So here’s the connection between the exciting changes ahead for TV, and for me: Simulmedia is the leading company -- I dare say the only company -- that has adopted a people-centric model for transacting linear TV. It has the software and the science to find specific audiences, reach those audiences with the right frequency and prove that the buy delivered the desired results. In other words, Simulmedia has invented technology to make to linear TV advertising like digital, only better. Better, because Simulmedia applies digital advertising principles without imposing the digital advertising ecosystem with all of its well-known problems.

It’s a thrilling moment of change for TV, and for me. My passion has always centered on driving innovation and leading change in the media industry. Changing the paradigm by which television is bought and sold is a huge transformational challenge. I couldn't be more excited to join my good friend Dave Morgan and the incredible Simulmedia team on this journey.

The world of who buys and who sells media and marketing services is going to change dramatically over the next five years, and not just because of the growing roles digital companies like Google and Facebook play in the ecosystem. Companies that have historically bought media on behalf of marketers are realizing that to grow their businesses they now need to own core assets that would otherwise be described as media -- while companies that have historically owned and sold media are realizing that to grow their businesses, they now need to deliver full marketing services, not just media.

Whether speaking to investors or industry trade groups, WPP’s Martin Sorrell has been explicit on his vision for the future of his holding company. WPP is investing heavily in three key areas: technology, data and content. Sorrell has said that building market-leading capabilities in these areas is key to retaining and growing WPP’s client base and margins. Interestingly, all these are the areas on which media owners and sellers have staked their businesses. While content is an obvious “media owner” domain, so is technology and data, whether it was printing presses and broadcast facilities, content management systems and ad servers, or subscriber lists and targeting databases.

Perhaps not coincidentally, we’re also seeing media sellers talk about the importance of building marketing service capabilities. Just this week, in announcing a licensing deal with IBM’s Watson, Turner Broadcasting’s Michael Strober, its executive vice president of client strategy and ad Innovation, told The Wall Street Journal: “Over time we are looking to turn ourselves more into a marketing services group than just an advertising sales team.”

What an interesting juxtaposition. While these kinds of moves have happened in the past, we’re clearly hearing about them more these days. Here are some of the reasons why:

Market shift from media outcomes to business outcomes.

 Everyone is waking up to the importance of measuring and valuing advertising not just on media output metrics like GRPs and CPM, but on business outcome metrics like store visits and sales. Both buyers and sellers will have to build expertise in these areas, which means that agencies will need the technology and data to measure and optimize outcomes, and media owners will need marketer relationships to understand advertisers’ ultimate desired outcomes.

 To the owners of technology, data, content and audiences go control of delivering predictable, provable, profitable outcomes for marketers. Both buyers and sellers want that control. Enough said.

 There is not much margin in providing cost-plus services. There can be massive margin in owning valuable technology, data, content and distribution. Both buyers and sellers want -- and need -- to grow their margins if they are to survive and thrive.

 Sorrell used this term years ago relative to WPP’s relationship with Google. In this increasingly complicating and overlapping world of media, marketing and technology, the notion of competing and cooperating with many companies at the same time is becoming the norm, since having more capabilities and greater scale is essential.

 Might agencies be trying to be sellers, and sellers trying to be like agencies, because of their discontent with their current lot in life? Do they believe that the grass is greener on the other side?

I don’t think so. In fact, I think that the moves on both sides of the media market to build full capabilities makes most sense for those companies that not only like their current market position, but want to strengthen and grow it. It’s not about leaving that side behind. It’s just enhancing assets and capabilities to exploit it further.

What do you think? Can media owners and sellers become agencies before agencies become media owners and sellers?

The world of who buys and who sells media and marketing services is going to change dramatically over the next five years.

Can Media Sellers Become Agencies Before the Reverse Happens?

Television’s '16 -'17 Upfront is poised to bear sweeter fruit for national broadcast and cable networks. Less certain is the quality of the produce that marketers will enjoy.

Brand marketers, participating in the Upfront and reacting to the scatter market premiums they’ve endured this season, will look to secure the volume GRPs they need at the prices they can tolerate. When an Upfront aggregates all those marketers seeking price certainty, the result is more buyers demanding greater quantity of impressions. The dismal science of economics teaches us that the expected result is a magnitude price increase for GRPs that bucks the trend of the past few years.

Enthusiasts of traditional media may claim that TV Advertising is back. Considering announcements by the likes of 

 on their packaging new data resources and audience targeting with their more typical content-centric offering, enthusiasts may further claim that TV is better than ever.

And they’re right. TV advertising is better than ever.

But that doesn’t mean that marketers’ plans to unload media budgets into the Upfront is an especially good idea. Committing significant budget in order to secure price certainty bears hidden costs.

The first hidden cost is sacrificed target audience reach from audience fragmentation.

As in years gone by, marketers will make their bets on which content will attract their audiences using a mixture of culture and gut judgment. The sellers will guarantee that for a better CPM they will drive empathy and authenticity through contextual alignment with their programming. Unsurprisingly there will be a few hit shows and lots of great sports programming. But for every show that that doesn’t pan out, marketers’ dollars will be put into more and more make-goods. This will inevitably increase frequency and decrease the intended effective reach.

In order to mitigate the impacts of audience fragmentation during the 2016/17 television season marketers will need to take a close look into the effective reach their upfront dollars amassed historically. The best way to do this is to uncover the amount of frequency versus reach that their guaranteed GRPs generated and for what cost. 

, a free online database of national linear TV campaigns, can help marketers with this task.

The second hidden cost is the foregone opportunity to own the change of how TV ads are valued and measured.

Now that data-driven television advertising directly measures TV’s impact on sales, marketers can measure the return on ad spend that Upfront pricing has versus Scatter pricing. Many marketers will be surprised to learn that what might seem to be a lower Upfront CPM is actually not driving as much unique reach, or sales, as a Scatter CPM due to the bundled nature of inventory packaging.

Savvy Upfront sellers will do just enough to appease returning marketers on these hidden costs and to assert that the data innovations they’ve bundled with their content-centric sale represent the solution marketers seek. Upfront inventory packaging will be “premium” content led and then packaged with “non-premium” programming that will fill in the GRP goals.

Scatter inventory, on the other hand, will be data-driven and business outcome-focused. It will be packaged to satisfy all stages of the funnel – from awareness to consideration and conversions to sales. It will be sold based on audience data beyond the demo and will be measured on more digital-like metrics such as cost per unique reach, cost per conversion and return on ad spend. This will clarify, and in most cases justify, any potential increases in CPM pricing by measuring its impact on what the marketer is truly interested in – business outcomes.

The need to make TV dollars work harder is more important now than ever. With the amount of fraudulent and robotic activity that is prevalent within the digital advertising ecosystem, marketers’ effective reach is decreasing while their effective costs are increasing.

In a world where audience attention is harder to capture and competition within a category is getting more intense, television advertising will continue to demonstrate its capacity to be efficient and effective. Thanks to better data and more transparency marketers are in a strong position to leverage the past to change the future, not just make bets on it.

TV advertising is better than ever.  But that doesn’t mean that marketers’ plans to plough media budgets into the Upfront is an especially good idea.  Committing significant budget to the end of securing price certainty bears hidden costs, and the need to make TV dollars work harder is more important now than ever.

Why Scatter Is a Safer Bet Than the Upfront

After 10 years at the New York Times Company, I am joining Simulmedia as Chief Marketing Officer. I couldn't be more excited about this new adventure.

Change is Exciting... For TV, and For Me