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Online Behavioral Targeted Advertising Key Component to Comcast Acquisition of NBC


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Online Behavioral Targeted Advertising Key Component to Comcast Acquisition of NBC

  1. 1. Online Behavioral Targeted Advertising Key Component toComcast Acquisition of NBCAfter over a year of deliberation, The Federal Communications Commission and the JusticeDepartment decided to allow Comcast to buy 51% of NBC Universal from GE. With the recentexplosion of Hulu, Netflix and other online media services, Comcast is doing everything it can tomitigate the obsolescence of its television broadcasting. One of the conditions, however, is thatComcast had to allow rivals to license NBC programming, including its most popular shows (TheOffice, 30 Rock, etc.). This expands the network of companies that can generate online adrevenue off NBC programming.There is a change in the paradigm occurring. Networks used to make shows available online asan added benefit, but now with advances in broadband technology, consumer appetite andadvertising delivery systems – online media is not only a requirement, but is starting to trumpcable broadcast programming in many areas. With services like Hulu offering its premiumpackage at only $8 dollars a month, “cutting the cord” on the $100/month cable package islooking a lot more attractive. Additionally, more progressive outlets for à la carte stylepurchasing of media entertainment, such as Apple and Amazon, are likely experiencing acompetitive threat from the new “free-to-consumer” or “low-cost” alternatives.What is in it for the companies? How can you “give away” online media entertainment at such alow price? Improvements in advertising delivery systems have allowed for significantly moretargeted ads to be placed. Gone are the days where people were boxed only by demographicdata. Now companies use cookies, survey information and even your social media profile to putthe right ads in front of you! The more “targeted” an ad can be, the more an advertiser is willingto pay a publisher for that space. Advances in behavioral targeting have enabled ads to changecontent and placement based on consumer interests and where they are in the buying cycle.Let me walk you through an example of how behavioral targeting is driving this movement:You go into an electronics retailer and sign up for the store’s “free” consumer card (e.g. BestBuy Rewards Zone) to earn discounts.They record your purchasing information and send you e-mails to let you know about differentofferings, your total savings, or even just to confirm your membership, etc.You view one of the e-mails and a cookie is placed on your computer. This cookie identifies allyour purchasing information and a profile for you, including demographic information.You have a history of buying video games for your PlayStation 2.You watch your favorite show on Hulu, from home, at your convenience, for free (or for a smallmonthly fee).You see ads for PlayStation 3 on Hulu. While you are waiting for your TV show to continue, youclick on the PlayStation 3 ad on Hulu.You are now identified as an interested buyer for PlayStation 3 and see ads for the PlayStation3 wherever you go on the web (maybe even inside your e-mail).You finally buy a PlayStation 3.Now on Hulu and all over the web you see advertisements for games and accessories for thePlayStation 3. The games are the types of games you liked to buy for the PlayStation 2. 1/2
  2. 2. Coincidence…definitely not.Scary? A little. Profitable for publishers of websites and media entertainment? Absolutely. The best part is, consumers are lining up to take part in the “free entertainment”. While Comcast may have acquired NBC to avoid obsolescence and remain on the cutting edge, it would be foolish to think the behavioral targeting opportunities isn’t a core driver here. Where else can you imagine a business paying billions of dollars to take an eventual subscription revenue cut from $100 down to $8 per month??? The value in online entertainment for businesses is behavioral targeting. Sean is the founder and a principal of Jaroop, a leading provider of online targeted advertising solutions. He specializes in helping companies leverage the web to build profitable businesses. Sean focuses on evaluating client situations and opportunities as if he were a partner in the client’s business. This approach allows Sean to make recommendations that align with the company’s strategy and are appropriate given the firm’s values and customer base. Sean can be contacted through Jaroop’s website or at 860-357-2060. cast-acquisition-of-nbc/ 2/2Powered by TCPDF (