Hulu Buys a DSP, and Google Creates a Streaming Device: Philip Inghelbrecht’s Five Predictions for 2020


Philip InghelbrechtThere are few certainties for the year ahead in television. We know that the streaming wars will continue to ramp up, with new offerings from NBCUniversal, WarnerMedia and others set to debut next year. And the US Presidential election, as well as big sporting events like the Summer Olympic Games and Euro 2020 tournament, will give TV revenues a boost. But beyond these things, what should we expect for 2020?

Here Philip Inghelbrecht, Tatari CEO and co-founder, gives his predictions for the year ahead:

#1 – Industry Consolidation

On the consolidation front, we’ll see trends listed below drive a number of significant moves.

Firstly, I think we’ll see Hulu acquire a demand-side platform (DSP). As we’re headed towards more self-serve TV, Hulu ad buys have been surprisingly manual. That’s especially surprising as so much of the Hulu business model behind the scenes has been to try to appeal directly to brands. To make that direct-to-brand approach work, Hulu needs a self-serve buying platform. As Roku purchased DataXu and Xandr acquired Clypd, it’s only a matter of time before Hulu buys a buying platform of its own.

I also think we’ll see cable companies team up for a streaming business. Of all the parties with a lot to lose from the streaming wars, the cable companies – representing TV viewers’ “discretionary spending” amongst the TV networks—may be the most vulnerable. To maintain their position, I expect we’ll see many cable companies joining forces to deliver their own streaming alternatives.

#2 – The democratisation of TV

For most of television’s history, both production and media prices have been sky-high. In recent years, two key factors are driving TV ad costs precipitously downward—levelling the playing field on TV advertising.

Firstly plummeting production costs, made possible by such technology as production agencies are able to make ad creative more cheaply and efficiently than ever.

Secondly we’re seeing lower cost to entry, driven in part by data. For instance instead of paying $100K+ for a national airing of a major sports game, advertisers and their partners can zero in on demographic and airings insights to find the same audience they want to reach via a satellite airing, and at 10 percent of the price. That low-cost inventory was always there, but the data helps cost-conscious advertisers find it at scale.

As recently as a few years ago, experimental “dip your toe in the water” campaigns have cost advertisers in the neighbourhood of the $3-5 million range; today, those campaigns cost closer to $100K. Lower costs will completely change who can successfully run ads on TV. It will no longer be just the ‘fortune-500s’, but now startups and SMBs as well.

#3 – DTCs (by way of their VCs) kill the GRP

Advertisers have long grumbled about the gross rating point (GRP) as it measures audience size, not business impact. That frustration is bound to reach a fever pitch as direct to consumer businesses (DTCs) become an increasingly large segment of TV advertisers.

The DTC’s themselves are notoriously ROI driven. Meanwhile, unlike most traditional TV advertisers, DTCs are heavily venture capital-backed—and VCs are maniacally focused on customer acquisition cost (CAC). That means they’re less ready to suffer major TV investments without a clear line of site into returns.

Together, DTCs and their backers are bound to drive the shift to other metrics – measurement that’s made possible by the new rise in impact-based TV measurement and focus on incremental measurement.

#4 – 2020 Elections are a watershed for programmatic TV

The changes toward programmatic TV are happening against the backdrop of fiercely competitive 2020 elections, in which Kantar predicts that nearly three-quarters of a total anticipated $6 billion will go to television, just from the presidential campaigns alone. Many campaigners who turn to programmatic TV will fare far better than their competition, and TV marketers both within and beyond the political realm will be watching those campaign tactics closely – making programmatic a new staple in the TV advertising playbook.

#5 – Google gets into TV devices

As video becomes increasingly omni-channel while advertisers want in on the new ‘golden age of video’, it seems only natural that Google will want to ride the TV wave. It will look to a device footprint to do so, following the leads of Facebook with Portal and Amazon with the Fire Stick. Google’s device play may include:

An Android TV. Google got into the mobile business by making an attractive deal to device makers: partner with us and take a significant portion of mobile ad revenue. This same model is an easy path toward working with TV OEMs to roll out an Android TV – a move it’s only a matter of time before Google takes.

A Streaming Device. This will likely include either a major or tiny acquisition – as fits Google’s profile of buying the leader (YouTube) or the emerging startup (Android), and simply pushing out competitors in the middle. On the “leader” front, keep an eye out for a potential Google acquisition of Roku.


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