Wall St. Speaks Out on C-7, Programmatic, OTT and More

Wible39s Weekly C7 Programmatic OTT and More JanneyMediaEntertainmentUpfront Updates amp8211 C7 is making inroads as the currency for advertising deals as media buyer GroupM is striking agreements with broadcaster on a C7 basis during this upfront It is unclear whether a higher C7 rating vs C3 will translate into significant benefits for networks as we believe advertisers may adjust CPMs to partially offset the ratings increase to maintain their ROI We are somewhat concerned about the tepid 48 upfront CPM increases which is less than prior years per recent press reports while management commentary on the ad environment including scatter has not been positive either A standout is advertising for the 2015 Super Bowl on NBC which is reportedly seeing a 125 increase in the price per 30second spot to 45 million NBC ratings recovery and upfront CPMs suggest they are likely to post better ad growth ex Olympics than the other broadcast competitorsISP Shame amp8211 OTT providers are using rankings to focus attention on the role of broadband providers play in delivering a quality streaming service GOOG and NFLX are now ranking ISPs on video qualityspeed and the latter has even resorted to calling out specific providers eg VZ to their customers in realtime as the reason for buffering or other quality issues GOOG has gone as far as to create a new web module that allows consumers to benchmark their local ISP competition This is one small part of a bigger net neutrality debate as the online companies vigorously oppose any efforts by ISPsMVPDs to discriminate traffic or to charge publishers for quality of serviceProgrammatic Video Advertising amp8211 According to comScore US video ad networks generated 428 billion desktop ad views in 1Q14 119 YOY This compares to an 85 increase in ad minutes and a 39 increase in audience suggesting that ad loads are increasing while ad length is declining Growth is benefiting from increased demand for programmatic video ad inventory improved targeting and campaign management tools More granular data and control over targeting demographics and websites is leading some large brand advertisersagencies to increase their spend across ad networks GOOG39s recently announced programmatic video marketplace for premium inventory using its DoubleClick platform brings in yet another player to drive further growthAd Forecast amp8211 US advertising revenues are expected to increase from 206 billion in 2013 to 247 billion by 2018 37 CAGR according to forecasts by PwC TV remains the largest segment and will grow to 777 billion 43 CAGR through 2018 in part driven by online revenues from broadcasters Internet advertising will be closing in at 659 billion by 2018 90 CAGR in part driven by strong mobile and video ad growth Slower growth ad segments include Music 28 Film 24 and Radio 12 while Newspaper is expected to decline 58E3 Catalyst amp8211 E3 starts on June 10 and may be an important catalyst for the gaming industry as new next gen software titles are needed to monetize phenomenal early hardware adoption We have seen accelerated hardware sales since the launch of 8th gen consoles in November but still lack enough next gen software sales to offset prior gen weakness The industry should benefit from MSFT39s Xbox One price cut while the early sales data for Ubisoft39s Watch Dogs is encouraging breaking company records for sales in the first 24hours and first week and points to strong underlying demand for good titlesTony Wible can be reached at twiblejanneycom IMPORTANT DISCLOSURESResearch Analyst CertificationI Tony Wible the Primarily Responsible Analyst for this research report hereby certify that all of the views expressed in this research report accurately reflect my personal views about any and all of the subject securities or issuers No part of my compensation was is or will be directly or indirectly related to the specific recommendations or views I expressed in this research reportJanney Montgomery Scott LLC quotJanneyquot Equity Research Disclosure LegendIndividual disclosures for the companies mentioned in this report can be obtained by accessing our Firmamp8217s Disclosure SiteRead all Tony39s MediaBizBloggers commentaries at Wible39s Weekly JanneyMediaEntertainment Check us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBloggerThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaBizBloggerscom management or associated bloggers MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries

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Wall St. Speaks Out on C-7, Programmatic, OTT and More

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The Ad Council, Huntsman Mental Health Foundation and Amazon Announce “The Mind Set” to Support Mental Health - Ad Council InSites

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