The last few years have seen an increasing number of B2C companies make their way into the ad-tech sphere - primarily through M&A. These moves have by and large been motivated by a desire to better understand their audiences, and how those audiences behave, presumably in a play to generate additional revenue through better ad targeting. With a recent CNBC report claiming media buyers had raised concerns over Disney's lack of data targeting, we might be about to see Disney enter the ad tech arena too.
Segmenting users is an ability which is in high-demand for content creators. Not only does it enable them to create an increasingly tailored and personalized content experience, but also serves to optimize ad performance and ad relevancy. This latter benefit is absolutely critical for content creators struggling in a saturated digital content economy. The better the targeting and the richer the data, the higher the demand for a given chunk of ad inventory, and therefore the higher the price advertisers are willing to pay.
Hurt by lower advertising sales at Cable TV networks, Disney’s profits last quarter missed analysts’ estimates. With cable TV viewership down, OTT content is becoming a more and more important channel for content consumption, and Disney’s latest acquisition of a stake in the streaming video company BAMTech underscores the importance that it finds in OTT digital content distribution.
But Disney’s investment in extending their digital reach through video streaming doesn’t address the lack of data targeting technology which is holding marketers back from taking advantage of their premium ad inventory. Disney claims they have “invested in the use of data to help create better targeting as well as better advertising,” using ESPN as an example and touting its ability to help brands reach fans through outcome-based advertising during key sporting moments.
But that’s only the first step, and it seems like it's only a matter of time till Disney will make in-house advertising technology capabilities a priority. Like other media giants Comcast and RTL Group, we may likely see Disney pursue an aggressive M&A strategy in order to ensure they are maximising the potential of its high-quality audience.