RESEARCH REPORT

In brief

In brief

  • Unable to respond with what advertisers expect in terms of data-driven approaches and tools, the TV linear advertising market has suffered.
  • Unless they take action, TV companies will face the continued migration of advertisers’ dollars from linear TV to digital channels.
  • To reignite growth, TV companies need to harness the power of new technologies and make significant changes to their operating models and organization.


TV advertising remains an extremely valuable commodity. It’s a significant part of TV companies’ revenue mix (predicted to be more than one-third by 2022). And changes that can deliver relatively small percentage uplifts on the industry’s multi-billion-dollar revenues will have a decisive impact on the bottom line. But to reignite growth and turn advertising back on, TV companies need to harness the power of new technologies and make significant changes to their operating models and organization.

The burden of legacy

In 2017, internet advertising revenue surpassed TV for the first time. And it’s a trend that looks set to continue. Yet TV companies—with some exceptions—have been slow to respond to the challenges of meeting advertisers’ expectations in the digital age. Those have been reset by digital advertising platforms, with their ability to target and personalize ad campaigns to individual consumers. What’s more, new ways to buy digital advertising inventory—e.g., programmatically—have set new benchmarks for efficiency.

With many TV companies unable to respond with what advertisers expect in terms of data-driven approaches and tools, the linear TV advertising market has suffered. Unless they take action, the majority of TV companies will face the continued migration of advertisers’ dollars from linear TV to digital channels. But with the right operational, organizational and technology strategy, these TV companies can do more than simply compete with digital. They can drive significant new revenue from linear advertising.

The linear TV opportunity

New set top box (STB) and smart TV technologies are creating the possibilities of understanding audiences better and serving more interactive and targeted ads to specific consumers or audiences who can be defined by much more than broad demographic categories.

What has been a barrier to TV companies developing more advanced advertising—technology—is now becoming an enabler.

New broadcast standards are also expanding what’s possible for TV advertising. ATSC 3.0 is one. Advanced advertising is a key component of this new standard, with ATSC 3.0 enabling dynamic ad insertion into live feeds and video-on-demand. And because with ATSC 3.0 data can flow in two directions, TV companies will be able to capture information about consumers’ real viewing habits at an individual level, greatly enhancing the ability to target ads.

Digital advertising has forced TV companies onto the back foot. But technology developments could help them to spring out of the corner and fight back. What do they need to do to take advantage?

Three key areas to drive new advertising growth

  1. Reshaping the culture and organization
    TV companies will need to effect a significant change in their organizations in order to take advantage of the new possibilities afforded by technology. That means skills, talent and operating model. But above all, it requires them to become data-driven businesses. They’ll need to bake data and analytics into the sales process end-to-end, from forecasting to proposals and from pricing to execution.
  2. Making life easier for advertisers
    To create new targeting capabilities, TV companies must be able to share common definitions of what those targets are and get on the same page as advertisers seeking to reach certain types of consumers. By pooling audience segment and viewing data, and perhaps even inventory, TV companies can advance their linear advertising capabilities.
  3. Transforming ad operations
    Personalized and relevant ads served at just the right time to the right people have, to now, been the preserve of the digital players. But that too is changing as TV advertising capabilities evolve.
    • Multiplatform TV advertising: For most advertisers, it’s not a question of choosing either TV or digital. They want both. Accenture and Disney|ABC set out to identify the key drivers of advertising ROI and found that TV advertising is a critical component of advertising campaigns and generates significant gains in ROI when compared with standalone digital. TV has a "halo" effect on digital as part of an integrated campaign, with multiplatform increasing overall ROI by as much as 10 percent. TV companies should lean on this added value to position themselves as a critical component of multiplatform advertising campaigns and develop capabilities and partnerships that enable them to drive CPM values and revenue growth.
    • Optimize inventory: Today, the majority of linear TV advertising audience forecasting is carried out manually by a few highly skilled resources. This creates challenges in a number of areas. Not only is the accuracy limited, and therefore unable to support an optimal pricing strategy, but it’s also costly and time-consuming. And that inhibits the flexibility and responsiveness that are needed to react to market challenges as they arise. In contrast, using machine learning on a big data platform that combines inventory data with other sources can create significant improvements in revenue. Accenture worked with French TV company M6 to implement a big data platform that provided machine learning, predictive modelling and data visualization.

By harnessing the possibilities of digital technologies, many TV companies can now not only claw back some of the growth that they have lost to the digital platforms but also drive wholly new revenues from digital capabilities. But while technology is an enabler, the changes required to take advantage are both organization-wide and ecosystem-wide. New operating models, organizational reinvention and digitally astute talent are all essential. TV companies that get it right, will see the rewards from combining the unique power of linear TV advertising with the agility and data-driven targeting of digital. It’s time to turn TV advertising back on.

About the Authors

Lynn McMahon

North America Media & Entertainment Lead​


Michael Chapman

Media and Entertainment and Video Strategy Global Lead​


Sef Tuma

Global Digital Video Lead


Mark Flynn

Global Communications and Media Research Lead

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