What a Scripps Tie-Up With Viacom or Discovery Would Mean for Advertisers
July 26 2017 - 4:04PM
Dow Jones News
By Alexandra Bruell
HGTV-parent Scripps Networks Interactive could be snapped up in
short order by Viacom Inc. or Discovery Communications Inc. Either
takeover scenario would create a media giant far better positioned
to offer advertisers a compelling audience mix, more high quality
programming under one roof, and advanced ad-targeting products.
A Discovery-Scripps tie-up would create a must-buy network group
for advertisers interested in targeting women. A Viacom deal could
inject some of its ad-targeting prowess into Scripps' business and
offer advertisers programming reaching a broad range of
demographics.
And either combination would yield the sheer benefits that come
with scale, including more attention from ad buyers with the most
spending power. The ad buyers, in turn, will be pleased to be able
to negotiate bulk buys at better prices than they could get from
two smaller concerns.
During negotiations, "we start with the bigger guys first," said
Lyle Schwartz, president of investment for ad-buying giant GroupM
in North America.
In a bleak TV ratings environment, media companies have been
looking to refocus on a few core networks and de-emphasize or even
shut down others. Again, bigger companies can accelerate that
process.
"There are simply too many ad-supported entities on television,"
said Ben Winkler, chief investment officer at ad-buying firm OMD.
If mergers happen, "the playing field will be narrower but more
lush," he said.
With family-friendly unscripted shows, like HGTV's "Property
Brothers" and "Fixer Upper" and Food Network's "Chopped," Scripps
is a favorite among advertisers trying to reach women. No rival has
been able to emulate the company's strategy and programming, said
buyers. As a category, lifestyle programming of the kind Scripps
specializes in has generally outperformed general entertainment in
the ratings over the past several years.
Scripps has trumpeted the fact that people tend to watch its
programming live, opposed to time-shifting it, an advantage with
marketers.
"Scripps has done an excellent job of bringing quality content
to a handful of networks and attracting high value high income
women in endemic content," said Mr. Winkler. "They found a vertical
that's relevant to a lot of advertisers."
Discovery is strong with female audiences as well, and the
tandem would be formidable. Among the top 20 cable networks, four
of the five most female-skewing channels are owned by Discovery and
Scripps, according to Nielsen data.
A Viacom deal would offer a different value proposition for
advertisers, offering marketers a "coast to coast" mix of
demographics including young men. Some clients wouldn't be
interested in Scripps' food or gardening programming, but combined
with Viacom's MTV or the Paramount channel, that could be an
enticing portfolio. "I can work with them across a lot more
networks, genres, demographics," Mr. Schwartz said.
Scripps programming could raise the profile of networks like
Viacom's TV Land, said another longtime ad buyer. It might not be
as easy to "dismiss" those channels when you want to reach women
through Scripps, she said.
Ad buyers are also looking for media companies to offer new ad
products that help them target younger audiences foregoing
traditional cable. Those offerings might include more compelling
data and analytics targeting tools, virtual reality ad formats,
cross-screen campaign packages or events, said Mr. Winkler.
Ad industry executives don't view Scripps as a leader in this
area. A deal with either Discovery or Viacom could provide Scripps
with the financial resources to invest more in advanced ad
products.
Viacom, in particular, has been aggressive on this front. The
company recently teamed up with rivals Turner and Fox to build a
new audience-targeting tool called OpenAP. The company also has a
data product called Vantage to help advertisers figure out which
Viacom channels best reach their target audiences.
Write to Alexandra Bruell at alexandra.bruell@wsj.com
(END) Dow Jones Newswires
July 26, 2017 15:49 ET (19:49 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Via Renewables (NASDAQ:VIA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Via Renewables (NASDAQ:VIA)
Historical Stock Chart
From Apr 2023 to Apr 2024