As Facebook’s Cambridge Analytica data breach scandal deepens, analysts have suggested the free-to-air (FTA) broadcasters could see healthy returns as advertisers are dissuaded from switching money out of TV.
Cambridge Analytica, the firm that helped Donald Trump get elected, amassed data on 50 million Facebook users without their permission, sending Facebook’s market value down nearly $50 billion since Friday, according to FactSet.
However, analysts suggest the debacle is good news for broadcasters such as Channel 4 and ITV as advertiser views about the medium’s “resilience” are cemented.
“We think the big winners could be the FTA broadcasters in two ways,” said Liberum’s Ian Whittaker and Annick Maas on Wednesday.
“Firstly, the increasing problems with online are, at the very least, likely to dissuade advertisers from aggressively switching money out of TV advertising into online. Comments from several broadcasters suggest that some money is already flowing back into TV from online from advertisers who are becoming more convinced by TV’s resilience.”
The analysts also said the scandal presents a “very significant opportunity” for broadcasters to monetise their video on demand (VOD) advertising services, which are “very high margin” and which do not suffer from the same issues as the online platforms in terms of viewability.
“We see these additional revenues as the main generator of ITV’s profit growth in the future,” they said.
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Alongside broadcasters, the analysts also believe the scandal – coupled with wider concerns over online brand safety and viewability – is “positive” for agencies.
“The news…weakens dramatically the argument that clients should disintermediate the agencies and go directly to the big online platforms,” they said.
“Advertisers, we feel, are increasingly unlikely to take that risk. There is an argument that, if the controversy leads to less people providing their data willingly, that this could undermine the agencies’ attempts to monetise data, just as an oil company cannot survive without oil, how can a data company survive without data.”
However, if advertisers do take more control of their data, then the agencies would be in a better position to work with them to more effectively monetise it.
“It would create more demand for the agencies’ services,” they said.
