Winning on three screens – infrastructure or inventory?

The three screen play in advertising is broadly understood to be the ability to deliver advertising on all of television, PC and mobile devices. Given that all are possible almost everywhere what is this debate really about? Put simply it is about control.

Some argue that owning the infrastructure is the place to be, others that the ownership of inventory is as good or better. In my view the lowest common denominator or the weakest link is the decisive issue. Let’s take two examples:

Company A has 50 million cellphone subscribers, 30 million broadband subscribers and 1 million TV subscribers.

Company B has 500 million users of mobile content, 500 million broadband page views (or impressions or minutes viewed, whatever) and TV programming that delivers tens of thousands of GRPS.

It’s likely that Company A is a phone company and that Company B is a television network or media company. Assuming that company B has the right to sell its own inventory, game over. Company B is the king of the three screen play simply because it has the largest cohort of customers who can be exposed concurrently or sequentially to all three screens. This may change when Company A achieves a TV footprint at scale.

The model is only disturbed if Company B does not control the inventory as a result of Company A or another infrastructure player acting as gatekeeper by maintaining some kind of walled garden, a model which we know to be unsustainable.

As a consequence Company A needs to find alternative ways to monetize its infrastructure. Either it can enter the inventory game by creating or acquiring content that appeals to its users more than that of the myriad company Bs, or it needs to charge network access fees to each or all of its platforms that justify the costs of building and maintaining that network. That’s what they try and do now.

The question is this; can Company A charge more for integrating content / service delivery across three platforms that it can for the delivery of each service on a platform specific basis and, if so how? Alternatively does Company A have an asset which it does not currently charge for that has a significant value to Company B?

The answer to the first part of the puzzle is complex and hard because the first two screens (in my order) are governed by the internet protocol which has an inherent openness which, again, allows the content owner to integrate at the same or better level than the infrastructure player. The second part of the puzzle is about the unique assets of Company A in terms of data and customer ownership.

Only the infrastructure owner has perfect (Googlelike) visibility about the behavior of its customer. Consumers only have one provider of cell service, one broadband ISP and one provider of TV service. As a result the behavioral data sets operate on a different and complementary axis to that seen by the owner of content and thus imply a rich targeting and measurement enhancement which is currently unexploited for the purposes of advertising.

In addition infrastructure owners have a direct billing relationship with their customers and one that (in the case of cell phone service) operates on a second by second micropayment level. In this these companies have the potential to act as a powerful transaction player beyond the collection of tolls for the use of their pipes. Maybe then Company A should be looking at the revenue streams of Nielsen and PayPal rather CBS as their next target for growth.





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