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Why Time Warner Is Upbeat about Advertising in 2H17

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Advertising revenue outlook

Advertising is a key source of revenues for companies like Time Warner (TWX), 21st Century Fox (FOXA), and Comcast’s (CMCSA) NBCUniversal. Time Warner (TWX) expects to be acquired by AT&T(T) by the end of this year. Time Warner expects targeted advertising to be the way forward for the company.

AT&T, after its proposed acquisition of Time Warner, expects to start an advertising and analytics business that will combine AT&T’s viewership data with Time Warner’s content to offer advertisers targeted advertising packages.

Time Warner expects to earn ~50.0% of its advertising revenues from targeted advertising by 2020. According to a report from eMarketer, programmatic ad market is expected to be worth $27.0 billion in 2017.

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21st Century Fox and Comcast’s advertising outlook

Advertising is a key component of revenue for 21st Century Fox. In fiscal 3Q17, advertising made up 29% of the company’s total revenues of $7.6 billion. In the first month of fiscal 4Q17, 21st Century Fox has seen advertising growth in the high single digits for its domestic and international cable networks.

Comcast has done very well at advertising upfronts this year with its NBCUniversal business raking in $6.5 billion in advertising commitments for the upcoming television season, which is 8.0% higher than last year’s figure.

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