FANG (Facebook, Amazon, Netflix, Google/YouTube) is about to take a huge bite out of traditional network TV (ABC, NBC, CBS, and Fox), and the media business will never be the same.
To understand how profound the implications of the recently announced NFL on Amazon Prime or YouTube TV are, it may help to understand the economic engine that drives traditional commercial television.
The goal of the commercial television business is to package a specific, targeted audience and sell it to the highest bidder. The more precise the targeting, the higher the fee, and of course, the bigger the targeted audience, the bigger the fee.
TV Is Data Poor
Because the broadcast television industry is data poor (it only offers metrics about itself), this model has never been a complete solution for brand or lifestyle advertisers. In practice, an advertiser needs to translate ratings and demographic information from Nielsen into knowledge and insights it can link to its KPIs (key performance indicators). Because content is distributed across so many non-TV platforms, this process gets more difficult every day. How effective was your broadcast TV buy? Was there an increase in sales that could be attributed to it? Could we have spent this portion of our advertising budget differently?
FANG Is Data Rich
There are four data sets that help define each of us: attention, consumption, passion, and intention. While traditional broadcast TV tries to measure or attribute some of these to TV viewership, FANG has actionable data that drives KPIs.
Facebook knows what you are paying attention to. You post and share the things you care about, and your Facebook profile makes your attention actionable.
Amazon knows what you consume and what you’re thinking about consuming. If you’ve bought it or are planning to buy it, Amazon knows it and can act on that data.
Netflix knows your passions. You demonstrate how you can be reached on an emotional level every time you watch a video. Netflix knows more about the kind of entertainment that ignites your passions than you do. It continually acts on that data.
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