Facebook, Comcast Side With Broadcasters on Ad Competition

Others didn't agree. It's to Comcast's and Facebook's advantage to be seen by Justice as having competition, economist Preston McAfee said in an interview. “The larger the market, the less the DOJ restrictions will be on those companies.”

Day one of the workshop featured varied opinions on whether broadcaster ads are substitutable with digital ads (see 1905020068). Friday's panel on competitive dynamics had a cohesive front. The panelists were all “just answering honestly about what's happening in the marketplace,” said panelist and Tegna CEO Dave Lougee, in an interview.

Moderator and Antitrust Division trial attorney Lee Berger repeatedly asked questions that suggested broadcasters provide a different product than digital advertisers do. He told us afterward he had an “inkling” the panelists would be in agreement. The department has found that competitors and advertisers often support each other and avoid dissenting when regulators questions broach questions about competition in a market, he said. Berger chose the panel's makeup himself, he told us.

Lougee and Sinclair CEO Chris Ripley declined in interviews Friday to predict whether the gathering would lead to change in DOJ's view of broadcast competition. “I really don't have any idea what they'll do with today's information,” Lougee said.

Antitrust Division acting Chief of Staff Daniel Haar said at the end of Friday's event staff learned a lot from the workshop. He played coy about eventual results. “Stay tuned,” Haar told us in response to a question on whether the workshop would lead to a public report or announcement of changes to policy.

“There isn't such a thing as television over here and digital over there,” said Comcast Cable Advertising President Marcien Jenckes at the event. Digital video ads often use the exact same content as broadcast ads, Lougee told the panel. Dollars spent on digital ads are dollars taken away from broadcast advertising, said Jenckes.

The agency's view of broadcasters' “reach” is incorrect, the panelists said after Berger characterized broadcasters as having more reach than cable companies. Though stations may be able to technically reach most households in their designated market areas, that doesn't mean they're being viewed to that degree, NAB General Counsel Rick Kaplan said. DOJ “conflated” reach with views, Kaplan said. “Just because my channel reaches a household doesn't mean anyone watches it,” Lougee said. Nielsen data shows broadcasters don't reach as many households as MVPDs, he said.

Comparing broadcast spots and digital ads is analogous to comparing soda and milk, McAfee told us. They're both beverages, but no one would claim they're competitors, he said. One point the panelists never raised is that broadcast video ads cost vastly more than similar ads on digital platforms, he said. “The low price tells you it isn't as valuable.”

Digital ads don't cost as much because they're generally targeted to narrower audiences, a broadcast executive told us. Digital ads with the broad reach of a TV advertisement would be comparably priced, the executive said. Though much focus is on the targeting capability of digital advertisers, they're just as able to reach broad audiences as broadcasters are, Sinclair CEO Chris Ripley said during a panel.

Broadcasters are “pygmies in a land of giants” when measured against tech companies, Ripley said. Though broadcasters view ATSC 3.0 and its ad targeting and data capabilities as a possible antidote, it won't solve the problem, Ripley said in response to our question. DOJ's declining to change its stance on competition could impede the rollout of 3.0. by preventing broadcasters from achieving the scale needed to remain competitive, Ripley said: It's “really important” to “have the rules of the road set up to foster innovation and competition.”