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Why are TV companies not valued like tech companies?

As the advertising industry continues to grapple with the massive disruption of content consumption models, including the CTV “cord cutter” and “cord nevers” revolution, the question of how to value “legacy” advertising mediums, like TV, seems relevant. That question ultimately comes down to whether TV is fundamentally an effective marketing medium in the age of Smartphones, ConnectedTVs, Amazon, FB/Instagram, and the Googlopoly. 

Simply put, TV remains the most powerful marketing medium that has ever existed. The problem is, the TV industry can’t demonstrate how effective TV advertising really is. 

TV has massive scale and reaches audiences that are generally captive and focused on the advertiser message in a relatively undistracted and uncluttered environment, often in a home setting where the TV is the feature of the room, allowing marketers to deliver an immersive message/experience. This unique combination of large screen form-factor and audience modality creates the opportunity for advertisers to deliver messages that have a lasting impact on consumers, including awareness, recall, consideration, and action.  

Consider, as one simple example, that Morris the Cat has a 70% recall, a full 20 years after the last TV ad aired.   

Yes, TV is responsible for the choices we make in the grocery aisle, at the car dealership, when voting, buying clothes, or just ordering pizza. You name a major (or minor) purchase decision in your life, and a TV ad was probably one of the influencing forces behind it, whether you realized it or not.

However, TV is also the most undervalued advertising medium. To illustrate the point, here is a brief comparison of valuations for TV media networks vs. advertising-driven tech companies like Google or Facebook:

TV/Media company Valuations (at time of writing):  

  • ESPN/Disney:  ~40B (the most valuable media company)
  • Comcast/NBCU:   11.7B
  • CBS/Viacom:  21B
  • ABC:  1.7B

Advertising tech + media company valuations:

  • Google:  1.1 *trillion*
  • Facebook:  785B
  • Snap:   74B

Why are TV companies not valued like tech companies?   

While TV has massive reach, the value creation associated with that reach comes down to advertiser participation and the ability to measure the efficacy of TV ads for marketers.   

Let’s address these two areas.


TV advertising is a ~72B industry that is dominated by 300-500 national advertisers. Compared to Google or Facebook, which have ~9M advertisers, the problem is clear–in order for TV advertising companies to reach the lofty valuations enjoyed by Google and Facebook, TV needs to be easily accessible to millions of advertisers instead of a few hundred.   

While TV advertising is historically a high friction process, the roadmap for “democratizing” access to TV advertising is really not that complicated. We need to build simple systems that allow marketers to set up and execute TV ad campaigns in minutes, and we need to help advertisers develop high-quality TV ad creatives at a reasonable cost. This is the path established by paid search and social platforms, and it is doable in TV. 

Measurement & attribution

As we noted, TV has historically been measured using outdated methodologies like panels that end up making other mediums look better in terms of return on ad spend (ROAS). Ultimately, TV companies are not valued like tech companies because TV doesn’t get appropriate credit for how much it influences consumer behavior, which in turn comes down to the ability to measure the performance, and ROAS, of TV advertising.    

But that’s changing fast. The growth of connected TV (CTV), which runs on the same technology infrastructure as digital, is making it increasingly possible to understand TV advertising performance in the same way we measure and understand digital advertising (clicks/visits, sales, etc.).  We can now stitch together technologies that allow us to see and measure how TV ads drive “second screen behavior”, which allows us to associate TV ads with subsequent clicks (and sales) from smartphones, laptops, and desktop computers, just like digital.

TV ad industry reinvented

As TV approaches parity with digital in terms of measurability, it will become increasingly clear that as a medium, TV still has the greatest impact on consumer behavior, and consequently more advertisers will want to participate in the marketplace.  

But in order for marketers to participate in TV, it has to be easy to create and buy TV ads.   The exciting news here is that there’s an entire ecosystem of tech companies emerging to help advertisers develop high-quality TV ad creatives in a cost-effective manner, including emerging business models built around curated gig economy marketplaces for independent TV producers and videographers.  And with TV creative in hand, marketers can now use tvScientific’s self-serve platform to set up and launch a targeted TV campaign in minutes, with full digital-like reporting to help immediately understand their return on ad spend (ROAS). 

As limitations around TV access and measurement are addressed, the TV advertising landscape will evolve rapidly and ultimately mirror digital marketplace models like paid search and social–i.e. Google and Facebook’s ad platforms–that support mass advertiser participation. This will in turn result in a historic boom–and higher valuations–for companies in the TV advertising industry.   Lookout Google and Facebook!

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