A look inside NBCUniversal’s data-powered media offering
NBCUniversal recently unveiled some key strategic maneuvering, including the launch of its cross-screen advertising offering plus joining the OpenAP consortium. Ahead of next month's Upfronts series, The Drum leans in on the TV conglomerate's attempts to digitize.
The US viewing public has never consumed more content than they do at present, but the shifting nature of this consumption is presenting advertisers, and more pertinently traditional TV networks, with a quandary: how to target and measure audiences across screens, and shifting viewing patterns.
Traditionally, TV has been the king of the media jungle when it comes to convincing advertisers to part ways with their precious media budgets. However, as research from GroupM demonstrates, spend on digital media has already surpassed that on traditional linear TV in some of the world’s most advanced markets.
The rise of digital
While TV advertising might still be king “for now," GroupM notes “young audience defections/poor measurement limit growth” in spending. For this reason, the WPP-owned outfit forecast that last year saw digital will account for 77% of all new ad spend, while TV will grab 17%.
However, while such figures may prompt industry observers to observe that “flat is the new up” when it comes to TV ad spend, further inspection demonstrates the draw of TV, especially at tentpole events.
‘TV still works,’ but investors are cautious
For instance, fellow WPP outfit Kantar Media observed that this year’s Super Bowl LII generated $414m in ad spend, with only four “first-time marketers” accounting for the 49 minutes 35 seconds of commercial airtime.
So while it remains clear to marketers that ‘TV advertising works.' limited measurement capabilities make it increasingly difficult for marketers to justify sustained investment in TV ad spend, particularly as zero-based budgeting increasingly becomes the norm.
In a recent note to investors, Brian Wieser, Pivotal Research, senior analyst, spoke of the “weak fundamentals” facing traditional TV players, when describing the headwinds such as cord cutting, and high-spending marketers finding advertising success on other screens. So much so, the analyst was even downbeat when it comes to their fortunes in the traditional annual TV ad spend bonanza – the Upfronts.
“High pricing in the coming Upfronts – mid to high-single digits for network prime time, probably – won’t flow through to revenues as a result. For similar reasons, ongoing efforts to bring advanced audience targeting will only slightly curtail the decline,” reads his note.
TV’s fight back against the digital headwinds
However, this threat is not lost on traditional media owners, and as one of the largest media conglomerates in the US, NBCUniversal (NBCU) is positioning itself at the center of the TV industry's fightback.
The Comcast-owned outfit has been lifting the lid on its media offering as of late with the outfit yesterday (April 19) joining Fox, Turner, and Viacom in the OpenAP ranks. This move combines NBCU audience data capabilities with OpenAP’s standardized data sets making it easier for advertisers to target TV audiences at scale.
This strategy can arguably be traced back to last Fall when NBCU’s sales chief Linda Yaccarino, assembled what amounted to an industry all-hands for “the greater good.” Speaking at the time, she noted how the ad-supported ecosystem needs to band together to “build the metrics our industry needs”.
Earlier this month, the TV network, part of cable network provider Comcast, attempted to address the issues highlighted above with the unveiling of a custom video advertising metric with which to measure advertising impressions across all viewing platforms; including live, on-demand, broadcast TV and digital.
The first-of-its-kind metric has been dubbed CFlight – complete with third-party verification – and NBCU harbors hope that it might one day be adopted by agencies, marketers and other networks as a new industry standard.
NBCU hopes this metric will help create a new currency, guaranteeing campaign performance in the company’s programming, especially where significant audience consumption is on digital platforms.
How CFlight works
Taking part in an on-stage discussion with OTT targeting and measurement provider Tru Optik, Krishan Bhatia, NBCU, executive vice president of business and strategy (pictured below), further unfurled its rationale for the launch, noting that the traditional TV advertising industry’s lack of action was a source of frustration.
“We’ve generally under-predicted the growth of over-the-top [OTT] over the past few years, I just had my team look at this. We look at capacity estimates, etcetera, historically underestimated by quite a bit,” he notes.
The recent launch of CFlight, which includes verification from vendors including ComScore, Moat and Nielsen, is an example of this ambition to show leadership in the space, according to Bhatia, how also notes that solutions just won’t “show up in a gift basket.”
He goes on to explain: “What we're trying to encourage is that there are a more diverse set of innovative players that help move the ball forward and you're not just relying on incumbency.
CFlight represents NBCU’s desire to create a metric that is no longer arbitrarily tied to broadcast areas of programming in a way that can be squared with shifting consumption patterns, according to Bhatia.
For instance, oftentimes a video ad served on video-on-demand (VoD) services is only deemed valid when viewed within in three days of its original broadcast, which can lead to discrepancies over whether an ad campaign is “current” or “in flight”.
However, when as much as 50% of NBC viewership of what would traditionally be labeled as late night prime-time content – programs such as This Is Us – is viewed via VoD services, a new approach was needed, according to Bhatia.
He explains further: “We wanted to get to a philosophy where we say if a marketer’s campaigns (in general) is reaching the right demographic, and in context – meaning I understand that the marketing campaign is associated with the [advertiser's desired] content – and 'current’, then it should count.”
Bhatia further notes: “It's not just a shift in platform, it's a shift in time, so you have to account for both, right? That metric actually does and I think now it's really resonating with programmers, and the agencies.”
Speaking specifically to the network’s planned strategy for the forthcoming Upfronts season, he talks of how NBCU wants to “bring the power of the portfolio” with content at the core, and its adtech stack powering the business value.
"Content, that's still our core asset, but increasingly we're talking about our capabilities and how we marry content with everything. So you'll see that these are very common.”
Key to the strategy's prospects of success will be the integration of its various technology components, as indicated by its $320m purchase of video ad server Freewheel in 2014, and the subsequent $100m purchase of Sticky.ads in 2016.
These purchases have also been backed up the recruitment of named talent from digital media circles, as exemplified by the appointment of former Maxifier chief executive Denise Colella as senior vice president advanced advertising products and strategy.
Appointed in 2015, Colella is charged with shaping NBCU's audience graph which subsequently powers its advanced advertising offering Audience Studio, which has been in operation since 2016.
NBCU's Audience Studio houses four distinct offerings, its Audience Targeting Platform which lets advertisers target specific audiences on linear TV, as well as NBCUx which offers likewise for online audiences. Also included is NBCU+ Powered by Comcast, which lets advertisers target audiences based on Comcast set-top box data, as well as Social Synch that lets brands extend their audience reach on social media.
For Bhatia, this is the perfect example of the marriage of audience and creativity, with Colella's Audience Studio still a project in the early phases of its evolution.
"It's basically our proprietary data asset which has an audience graph at the core of it," he says. "That is managing all sorts of data inputs from a television viewership perspective that we can then append client data or any other matchable data source. You can use that to target segments."
NBCU's programmatic TV offering
For approximately 18 months NBCU has also been "leaning-in to what we call programmatic TV", according to Bhatia, a strategy it recently bolstered via way of a tie-up with the Adobe Advertising Cloud TV.
Given that the concept of programmatic TV involves the merging of two previously different industries, Bhatia explains the NBCU's interpretation of the phrase. "In our mind [programmatic TV is] a way for the television industry to automate transactions of planning and buying."
The process has involved digitizing linear TV inventory into a proprietary API which is then made available a select number of demand-side platforms (DSP) so that marketers, and or agencies, who use those DSPs can create a television plan.
This is then passed back to NBCU's planning team who check for inventory availability and pricing, and from here the media plan then goes into the traditional workflow process.
Bhatia claims the new process removes approximately 50% of the traditional workflow. "To us is a huge advancement ... and if we can scale that across our agency and client partnerships moves us forward in the right way," he adds.
Will less mean more?
As NBCU readies itself to stage its 2018 Upfronts session on May 14, the TV network's sales chief Yaccarino has widely been reported as saying it will cut its commercial air time by as much as 20% in recognition of audience's lowering tolerance for ads.
However, this is not to say that NBCU is planning for a 20% dip in revenues during one of the most lucrative times of the year or the TV industry, rather it is relying on the improved audience mining capabilities above to help bolster yield.
Speaking at the time with Business Insider, she explained the extent of just how granular it hopes to become with its targeting adding that will be able to place their ads next to specific scenes from shows based on dozens of content attributes, such as "family."
She concludes: "The market will ultimately determine its worth ... we knew that we had to bring a lot more value to the table. Any brand marketer will tell you, it's all about the value that’s delivered."
NBCUniversal will participate in The Drum's Video Futures event, hosted in New York City on May 8, along with representatives from Diageo, GroupM and Telaria. Attendance is free, click here to register