- NBCUniversal knows people are fed up with TV ads, which is contributing to cord-cutting.
- To fix that, it’s cutting ad loads in prime time this year.
- It’s also rolling out a system to match ads to content, and it says people like the ads in testing.
- The challenge is to cut the ad load without sacrificing revenue.
- NBCU is also trying to get rival companies to adopt its new cross-platform-measurement system, but it faces resistance from an industry under pressure and fearful of change.
People are fed up with all the ads on TV, leading them to cut the cord and get their entertainment fix on digital-streaming services that have fewer to no ads.
Linda Yaccarino, chairman of advertising sales and client partnerships at NBCUniversal, doesn’t shy away from the issue.
“The pressure is not to keep the ad load as big as it is,” Yaccarino told Business Insider. “And let’s call it out — the live linear experience for premium content is less than perfect. It’s a lot less than perfect, right?”
“We all know there’s too much advertising, and we all know that is adding to the acceleration of people, whether it could be a spectrum of cord-cutting to cord-shaving or to pushing to the SVOD businesses,” she said, referring to subscription-video on demand.
NBCU is using AI to match ads to content
NBCU has announced that it plans to cut the time of its prime-time ads by 20% this year, after pledging a 10% cut last year.
It’s also testing anartificial-intelligence-powered tool that matches ads with contextually relevant shows at the scene level.
With the tool, the advertiser indexes its existing ads with emotional or contextual attributes, and NBCU matches the ads to scenes with the same attributes. The idea is that people are more apt to accept ads in a positive light and that the ads will have more impact if they’re contextually relevant.
See also: NBCUniversal’s ad sales chief unveils her plan to use tech and a better TV experience to compete with Google and Facebook in 2019
“So if I take a State Farm ad that has a multigenerational family in a celebratory setting, it’s going to place it across our portfolio in content that spans the gamut of everything from ‘This Is Us’ to ‘The Kardashians’ to ‘The Tonight Show’ to ‘Suits,'” she said.
Early tests with four brands show that the matched ads tested better on measures such as likability, memorability, lift, and search, she said.
Rivals are slow to adopt NBCU’s cross-measurement system
NBCU is also trying to sell more advertising on its inventory across digital platforms and get other industry players to adopt a cross-platform measurement system it developed called CFlight.
Yaccarino acknowledged it’s been hard to get others on board, which she attributed to fear in an uncertain business climate.
“It’s illogical, but the uncertainty causes a fear, which causes a paralysis of movement,” she said. “And when you look at an industry — particularly if you look at the holding companies, financial models under pressure, working under razor-thin models, brands moving from agency to agency — to add the uncertainty of being a first mover in changing a decades-long business model is a scary thing for people.”
“There’s a 100% acknowledgement and acceptance that the business has got to change. So the agencies, the holding companies, have been phenomenal partners to NBCUniversal. I think some other media companies or publishers are deciding and wrestling with, ‘Do I need my own secret sauce, or should I go with this other thing to get past the old legacy? Well, I don’t want to go with a competitor.'”
Another challenge is reducing the ad clutter without sacrificing revenue. Naturally, Yaccarino hopes to convince advertisers that NBCU’s ads will perform better and be worth paying more for.
“I would imagine that the opportunity to get next to a unique product that drives more value out of the brand will result in a better business relationship for both the brand and NBCU,” she said.
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