The advertising industry is likely to change more in the next five years than it has in the last 50 years, according Linda Yaccarino, Chairman, Advertising and Client Partnerships at NBCUniversal, one of the executives who is helping to facilitate that change. Her company is currently influencing the way TV is measured and traded, the relationship between broadcasters and their clients and agency partners, and the role of broadcast sales houses delivering audience reach via third-party digital properties, among other things.
One of the most notable changes Yaccarino has already overseen at NBCU is the creation of a more direct relationship with advertising clients, putting aside the long-standing and industry-wide tradition that agencies alone have the meaningful interaction. This is partly a response to the success Google and Facebook have enjoyed with the direct approach. “They have done a fantastic job of communicating their capabilities and messages to marketers directly,” Yaccarino acknowledged recently at Future TV Advertising Forum.
Direct relationships are also considered necessary to develop strategies and drive execution around advanced data and advertising, like the use of set-top box viewing data, for example.
NBCU, which has a portfolio of broadcast, cable network and digital properties, has a client partnership team whose sole purpose is to act as a business solution provider to brand marketers, working with advertisers directly. “They help clients accomplish their business goals, whether it is increasing profitability or improving reach into consumers,” Yaccarino explains.
“The goal is to grow ideas and create opportunities and communication platforms together. They [the client partnership team] then hand-off to the transactional side of the [NBCU] business.”
NBCU formed an agency partnership team to balance this initiative. “One of their jobs is to liaise with the client partnership team and brand marketers to ensure there is an open line of communication so they [the agency] know exactly what we are developing and doing. There is complete transparency,” the NBCU executive noted at the London event. “This has been very, very successful for our company.”
As we reported previously, ITV, the UK’s largest commercial broadcaster, updated its advertising strategy last year and stated a determination to work more directly with clients while simultaneously engaging more with agencies. ITV also wants to talk more about outcomes and driving the bottom line for a client business.
To help turbo-charge its change agenda, NBCU hosted a ‘State of the Industry’ forum in late 2017 for advertising clients, agency partners and even competitors to tackle what the broadcaster believes are the main barriers to innovation in TV advertising. The goal of the event, in Yaccarino’s words, was to “liberate the entire industry to think about change and coalesce around change”. The ultimate goal was to deliver a better product to consumers and offer better opportunities to brand marketers.
The agenda spanned media measurement and brand safety to how premium content is distributed and the consumer experience when watching TV. With outdated measurement and metrics being a particular concern, NBCU has since introduced CFlight, its own solution for counting commercial impressions across any screen (covering live, on-demand and time-shifted content in full episodes) and demonstrating unified all-screen audiences.
CFlight harnesses inputs from Nielsen, ComScore, Moat and others and provides the third-party verification advertisers expect. Serious effort has been applied to equalising the value of broadcast and digital viewing: only digital impressions that are viewed to completion count towards the audience total that NBCU is tasked with delivering to an advertiser, for example.
Co-viewing of streamed content (e.g. three people in front of a connected TV) is measured where this is possible, like on Roku devices or with NBCUniversal content on Hulu. This is an important step forward for TV delivered over non-broadcast infrastructure.
CFlight is not just a measurement solution but the basis for a currency that the broadcaster and advertisers can trade with. Non-broadcast (multiscreen/digital) viewing is included in campaign performance (e.g. audience reach) guarantees.
On some NBCU programmes, almost half of viewing would not have been captured using only traditional ratings measurements. As Yaccarino pointed out, the aim is to “deliver back to the advertiser a verified, guaranteed metric that better reflects consumer behaviour.”
Although NBCU is the most obvious beneficiary of this approach, Yaccarino reckons an initiative like CFlight boosts the whole industry. “If you believe the press narrative, viewing is going down when it is actually increasing, if only you can properly accumulate all the viewing that takes place across screens,” she argues.
CFlight has created new opportunities for advertising clients and has democratised television, according to Yaccarino. She is convinced that TV, across any screen, is the best place to combine advertising with video content, given the high-quality context. She contrasts the ability to improve brand awareness and affinity – as well as drive conversion – via TV advertising with what NBCU regards as the limits of performance-based marketing on social media platforms.
Given that demand for TV advertising exceeds supply, Yaccarino views better provision of multiscreen inventory – with verified and guaranteed metrics – as an additional opportunity for advertisers to get into this high-quality and brand safe environment. “What the marketer gains is more chances to deliver an advertisement to consumers in the best possible context, in the premium content ecosystem.
“Direct-to-consumer marketers or regional marketers did not have an opportunity to do this before, and have been suffering from the limitations of performance-based marketing from the digital platforms,” she argued. “Now there is more inventory in the premium content universe that is available to our brand marketers. There are more opportunities in television, because there is more inventory, so you can bring more advertisers into it.”
When it comes to categorising advertising inventory and the media owners that provide it, NBCU sees the world as premium and brand-safe versus the rest. Once you are in the premium brand-safe world, Yaccarino wants to avoid what she considers obsolete divisions based on which screens are used – something that becomes easier thanks to CFlight.
NBCU is determined to make it easier for its own advertisers to exploit more of the premium, brand-safe inventory that the broadcaster does not ‘own-and-operate’ – thus extending audience reach. The result is a growing list of partnerships with digital majors like Vox Media, Buzzfeed, Snap and Apple (some with significant investments attached). Yaccarino said her company makes “thoughtful choices” when partnering.
“We can offer a lot [of reach via owned-and-operated digital properties, which include websites and NBCU inventory on Hulu] but we cannot offer advertisers everything. We can still help them capture the consumers they are looking for, and this is part of our strategy and philosophy. We can offer a continuation [in audience reach in safe premium environments].”
Another big change that NBCU is driving in the U.S. is towards a better ad-supported viewing experience for consumers. Yaccarino confesses that until recently the linear TV experience in the U.S. had been “incredibly imperfect”, with ad-loads that are too high. That explains the initiatives at NBCU to reduce total advertising time by 10% and the number of ads-per-break by 20% for original primetime programming. But this is only part of the solution to improving the viewing experience. There is also a focus on making ads more suited to the programmes they sit within.
“Creatives spend so much time scheduling programming every night, deciding what goes on at 8 o’clock and what is the perfect lead-in to the 9 o’clock show, and what should come at 10 o’clock. Then we interrupt that viewing experience by throwing in a whole bunch of advertisers that are disconnected to the content and also disconnected from each other.”
NBCU has introduced new commercial breaks called Prime Pods (for the first or last ad break in a show) that go some way to solving all these problems. Sharing one minute between two advertisers, these pods are better curated: more thought is going into who appears in them and how well they match the programming they sit within. Early results show higher likeability and brand recall.
NBCU is going a dramatic step further with its contextual intelligence solution, an AI-enabled platform that uses machine learning and proprietary emotional algorithms to automatically work out which of hundreds of emotional attributes should be attached to content. Context modules are created for shows (harnessing closed-captions, scripts and other data the broadcaster holds about upcoming programming) and for advertisements (using a client creative brief and video inspection) so they can be run against each other for analysis and the best matches. The NBCU sales team can work with advertisers at an early stage to find good matches.
It is early days for contextual intelligence at NBCU – the solution was announced last autumn and is in beta trials, on-air in the USA with ads from four agency/client partners chosen for their ability to help test different verticals. Yaccarino confirmed that the impact on ad and brand recall are in line with what Channel 4 revealed from tests of similar technology that has been developed by the UK broadcaster (enabling what Channel 4 calls ‘contextual moments’).
The Channel 4 tests showed that ad recall doubles when ads appear in a break after a relevant scene. (Channel 4 identifies positive contextual moments where a category of goods is used or talked about in a positive manner during a programme).
Yaccarino said contextual intelligence can definitely scale and NBCU is promising that it will be available for use across its portfolio at the 2019 upfronts. She views this as a game-changing technology. “Making this available across a portfolio the size of NBCUniversal’s is quite an exciting opportunity for our marketers,” she said.
Marketers have embraced both the ambition to improve the viewing experience and the execution strategy. Yaccarino is convinced reduced ad load and better contextual relevance will increase the performance of TV advertising.
She told the Future TV Advertising Forum audience in London that ad-supported TV has a great future delivering “full-funnel power”, meaning the ability to influence consumers at the top of the classic marketing funnel (so driving brand awareness or maybe brand affinity and preference) and at the lower end of the marketing ‘funnel’ (so converting awareness and favourability into actions like web searches, a visit to a website or a bricks-and-mortar showroom, or a purchase). “That is a game-changer for NBCU and companies like us,” she reckons.
She predicted that TV advertising is going to enjoy a renaissance at the same time that social media platforms hit a crisis, partly driven by declining usage. TV now combines the magic and the maths, she says, referring to the traditional storytelling power and premium context combined with new data-driven capabilities that span everything from better audience segmentation and targeting to more accurate attribution.
“TV is getting smarter. We can talk about business outcomes instead of ratings. We don’t have to talk about brand safety, which is an easy game for us to win [in competition with advertising platforms that have lower ethical or regulatory standards]. When I think about what a low bar [of expectation] brand safety is, checkmate [to TV],” she concluded.”
She called for broadcasters globally to fight against inertia and work together towards change so that the whole industry, and not just a handful of leading media companies, can deliver on the new combination of “magic and maths”, with full-funnel power. Returning to the impact of NBCU’s own ‘State of the Nations’ event one year on, she says: “I think the whole industry [in the U.S.] has heard the message. We are very happy with progress [for change] so far.”
The use of machine learning to figure out the best place that advertising can be placed across a range of programmes could be revolutionary, subject to sustainable results in the field. Channel 4 could not believe the uplift in ad recall in its tests – literally. It kept checking the figures and methodology used to confirm the outcomes. (See full story here).
In Channel 4’s tests, a scene in ‘The Big Bang Theory’ showed Sheldon (a lead character) forcing a flat-mate to sign a friendship release clause using finger ID on a tablet. One of the ads shown in the next commercial break was for Samsung, focused on a tablet. When viewers were later asked which brand of tablet Sheldon had been holding, with a multi-choice list, a significant number named Samsung when the tablet was, in fact, an Apple product.
Thus, among other things, this concept is so powerful it can generate erroneous recollections that are favourable to the brands who advertise. This was not a fluke. Viewers were also quizzed about a sitcom that featured a medical consultation. Asked later about a poster in the consulting room, many viewers said it featured the cancer charity Macmillan, whose advert was included in the following commercial break. The poster was actually about pregnancy support.
The really exciting thing about contextual intelligence, or ‘contextual moments’, is that the technology can be applied to standard linear television. This is a technology roadmap that is separate and unrelated to programmatic audience discovery, dynamic advertising insertion or addressable TV advertising, for example. There is no reason to think they cannot be used together, but the data-smarts relate to matching creative to content, rather than matching audiences to content.
NBCU views this technology as phase two of its data-enabled advanced advertising journey, with phase one being the use of data to align media buys – especially linear TV buys – with strategic audience targets. You can imagine that for some broadcasters, especially those for whom targeting on linear TV is currently impractical (for technical or commercial reasons) contextual intelligence could be phase one.
Watch the entire Future TV Advertising Forum fireside chat here: