At ‘One22’ NBCUniversal Sees Scale As Essential To TV Ad Future

Earlier this week NBCUniversal – at the hallowed Studio 8H no less – rolled out its “OnePlatform” to a TV advertising industry clearly jazzed to be meeting in person after two mostly Zoom-filled years. In rolling out their vision of the future, NBCU unveiled new data analytics, new tech platforms, and new business processes for buying and selling media. But one key attribute of success sounded very familiar to the TV business: size still matters. If the NBCU’s “One22” confab generated a word cloud, “scale” would have been one of the most prominent of its terms.

The forces driving all this focus on innovation are the threats to this precious scale. Just this week, Michael Nathanson, one of the most well-respected media industry analysts, published a report reinforcing the significant audience declines in linear TV (broadcast and cable networks) over the last two years. Nathanson catalogued an average of 18% decline in cable audiences in just 2022, as viewers of everything but live news and sports have adopted what Nathanson calls a “streaming-first” mindset. As NBCU and no doubt its fellow legacy media companies squarely recognize, the pursuit of true scale demands a seamless integration of linear and streaming media sales processes from beginning to end. It’s all TV now.

In the face of this reality, NBCU’s vision, shared with its technology partners, was one of optimism, built upon four key pillars where it sees innovation as essential to TV advertising’s future: data and security; activation and automation; ad experience; and measurement. Despite – and in fact because of – the explosion of consumer choices and fragmenting of audiences, aggregating scale is an irreplaceable requirement for each of NBCU’s initiatives. There are 14,000 streaming services in the Roku app store, but this isn’t the game for most of them. For not only big media companies but big advertisers and big agencies operating in a world of roaming digital giants, it takes size to effect meaningful change.

Scale of Audience

The messaging here may not be relevant to the small businesses that make up most digital-only advertisers. But if you’re Procter & Gamble, Pepsi or McDonald’s, you’ve got to move a lot of product and reach a lot of people to move the needle on your business. It’s increasingly tough to find in TV alone, which is why NBCU emphasized its one billion consumer touchpoints, including 200 million individual IDs drawn from not just NBC broadcast and cable networks but from 30 million Comcast broadband subscriptions, 40 million Fandango users (on a Comcast-owned app), millions of visitors to Universal’s theme parks and at least 25 million active accounts for Peacock, NBCU’s streaming platform. It’s an aggregation game very familiar to NBCU’s media competitors from Disney (thanks to acquisitions of Fox among others), Discovery (with its soon-to-close Warner Media deal) and Paramount (with the blending of Viacom and CBS). And it’s table stakes for the advertising future.

Scale of Measurement

NBCUniversal has been at the forefront of trying to shift the TV industry away from a reliance on Nielsen ratings as the standard currency for buying and selling advertising. At One22 Linda Yaccarino, NBCU’s Chairman of Ad Sales & Partnerships, characterized its expectation that with a new form of measurement “if we score a touchdown, we want all six points.” NBCU announced that this year’s upfront marketplace, kicking off formally in May, will feature data from iSpot.tv, fusing linear and digital TV consumption, as it’s foundational currency. Now that’s breaking news.

At its very heart of this shift lies a massive increase in scale – from relying on the viewing behavior of only 40,000 Nielsen panel members to accessing viewing data from 40 million smart TVs. For this to work, it will depend on enough of those TVs being set up to transmit that data and feeding the system in the real-time fashion that the digital world has come to expect. For those who remember the old Fram oil filter ads, the message to ad buyers was “pay me now or pay me later.” NBCU’s head of ad measurement Kelly Abcarian noted that you better be ready to prepare your people, process and technology for this new world now as even Nielsen is doing away with its panel approach by 2024.

Scale of Marketplace Opportunities

The major media companies spent decades living off predictable business models in everything from theatrical box office to the dual revenue streams of advertising and sub fees in cable TV. As they now seek to offset the slowing revenues from these traditional businesses, NBCU and its media brethren have begun ramping up investments in streaming and exploring a range of other opportunities from gaming to the metaverse to NFTs. NBCU is bullish on live streamed ecommerce, which will likely forever be known as the “how do I order Jennifer Aniston’s sweater from Friends?” business. Take it from someone that negotiated interactive TV deals in the 1990s – it has been a space with far more promise than performance for years. But according to Josh Feldman, NBCU’s head of advertising and marketing creative, this is a $500 billion business today in Asia, and one that barely exists in the U.S. As Feldman noted, in partnering with global brands, agencies and content producers, they’re trying to make it “dangerously easy for you to spend money” while watching NBCU content.

Scale of Industry “Buy-In”

All the best-laid plans by NBCU and its tech partners will be for naught unless a significant portion of the ad industry gets on board. It isn’t much of a stretch to note that inertia has been one of the most powerful forces at work in ad agency world at least since the rise of digital giants. NBCU’s much-publicized search for partners its Nielsen-alternative venture surfaced 120 RFP respondents, so there’s certainly plenty of hopeful collaborators here, but the big four agency holding companies dominate media buying decision-making.

Agencies still spend big dollars on trying to win new business, but will they spend what it takes to integrate with new technology partners, connect previously disparate operating systems, train employees and automate today’s manual workflows? NBCU announced the going-forward participation of at least one big-time holding company partner in Dentsu, and at One22 highlighted benefits of these innovations such as a 20% time saving on responding to RFPs. Of course, in the agency world staff time is money. Is the scale of the benefits enough to compel the needed investments from hide-bound global institutions? Time will tell.