×
You will be redirected back to your article in seconds

NBCUniversal Vows to Cut Primetime Ads by 20% Across All TV Networks

NBCUniversal is taking a less-is-more approach to the economics of TV.

The Comcast-backed media conglomerate, which operates NBC, Telemundo, USA, MSNBC and E!, among other TV networks, intends to cut the number of advertisements in its commercial pods during original primetime programming by 20% starting in the fourth quarter, and the amount of ad time during those primetime shows by 10%, said Linda Yaccarino, chairman of advertising and client partnerships, in an interview. Overall, the company will trim the commercial loads in more than 50 original primetime shows across its portfolio of networks, which include series like NBC”s “This Is Us” or MSNBC’s “The Rachel Maddow Show” or any of the sundry Kardashian family series on E!. Commercials in repeats would not be affected.

“There are more and more consumers, whether it’s from Hulu or the Netflixes or Amazons of the world, who are liberated via technology” from having to watch the sheer number of advertisements shown on traditional television, said Yaccarino. “TV networks would be crazy to believe that anything other than commercial overhaul was anything other than inevitable.”

NBCU’s commercial cutback shows the far-reaching effects the viewing habits of a rising generation of new-tech couch potatoes are having on the business of television. Viewers are increasingly accustomed to seeing fewer ads – and sometimes none – when they stream their video favorites. No one who subscribes to Netflix has to watch a traditional commercial for a can of Coke or a Swiffer while binge-watching “Stranger Things,” for instance, and even a viewer who takes up the ad-supported version of Hulu needs reckon only with a handful of commercials. Citing Nielsen research, NBCU said more than 400,000 advertisements had been added to TV networks over the past five years.

NBCUniversal isn’t the first TV company to try its hand at such techniques, which seek to reduce the amount of “clutter,” or advertising and promos, that inundate most TV aficionados. Time Warner’s Turner in 2016 launched a plan for its TruTV cable network under which shows would run longer while being interrupted with fewer commercials. The company’s TNT has run some of its original drama series with reduced ad loads as well. Viacom has in recent years signaled a willingness to cut back on ad time. Fox Broadcasting has run “Empire” with limited ad time across its four seasons on air, and intends to air a March 18th broadcast of its “Family Guy” with fewer ads.

TV networks have been testing the concepts for years. In 2008, Fox Broadcasting unveiled a plan to run two new dramas – “Fringe” and “Dollhouse” – with fewer ads. The programs would “have more entertainment for the consumer,” said Jon Nesvig, then president of ad sales for the network, during a presentation to advertisers,  “and more impact for your commercials.” Back then, the idea was to keep viewers who had grown accustomed to skipping past ads with the use of a DVR. In 2018, however, TV networks are trying to grab on to ad dollars that sponsors could instead allocate to digital-media venues. In the past two TV “upfront” markets, when U.S. TV networks sell the bulk of their ad time, TV benefited while digital outlets like YouTube and Facebook grappled with advertiser concerns about off-color content and shaky measurement policies.

And yet, ad loads have recently increased. Brian Wieser, an analyst for Pivotal Research who tracks advertising minutes on TV, found national commercial loads across the industry rose 3.9% on average in January to 11 minutes per hour – a sign that TV networks need to run ads more often to generate the impressions they’ve guaranteed advertisers while audiences erode. “I can’t say it has been successful based on the data I have seen,” said Wieser about reducing ads. “Budgeting for TV will generally be independent of the quality of the ad units available, which means even if reducing is the right thing and networks will be better off in the long-run if they reduced loads, the short-term impact is probably negative, which is why we are seeing continuous increases in overall ad loads, despite individual networks reducing them.”

NBC has evidence to the contrary. Ad prices for”Saturday Night Live” have soared since NBC agreed in 2016 to cut 30% of the show’s commercial load. To be sure, the program now airs in primetime in some parts of the country and has gained new relevance in the wake of Donald Trump’s election to the White House.

But that show’s recent direction may serve to answer the question of how NBCU expects to generate the same or even more advertising revenue as cuts back on individual ads. NBCU intends to introduce a series of new ad formats that Yaccarino said would be of more value to advertisers than traditional 30-second commercials.

One of these is called a “prime pod,” a 60-second piece of national ad time that will appear in the first or last break of a show that will feature just two sponsors who can run commercials that play off the programming they support, as well as other elements. NBCU has developed technology that can identify themes and segments with which marketers can align. The company has also developed commercials that allow advertisers to provide real-time commentary in ad breaks just as they might on Twitter, or to embed pieces of content developed by digital partners such as Vox Media, Buzzfeed or Snap (all of which count NBCUniversal as an investor). Another one will allow the TV broadcast to stay on the air in some fashion while commercials or ad messages play in other parts of the screen. NBCU’s version would have the ad messages play off the content next to which it appears.

NBCU intends to emphasize the ability of the new formats to drive consumer recall, engagement and purchase conversion, Yaccarino said. “These are performance metrics that matter,” she said. “I continue to be unsure of what a ‘C3’ or a ‘C7’ ratings tells you three weeks after the fact other than your age and gender split,” she added, referring to the industry’s  current measurement standard of measuring views of commercial breaks up to three or seven days after they air. “This is a whole sales effort to adopt a new vocabulary and conversation.”

The announcement marks the culmination of two years of testing by NBCUniversal, said Yaccarino. And it marks a new step in a quest she has pursued for years. While overseeing ad sales for Turner’s entertainment networks in the earlier part of the decade, she started an 18-month initiative to build new software and hire staff to tag specific segments on movies and TV shows so that advertisers could identify specific moments for relevant messages, like a tissue commercial during a sad TV moment. “That was a very manual effort,” said Yaccarino. NBCU’s latest attempt to help marketers identify such stuff will be powered by artificial intelligence.

 

 

 

More TV

  • TV Ratings: 'Batwoman,' ‘Kids Say the

    TV Ratings: 'Batwoman,' ‘Kids Say the Darndest Things' Tick Down

    After solid debuts last week, both The CW’s “Batwoman” and ABC’s revival of “Kids Say the Darndest Things” with Tiffany Haddish dropped off a little in week 2. The Ruby Rose superhero show fell 36% from a 0.5 rating to a 0.3, and lost around 400,000 total viewers from week 1. “Supergirl” followed it up [...]

  • Rafael-Cobos

    ‘The Plague’ Creator Rafael Cobos Talks Season 2, Screening at Mipcom

    MADRID — Writer-creator Rafael Cobos hosted the first market screenings for Season 2 Movistar Plus’ tentpole series “La Peste” (“The Plague”) at Mipcom this afternoon. Season 1 bowed in Spain in January 2018 to the best opening results of any series, aired or available, on the Telefonica-owned pay TV giant, who have promised that Season [...]

  • Notre-Dame de Paris cathedral is seen

    Pathe, Vendome Pictures Join Forces on TV Miniseries About the Notre-Dame Fire (EXCLUSIVE)

    One of Europe’s most revered film groups, Pathé, is stepping into TV drama with Philippe Rousselet’s thriving Vendôme Group to co-produce an ambitious miniseries retelling the devastating fire that ripped through the Notre-Dame cathedral in Paris. The companies are partnering with U.K.-based Xavier Marchand’s Moonriver TV to co-develop the project, surely one of the highest-profile [...]

  • Donald Trump Hollywood Racism

    White House Says Trump 'Strongly Condemns' Violent Anti-Media Video

    President Donald Trump hasn’t yet watched a violent parody video in which he’s depicted killing figures representing media outlets and his political rivals, but the White House says he “strongly condemns” it. “Re: the video played over the weekend: The @POTUS @realDonaldTrump has not yet seen the video, he will see it shortly, but based [...]

  • How Mipcom is Adapting Through 'The

    How Mipcom Is Adapting to Wider Content Offerings Through 'The Streaming Offensive'

    With the rise of streamers rapidly changing the television industry, it was inevitable that the biggest TV market would have to address the evolution. A year after exploring the so-called big shift in television, the theme of this year’s Mipcom conference is the Streaming Offensive, with sessions from speakers including Amazon Studios’ head of international [...]

  • Ronan Farrow Noah Oppenheim

    NBC News Rebukes Ronan Farrow: 'We Have No Secrets'

    The battle for facts between Ronan Farrow and NBC News continues. The president of NBC News pushed back on some of the explosive claims made by Farrow Monday, calling into question an allegation that the NBCUniversal news outlet knew about sexual misconduct by former “Today” anchor Matt Lauer before he was fired in 2017 – [...]

More From Our Brands

Access exclusive content