NBC is putting its money where its mouth is.
The broadcaster on Thursday revealed it would commit to sell $1 billion in targeted media based on audience guarantees in time for the 2017-2018 upfront.
Although that figure only represents about 17% of the estimated $6 billion NBC transacted through advance commitments last year, it’s still a colossal sum and the first time NBC has assigned a dollar amount to audience-based inventory sales. (The broadcaster began issuing data-driven guarantees last upfront season.)
The move suggests a higher degree of confidence in its ability to forecast audiences across its platforms and properties.
“We knew that getting into the business of guaranteed … was something advertisers had really only been able to get from the digital or tech platforms,” Linda Yaccarino, chairwoman of advertising sales and client partnerships for NBCUniversal, told AdExchanger.
“We knew the size of our portfolio would give us confidence to be able to guarantee outcomes,” she added.
Relative to NBCU's usage, “outcomes” do not necessarily refer to conversions, as it often does in digital, but rather more precise segments than the age and gender demos of traditional upfront negotiations.
What does "guaranteed" really mean here? Basically the network is pledging to guarantee buyers a greater concentration of their target audiences across the NBC or combined NBC (including digital publishing partnerships like BuzzFeed and Apple News) portfolio.
For instance, if Toyota wanted to reach a higher volume of intenders in-market for a lease or a minivan, NBC’s guarantee would assure its ability to do so.
The broadcasting giant can make these guarantees because of its scale across social partnerships, its data products fueled by Comcast set-top box data and the size of the NBCUniversal portfolio – which include NBC properties as well as digital pub partnerships with, for example, BuzzFeed and Apple News.
Like last year, if an advertiser doesn’t hit an agreed-upon percentage of its target audience, NBC uses its data-driven tool, Audience Targeting Platform, to find that viewer elsewhere and/or issue commercial time to recoup any losses.
But Yaccarino said results are exceeding expectations: “We delivered on the guarantees we had agreed on with our advertisers and the renewal rate was virtually identical this year, so people are coming back for a second round.”
NBC Advances Linear Programmatic
NBC will also expand its linear programmatic initiative, NBCUx for Linear TV. Last year, that inventory was only available in the scatter market; this year, it will be available in the upfronts.
This inventory, however, is not available in a biddable exchange. Instead, NBC’s demand-side partners (AOL, Adobe’s TubeMogul, Videology – and more, though NBC didn’t specify) get an inventory schedule via API. Buyers can bring in first- or third-party data and target NBC audiences beyond just age and gender.
Advertisers can buy this linear programmatic inventory a la carte, or purchase it bundled with a sponsorship or an upfront commitment.
Yaccarino predicted the 2017-2018 upfront will be a seminal year for hybrid deals. Recent developments, like Facebook’s measurement mishaps, could bode well for NBC.
“When you think of all the unfortunate chaos that’s going on in the digital community with measurement, viewability, sound off or sound on, one second, three seconds, five seconds, there’s been a tidal wave of advertisers who are shifting back to TV advertising,” she said.
“It’s why P&G and the IAB are putting a gauntlet down,” she added. “What’s tried and true and important is the need for reach and frequency, and no one ever challenges the power of combining an advertiser’s creative alongside premium content.”