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NBCU Plans to Cut Ads by 10% in Primetime - Broadcasting & Cable

NBCU Plans to Cut Ads by 10% in Primetime

New pods will feature just two commercials
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NBCUniversal said it plans to decrease advertising time by 10% in original primetime programming on all of its broadcast and cable television networks and reduce the number of commercials per break by 20%.

The change will be effective in the fourth quarter, when a new fall season of programming will start. The new ad format will mean that original programs will be 10 minutes longer, which NBCU says means 15 more days’ worth of content for consumers over the course of a year.

As part of its plan, NBCU is creating a 60-second Prime Pod that will run in the first or last break of a show and contain messages from only two advertisers.

Related: Watch NBCU Video on Reimagining The Commercial Experience

NBCU is also looking to make the commercials more effective by using artificial intelligence to make the ads in the Prime Pods more contextually relevant.

The move comes at a time when more viewers are moving to commercial-free platforms llike Netflix and watching more programming on demand, where they can skip or fast-forward through ads.

Related: Viacom Says Ad Revenue Growth Will Come After Loads Are Reduced

TV ad spending has not been growing while growing digital competitors like Google and Facebook are increasingly turning their attention to creating original video content.

Other programmers have cut or talked about cutting advertising loads, including Turner and Viacom. Other programmers have tested six-second ads. In sports, split screen ads have become more frequent as a device to keep viewers tune in.

Related: Commercial Loads Rose in December

NBCU’s plan could be the biggest attempt yet to change the commercial environment.

Linda Yaccarino, NBCU’s chair for advertising and client partnerships, has been talking about the need for the TV business to improve the viewer experience by making TV smarter.

She said the ad community has been working with her for two years on elements of the plan. “I don’t think the community will be surprised,” Yaccarino said, adding that they’ll be “thrilled with the scale with which we’re approaching it.”

With fewer ad minutes, NBCU will have to get advertisers to pay more.

“The market determines value,” Yaccarino said. “An opportunity like the Premium Pod, the first new ad product that bring together AI with emotional capabilities — think about it as an emotional algorithm for TV — is a uniquely valuable product available at scale.”

NBCU said the new formats should result in a better experience for viewers and more effective advertising for marketers, producing more recall, more attention and more purchase consideration for their products.

Since the new products should deliver better performance, NBCU is willing to base its pricing on those metrics, rather than traditional ratings. But it will not guarantee both, Yacarrino said.

NBC is also looking to improve cut down on the clutter in its other primetime ad pods by developing new format designed to integrate the ads more closely with programming.

Among the formats are:

· Primetime Bridge, which is a unit that will take viewers from one program to the next;

· Scripted Commercial Launch, in which a scene from a program, such as a character walking into a coffee shop, seamlessly moves into a commercial, possibly for a coffee retailer;

· Interactive Picture in Picture, which will provide continued access to programming content along with a commercial message;

· Social Commercial, in which NBCU will work with an advertiser to incorporate real-time comments into the advertising; and

· Show Within a Show, in which NBCU works with an advertiser to provide behind-the-scenes materials or other content relevant to the program for use during the commercial break.

NBCU said research shows that innovative advertising products increase consumer engagement by more than 20%.

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