July 11, 2023 | Authored By: Brian Wieser
One of the world’s largest sellers of advertising, in recent years Comcast’s NBCUniversal has grown faster than its direct peers while moving beyond traditional “spots and dots” more aggressively than others. Because television’s linear form is facing secular decline, initiatives to expand are important to monitor for the purposes of understanding the health and trajectory of video-based advertising, still the most impactful medium for many of the world’s largest marketers. Krishan Bhatia is widely credited by the industry for leading NBCU’s efforts in these areas, and so to explore them further, I interviewed him via email over the past week.
Can you talk about your background and what you do or oversee at NBCU? Can you talk about the parts of the business you have been responsible for? How has your experience as a consultant, strategist and digital media executive informed what you are doing now and how you do it?
As President & Chief Business Officer for NBCUniversal’s Global Advertising & Partnerships division, I’m responsible for both growing and future proofing our ad-supported media business. In this role, I oversee ad sales for our streaming and advanced advertising business (including Peacock), our One Platform advertising technology stack, our first-party data & identity platform (NBCUnified), our portfolio of measurement capabilities and ad innovations, our partnerships and business development teams as well as sales operations.
I’m fortunate to have been part of the Comcast family for 18 years and have had a front row seat to our company’s transformation from a distribution company to a global media and technology company. Prior to Comcast, I spent 9 years in the Global Media & Entertainment Practice at Booz Allen Hamilton advising the world’s leading media and technology companies. Many of the lessons learned there have helped me lead more effectively, and I still apply them today. Specifically, a focus on talent and a culture of excellence, leaning into technology to transform businesses and understanding the importance of relationships.
In fact, if there’s one thing that has accelerated our progress and been the basis for our leadership position, it’s the role that partnerships play for us. As the media industry creates more options and complexity for consumers and marketers, developing a strong ecosystem of partners is increasingly critical to success, and it’s something that I’ve been proud to lead at NBCUniversal. In the past five years, we’ve built a network of more than 200 partnerships across every major area of our business and operations – from monetization to ad tech and data solutions to measurement providers and commerce integrations. From Apple to Adobe, Google to TikTok, Snowflake to Trade Desk and many more.
How has the rise of streaming video changed how you specifically do what you do and how you prioritize time and resources?
Streaming is our single most important growth priority and combines the best of television and digital capabilities. When we launched Peacock, we believed advertising had a significant role to play in creating the future of television. We did this by focusing both on the best consumer and marketer experience. For example, we created the Streaming Council that includes top brands and agency partners to help define our best-in-class advertising experience. We leaned heavily into the dual revenue stream model at a time when most other streamers were keeping advertisers out. And it’s encouraging to see our strategy now becoming the norm.
This meant prioritizing leadership, resources and investments in a way that reflected the growth opportunity in streaming, starting many years ago. We had a vision, were early to the game, executed well and are now seeing the returns. Peacock has grown to reach over 70M monthly active users a month – double the average ad-supported reach in the marketplace – and in some cases three or four times that of the competition.
We created entirely new teams that focused on ad innovation, ad experience quality controls, advanced advertising capabilities, measurement certification and first-party data and identity – taken together, these allowed us to execute better and faster and created the foundation that is now accelerating the growth and scale of our streaming business.
Conventional TV advertising including streaming video advertising is, in my view, in permanent decline, simply because the largest advertisers are shifting resources away from TV in favor of other digital platforms. This trend is playing out at an industry level rather than a network or network owner level. However, in recent years NBCU has been relatively aggressive in attempting to offset this decline, establishing partnerships with digital platforms and finding ways to provide services to other TV groups around the world. Do you agree with my characterization of permanent decline for the traditional video advertising business, and can you talk about how you are broadening where NBCU’s advertising business operates?
We may disagree on some of this. When you think of TV today, you’re most likely thinking of the premium content you watch or the device you choose to watch it. Both of that’s television. If you look at the combination of premium video across linear, streaming and digital platforms, it’s still growing. And while consumers have shifted where, when, and how they watch, advertising has had to keep pace and we’re still in the middle of that shift. In our portfolio, NBC Prime content garners a massive audience of 98 million monthly viewers – and when brands add in our streaming portfolio, they have the opportunity to expand their reach to 159 million viewers a month – only 10% duplicated with Peacock. And within streaming, growth is coming from ad-supported streaming, as we have demonstrated successfully with Peacock where the large majority of subscribers are on the ad-supported tier. And based on recent Antenna data, ad-supported SVOD is growing faster overall, representing one third of all sign-ups in 2022.
On the demand side, we believe that the shift towards streaming will enable thousands of advertisers who were historically precluded from advertising on TV to participate in this platform by taking advantage of advanced capabilities that leverage first-party data, targeting and optimization as well as impact measurement. This will fuel growth in ad-supported TV.
And to your point, we also recognized years ago that consumers would engage with our content on different platforms. We invested in partnerships with digital and social media platforms to take advantage of the opportunity to distribute our content, reach expanded audiences and offer advertisers an integrated solution that covers all relevant consumer endpoints.
For example, TikTok’s new Pulse Premiere product allows our clients to align with professionally created content and renowned IP from the entire NBCU portfolio for the first time ever on TikTok. And throughout the Paris 2024 Olympic and Paralympic Games, NBCUniversal will bring custom content to Snapchat, plus content on Snapchat’s Spotlight tab every day of the Olympics. All content will live on the official NBC Olympics Snapchat account. We also have scaled partnerships with YouTube, Twitter and Meta.
Finally, we also recognized that the advertising capabilities and client relationships we have built at NBCU lend themselves to helping other companies monetize their ad supported products. The best example of this is our partnership with Apple, where we are the exclusive ad sales partner for the Apple News and Apple Stocks apps. And we’re also expanding into in-game advertising with our partnership and investment in Anzu.io.
Can you give me your take on the evolution of how data has been used in the buying and selling of TV in recent years? When it comes to TV, where outcomes of spending can be hard to precisely quantify, do you think that a) data is primarily used to determine which TV network owners should get a given share of budgets (and that marketers are simply getting used to involving more data in their budgets, regardless of media) or b) data helps TV grow faster or decline slower than might otherwise be the case?
We can’t understate the importance of first-party data and identity in the transformation of the TV advertising business. Combined with automated ways of buying and selling media, it’s the single biggest driver of growth. Why? Because it allows large marketers to be more effective in optimizing their media spend and it allows mid-size and smaller brands to participate in TV advertising due to the precision and measurability that it enables.
This was the impetus for us to launch a new enterprise data unit in 2021 which was tasked with developing NBCUnified, the first-party data platform that serves our portfolio of industry-leading consumer businesses — including Peacock and the company’s TV and streaming properties, the NBC News Group, Universal Filmed Entertainment and Universal Parks & Resorts.
NBCUnified now covers over 200 million individuals tied to more than 90 million households in the US with thousands of differentiated first-party attributes. This gives us unparalleled data-driven insights into who our customers are, where they’re interacting with our brands, what drives their engagement, and how best to reach them.
With this foundation in place, we’re now working on making our first-party data interoperable with the buy-side through partnerships. This will allow us to work with a brand or agency’s existing data platforms by matching NBCU IDs in data clean room environments in a privacy-minded way. You may have seen our announcements with Dentsu’s M1 platform, GroupM’s Choreograph platform and OMG’s Omni platform for example. And we just announced a partnership with Blockgraph to further our commitment to interoperability.
With third-party identifiers such as cookies deprecating and anticipated platform and policy changes, this will become the best, most sustainable way for advertisers to target and measure advertising. For example, we’ve partnered with The Trade Desk on UID 2.0 and are working with other DSPs on similar integrations.
First-party data and the capabilities and use cases it enables are front and center in all our client and agency partnership discussions. The TV advertising ecosystem is quickly evolving from being dominated by upfront price/volume negotiations towards partnerships that unlock data clean room capabilities, always-on activation, retail media and measuring real business outcomes.
Identity and first-party data is the future of the TV industry.
NBCU has been one of the most vocal in encouraging change in how TV is measured, and then encouraged development of new currencies. Isn’t measurement a natural monopoly? Or put differently: shouldn’t the focus be on improving measurement with the existing provider, Nielsen, in order to enable multiple currencies off of that “truth” set? And isn’t the real problem that no-one – media owners, marketers or agencies – wants to pay more for better measurement?
Yes, there is now a broad consensus in the industry for a multi-currency future to ensure competition, innovation and accuracy.
Accelerating the path toward that multi-currency future is what we’re all working on right now. Essentially, there are three truths that are the catalyst for this acceleration.
First, consumer behavior has changed. What, how and where consumers view premium video has fundamentally changed and the way we measure that needs to reflect both the diversity of audiences and the diversity of platforms and choices that exist.
Second, we have collectively spent far too much on counting eyeballs and not enough on measuring impact. That needs to be inverted. We know advertisers don’t buy ratings, they buy results. The innovation that is happening in attribution and impact measurement needs to be supported and funded.
This brings me to the third point. Technology and data have changed the game of measurement and the solutions we need are already here. We saw this when NBCU had almost 180 companies respond to our RFP call for measurement independence two years ago. All of these companies saw the potential of what it meant to partner with NBCU and get access to our clients, resources and data if certified as measurement partners.
We’re now collaborating with the broader industry by supporting the first U.S. Joint Industry Committee (JIC) which has signed up 20+ buy-side and sell-side members and is working collaboratively to create a multi-currency reality in 2024. Programmers will be harmonizing and making first-party streaming data interoperable for certified measurement companies to deliver against a set of eight weighted criteria that range from transparency to privacy to cross-platform to big data to planning and optimization.
And finally, it’s important to remember that all of this is dependent on full work-flow integration that historically was built around a monolithic solution – crossing order management systems, creative processing systems, ad servers, and publishing systems that required metadata standardization. By focusing our systems, processes and people on building multiple currencies into every step in the process from RFP to measurement we will ensure the necessary shift happens.
Let’s talk more detail about the One Platform. For those unfamiliar, what is it? How exactly does it work, and what are the limitations? Can you characterize how the One Platform helped marketers or helped NBCU, or both?
NBCUniversal reaches 230 million consumers in the U.S. with programming as diverse as The Olympics, SNL, the Tonight Show, Nightly News, The Real Housewives, Bel Air and so much more across 300 plus endpoints spanning streaming, linear television, mobile apps and partnership platforms.
At the same time advertisers and agencies are asking us for more first-party data, more targeting, more automation, better measurement, more interoperability and more transparency.
One Platform solves for both. It’s our technology stack that connects a diverse set of demand channels such as direct sales, agency buyers, DSPs, performance marketing and self-serve platforms to all our content and audiences across those 300 plus endpoints. It’s a single ad decisioning engine that finds audiences, creates plans, delivers and optimizes campaigns, leverages innovative ad experiences and measures the results.
It comprises a suite of integrated technology solutions across four key areas: Data & Identity, Activation & Automation, Ad Innovation and Measurement. Automation and data-informed decision-making is transforming the agency planning process, which has historically been a very manual process.
We’ve had to modernize our entire TV system in a variety of ways. This includes moving from panel-based terrestrial measurement to running on big data, where marketers can bring in customer data using privacy-minded cleanrooms and look at cross-platform overlap between their customers and our audiences. And then run their campaigns, utilizing our data-driven ad innovations and AI-enabled optimization tools across all endpoints. It’s allowing us to move from preformed logs closer to real-time decisioning and buying activation. And from panel-based measurement to attribution, again using big data and privacy-minded tech. It helps us deliver scale, efficiency, and automation for our clients.
And here are the results. Advanced advertising is the fastest growing segment of our linear business. And after last year’s upfront we announced that 40% of commitments were made on non age/gender currencies and we expect that to grow significantly this year.
In our streaming business, 62% of our business is now transacted on advanced audiences and programmatic activation. And with our continued investment in first-party data, interoperability and new currency certification, we believe this will be how the vast majority of clients and agencies invest with us.
Finally, One Platform also democratizes access to TV and premium streaming content for marketers of all sizes. We’re doing this in a few ways. For example, making more of our premium live sports events available programmatically. During the World Cup final, we had close to 100 new marketers submit more than 6.7 million bids in real-time – broadcasting their messages to almost nine million concurrent viewers. We’re also in beta with Peacock Ad Manager, which is a turnkey self-service buying platform, that helps DTC, SMB, performance and local marketers evolve beyond search and social into CTV for the first time and gives businesses direct access to our content across all our screens.
You announced that you are expanding the One Platform to global markets where Comcast doesn’t have much of a footprint outside of its ownership of Sky and FreeWheel. First, why do this everywhere? And second, how will the One Platform work differently abroad? Can we talk about other international trends you are paying attention to? As international TV advertising is probably going to grow faster than the US are there other opportunities for you to invest separately from where Comcast or Sky have a footprint? Are there more opportunities for you to work with FreeWheel as NBCU vs. Freewheel going into a market alone?
Our commitment to global expansion has been a multi-year strategy through NBCUniversal’s own internationally distributed networks as well the acquisition of Sky back in 2018. We continue to see a growing opportunity to serve marketers and agencies in the same way that we serve them in the US marketplace on a global basis.
Until now, there really has been no platform that’s been able to pull together a global footprint and audiences at scale, by leveraging local content that creates deeper connections with local audiences, in a way that makes it easy for marketers to activate campaigns on a global basis.
With this latest initiative, we’re combining the learnings from our partnership ecosystem and our One Platform capabilities in the U.S., with our deep partnership with FreeWheel which has a strong foothold across key international markets.
If you’re a premium publisher, you’re looking to compete more effectively for global dollars, across multi-market and pan-regional. And this partnership will also allow publishing partners to engage more effectively at the local level. And FreeWheel’s technology is underpinning the execution.
And for marketers, this global offering will provide marketers with the ability to execute advanced advertising campaigns at scale across leading premium networks and geographical boundaries in a more simplified way to maximize return on investment. Marketers will have the ability to transact via direct buys as well as programmatic to manage their multi-market, multi-screen video campaigns to drive incremental reach and activate their campaigns across the full purchase funnel.
By bringing together leading local broadcasters and publishers like ATRESMEDIA in Spain, Bell Media in Canada, Seven West Media in Australia, Sky Media in the UK, TF1 in France, TBS in Japan and many more, we are helping scale the premium video ecosystem and building the foundation for greater industry advancement and collaboration at an international level.
Omnicom Group’s participation and commitment at launch is a sign of how global agency holding companies see the opportunity and are leaning in. One Platform’s expanded global offering will be fully operational and ready to transact starting October 2023.
How important is OpenAP for NBCU? Can you talk about what it is and how it’s being used? Similarly, is it contributing to growth for anyone, or is it simply helping marketers to manage their spending the way they want to spend?
OpenAP is a significant investment NBCUniversal has made to scale the TV and premium streaming ecosystem in the U.S. Alongside Fox, Paramount, WBD and a minority investment by Snowflake, we’re laying the foundation for advanced advertising in premium video across the industry. Since its initial formation, the platform has become the norm for agencies and marketers to activate data-driven linear campaigns across programmers in a standardized and scalable manner. OpenAP is projected to eclipse $1B in advanced advertising campaigns in the next 12 months. CEO David Levy and the team have done an incredible job executing an ambitious roadmap whilst managing a diverse set of buy-side and sell-side stakeholders as well as technology partners.
Based on its success in creating a trusted partnership ecosystem, OpenAP was also instrumental in the formation of the U.S. Joint Industry Committee earlier this year.
As mentioned before, The Joint Industry Committee is a critical initiative that will further the partnership across the premium video marketplace, to create a scalable multi-currency ecosystem by 2024 by certifying measurement companies with a common set of requirements and inform measurement with critical first-party streaming data made interoperable by the participating programmers.
OpenAP’s role is to provide the infrastructure that manages this data for the JIC, making it foundational to how the JIC operates and will ultimately succeed.
Just like the buy-side challenged us and other programmers to standardize the way advanced advertising campaigns were planned and executed, we believe measurement needs to adhere to standards that the industry develops together.
Story originally published on Madison and Wall.
