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NBC to guarantee advertisers will reach their target audiences
[NEW YORK] For decades, TV networks sold commercials based on broad viewing demographics, like how many 18-to-49- year-old women watched "Law and Order." Now they're starting to make specific promises.
Starting this "upfront" season, Comcast Corp's NBCUniversal will guarantee that ads are seen by more targeted audiences, according to a statement Thursday. For example, if Toyota Motor Corp buys a 30-second spot on "The Voice," NBC would pledge a certain number of viewers in the market for a mid-sized car - and would offer Toyota free commercial time if it didn't get enough viewers.
For the past year, the network has used data from a variety of sources - Comcast's cable set-top boxes and retail and auto dealership sales - to tell advertisers which network and TV show would be more likely to include their target audience. But NBC still relied on age and gender data from Nielsen to actually sell commercials, said Mike Rosen, executive vice president of advertising sales for news and Hispanic groups at NBCUniversal.
"We have the confidence now that we can guarantee something that was in part more to inform than to become the currency," Mr Rosen said in an interview, adding that most of NBC's commercials will still be sold based on Nielsen data.
TV networks are trying to mimic the precision of the Web - where consumers are served personalized ads based on their browsing history - to win over advertisers who are spending more money online with Google Inc and Facebook Inc. Time Warner Inc's Turner Broadcasting and Viacom Inc have started selling ads based on more than just gender and age.
By promising a phone company, for instance, that TV ads will be seen by consumers looking for a new wireless plan, networks are hoping to boost advertising revenue even as ratings decline. Last year, ad revenue fell 1.7 per cent at NBCUniversal's cable networks and 2.4 per cent at its broadcast network compared with the year earlier. And spending on digital advertising is expected to surpass TV advertising this year, according to Magna Global.
NBC's new promise to marketers comes weeks before the start of the upfront season, when TV networks sell about 70 per cent of their advertising each year. NBC recently announced it would jointly sell ads with Vox Media, and last year began selling commercials for CNBC's daytime audience based on data from Cogent Reports instead of Nielsen.