- NBCU is introducing a new currency for TV advertising that takes into account both traditional live TV viewing of ads and viewing on digital platforms.
- That would mark a fundamental shift in TV ad sales.
- The move is being driven by TV giants aiming to make sure they gets as much credit as they can for the size of their hit shows, while also protecting their lucrative ad business.
- To pull this off, NBCU is cobbling together data from a variety of research firms.
NBCUniversal wants to fundamentally change how TV advertising is bought and sold.
So the media giant is set to introduce CFlight, a new TV ad currency that the company says will better take into account TV viewership of all kinds, whether people watch shows live, on demand, or through a DVR.
NBCU say that CFlight will provide advertisers with a composite metric when they run ads on shows like "Will and Grace," that reflects when people watch on their own time. That number will be pieced together from multiple third party research companies, including Nielsen, Moat and ComScore, as well as from a variety of platforms including Roku and Hulu.
That sort of stitched-together number flies in the face of years of tradition and inertia in the TV ad business, which has typically relied solely on Nielsen ratings data to track viewership for TV shows and cut ad deals.
"This is a based on the fact that no single measurement provider has emerged that is able to measure all commercial impressions," said Krishan Bhatia, NBCU's executive vice president, business operations and strategy. "We are taking this into our own hands."
Of course getting advertisers to change how they pay for TV ads, even with just a single media company, may not be easy, particularly when the data being used comes from different sources.
Plus, NBCU wants CFlight to be based on ad impressions, or the number of instances an ad is shown to people, rather than classic ratings points, which are centered on adding up how many people watch a show.
But Bhatia said that his team has spent several months working with major ad buyers to get them ready for this change, and how transactions will work in practice. Several major digital ad buying agencies have already given CFlight their blessing, he said.
"We’ve done a lot of the groundwork," he said. "And I think from a client perspective, they understand this immediately. They are already looking at their marketing spending holistically."
NBCU, which owns the NBC broadcast network as well as cable networks like E, SyFy and USA, has been vocal about its dissatisfaction with Nielsen and how the industry has been moving too slowly in its eyes to measure TV viewing on multiple screens and at varied times.
Chairman Robert Greenblatt spoke about how much of the audience for a hit show like "This is Us" accumulates well after a show airs live on NBC last November at Business Insider's Ignition conference.
In fact, during the recent Winter Olympics, NBCU reported on the total audience for the games using multiple sources: a metric it called Total Audience Delivery.
While that initiative was primarily about counting how many people watched the Olympics on different screens, CFlight is basically aimed at translating that dynamic into a currency.
With this move, NBCU clearly wants to make sure that the TV industry protects as much of its turf as possible. The TV ad business is still a $70 billion market. Yet an ongoing decline in live TV viewing over the past few years has helped fuel the industry's first dip in revenue in nearly a decade.
Plus, digital titans like Facebook and YouTube are increasingly vying for TV ad budgets. Bhatia emphasized that NBCU only plans to count digital ads that are fully completed by viewers. "That is a significant difference for digital counting today on most digital platform, which is sometimes for just a few seconds".
NBCU's hope is that the rest of the TV industry follows suit.
"Everyone has been talking about this," said Bhatia. "But we've all been waiting empty handedly for years now."
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