NBC Peacock : What It Means for OTT & CTV Advertising
Updated: Jul 24
Note: For more information on the newest ad formats and their creative, strategic and audience considerations, download our New Ad Formats for H2 of 2020 eBook.
NBC Peacock has just been released, and unlike its competitors in the streaming wars, offers a free ad-supported tier that much of its audience will find attractive. What does this mean for advertisers?
This blog post will cover Peacock's predominantly ad-supported streaming service's new ad formats and serve as a guide to its creative, strategic and audience considerations when deciding if this placement is right for you. It will also provide some insights into the future of OTT and CTV advertising in the coming years as consumer habits expect to evolve.
Image courtesy of Peacock
What Does Peacock Bring to the Table?
Unlike the other recently launched services, Peacock has a free tier, which may boost its initial reach amongst the heavily saturated streaming market. Amongst the newbies in the market include Disney+ (launched in November), Quibi (launched in March), HBO Max (launched in May), and, now, Peacock. With high unemployment impacting consumer spending, a free video service is likely to be very welcome.
Peacock believes that it can cut through the clutter of subscription-based video platforms with a freemium model that includes a free, ad-supported version and a paid, ad-free version. Peacock will cap its ad load at 5 minutes per hour of content. NBCUniversal chairman Matt Strauss said that NBCUniversal is looking to strike licensing deals that expand its library of programming, including one with ViacomCBS. Peacock is also leaning into channels around properties like Saturday Night Live, The Office, and Jimmy Fallon.
Why Advertise on OTT & CTV?
Peacock is the latest of many streaming services to have been released during the shelter-in-place mandates. Launched on July 15th, it is the newest competitor to join the fight for consumer attention on connected TV, a fight now dubbed "the streaming wars".
The surge in new streaming options is not surprising. In January 2020 The Association of National Advertisers and Innovid released the State of Connected TV Report 2020 which predicted impressive adoption rates, with the number of households using connected TV services set to increase by 82% by 2023. On top of this, the proportion of households severing their connections to traditional cable mediums was forecasted to increase by 44% over the same period, further accentuating the sector's cachet for advertisers.
However, what nobody predicted was the coronavirus pandemic that effectively set over 94% of the American population into some form of lockdown. With consumers bored at home and looking for entertainment, the launch of connected TV is now likely to quickly get rooted into longterm consumer viewing habits.
What New Ad Formats Has NBCU Released?
NBCU unveiled new ad formats designed to hold viewers’ attention and that can be adapted on both linear TV and its new streaming platform. These new formats touch on how NBCU connects brands to talent and the right content, help brands tell a thematic story, incorporate brands’ own aesthetic into the program leading into a commercial break, highlight advertisers’ charitable causes and brings brands together with Gen Z.
After previously rolling out new formats like prime pods (its 60-second pod of audience-targeted advertising) and ShoppableTV (shoppable ads), NBCU has continued to “create opportunities for marketers to take advantage of, that are both a better viewing experience for our fans and consumers at home, while also creating a more effective ad environment for our advertisers,” said Josh Feldman, Executive Vice President, Head of Marketing and Advertising Creative for NBCUniversal.
A one-time reunion special of the fan-favourite comedy satire 30 Rock made use of all new ad formats in the one-hour feature. NBCU used the episode to highlight non-traditional ad formats. Instead of typical ad breaks, NBCU ran promos for its own brands, with sizzle reels of its networks and shows. Similar to the conventional NBC upfront in recent years, where the program is broken down by genres of content, each commercial break highlighted a different part of the company. Linda Yaccarino, Chairman of Advertising & Partnerships at NBCUniversal, says the premise for the episode was "based in this direct-to-consumer era where we can bring the upfront to viewers and marketers simultaneously."
The new formats fall into the following categories:
The Talent Room connects brands with talent across the NBCU portfolio that is the best fit, whether that is cat lovers or chefs. “An influencer isn’t just about having the highest-rated television show; an influencer is about having a fan base that’s dedicated to them and passionate, and wants to hear what they’re saying,” said Feldman.
1:1 Talent Surprise allows viewers and talent to interact via a branded video chat during an ad pod, courtesy of that night’s sponsor. “It’s a way to get our fans more directly associated with the talent in real time,” said Feldman, but “we will only do it with the appropriate talent and brands. It’s got to be the right match.”
Set on Set, will bring viewers onto a TV set with talent to hear a brand’s message.
ProductSync, a recommendation tool for marketers using AdSmart’s audience data to optimize where their products appear in custom content or product placement. For example, for travel brands, ProductSync could find which NBCU shows overindex the highest on high-frequency travelers.
The (This) Matters format gives brands like health care, tech, style and personal travel an opportunity to tell a thematic story, while 1221 Films will offer long-form branded content opportunities for marketers.
Brand Experience takes product integration to a new level where marketers work with NBCU writers, producers and talent to add their brands and stories into the portfolio’s shows.
Next Gen News, enables Gen Z creators to make news stories for their generation with a brand overwriting the program. However, Feldman said, this is on pause during the pandemic until schools can reopen and the company is able to work with students on the format.
Brand Vision, an example of a format that “draws a bigger spotlight to a brand’s creative,” said Feldman, will use a brand’s signature color palette to connect the programming leading directly into the ad pod.
Pods With a Purpose will use the ad pod to spotlight charitable causes or a brand’s mission statement, while Experiences at NBCU offers experiential opportunities for fans and brands with brand integrations at virtual and in-person events.
Where is Connected TV & OTT Heading?
Another point to consider is the implementation and adoption of 5G, which will also impact the streaming industry. The faster and more reliable network will prime mobile for the heavy demands of streaming. At this stage, it would be too soon to speculate which way the Internet TV industry will sway once 5G arrives but global broadcasters seem to already see the value in it with 92% expecting to adopt the technology in the next 5 years.
The biggest question is if mobile service providers and broadcasters can work together and connect their respective end-users to hop onto the 5G wave. However, the value chain of 5G internet will grow complex, and Internet TV is slated to become the mainstream by 2025.
What Does this Mean for Advertisers?
Unlike traditional TV commercials, OTT and CTV offers a far greater degree of targeting, personalization, and storytelling across multiple ads served in sequence to the same individual. More importantly, connected TV delivers a degree of actionable data and insights not possible with traditional advertising, informing future efforts in audience profiling, media planning, and creative design.