NBC to Include Digital Viewing in Ad Guarantees for Winter Olympics, Offer Packages Combining Super Bowl
NBC Universal was caught off guard during the 2016 Summer Olympics in Rio. After making bullish predictions regarding viewership of the games, the media giant found that it hadn't fully accounted for the rapid change in TV viewership habits. Ratings were lower than expected, but, NBC said, there was more viewing online.
The situation was further proof of just how complex it is to find audiences, especially younger ones, no matter where they are watching, and deliver those people to advertisers.
Now, one year out from the 2018 Winter Olympics in PyeongChang, NBCU wants to ensure that doesn't happen again. So instead of guaranteeing audiences for advertisers based on a household rating, which is how ad inventory in the games is typically sold, it will now also account for the viewing that is taking place beyond the linear screen when selling commercial time.
NBCU will set guarantees using its Total Audience Delivery, a metric that blends broadcast and cable primetime deliveries with streaming data, for the first time during the Winter Olympics. It will do this by selling a cumulative P2-plus rating (persons aged two or more) across all platforms.
This will allow NBCU to deliver audience guarantees with viewing that takes place both on the traditional screen and on its apps, through over-the-top devices and other non-traditional platforms.
"We always want to prioritize delivering on our audience promises. Given the dynamic shifts in viewing from one platform to another, we wanted to create a system that allows us to pivot from one platform to the other in real time," said Dan Lovinger, exec VP- advertising sales of the sports group at NBCU. "P2+ allows us to pivot an advertiser to where that consumption is taking place."
While NBC began releasing its Total Audience Delivery data during the 2016 Summer Olympics, these figures were not used to negotiate with advertisers.
"We always want to innovate and get to as close to great as possible. Measurement is tricky because viewing behavior is changing so quickly," Mr. Lovinger said.
While Mr. Lovinger acknowledged that linear TV viewing still represented a significant portion of viewing during the Rio Games, he said digital continues to become a bigger piece of the equation.
Through the 17 nights of the Rio ceremonies and games, NBC averaged 26 million viewers and a 14.9 household rating, a 15% decline from the 2012 Summer Games in London, which attracted 31.1 million viewers and a 17.5 rating. NBC's figures for Rio reflected its Total Audience Delivery.
And NBC missed its ratings guarantees by 3.1 points, or 17%, forcing the network to offer make-goods.
One of the biggest issues was many millennials failed to tune in. According to Nielsen, NBC's primetime Olympics coverage averaged a 5.3 rating among adults age 18-to-34, which is a significant 31% decline compared to the 7.7 rating in the demographic during the London Games.
NBC contended that many of those younger viewers were watching the Olympics differently, noting at the time that more than half of the 50 million people who streamed its Rio coverage were under the age of 35.
Pivoting to using Total Audience Deliveries simply reflects that change, Mr. Lovinger said.
NBCU has already struck deals with "multiple" advertisers who are buying on the new P2-plus metric for PyeongChange, Mr. Lovinger said, noting that he doesn't expect any pushback because marketers "want to be wherever the opportunity is the greatest."
This will be the first Olympics ads sales efforts led by Mr. Lovinger, who late last year replaced Seth Winter as head of ad sales for the sports group.
Next year will also mark Mr. Lovinger's first Super Bowl in the new role. NBC's broadcast of Super Bowl LII and the start of the 2018 Winter Olympic events fall just four days apart from each other.
NBCU is using the proximity of the two events to one another to introduce some new types of ad packages to the marketplace that will allow advertisers who want to be in both events to take advantage of the reach, Mr. Lovinger said.
The last time both the Super Bowl and the Olympics aired in the same year on the same network was in 1992, when CBS broadcast both.
Mr. Lovinger said there are multiple advertisers who have already bought ad time across both properties.