• by Karlene Lukovitz , October 24, 2022

In an unusual move that underscores just how important streaming advertising is to the future of legacy entertainment giants, NBCUniversal has decided to take on a major national press outlet over its coverage of the business.

NBCU President and Business Officer Krishan Bhatia has posted a lengthy response to an Oct. 18 Wall Street Journal article by the paper’s advertising editor, Suzanne Vranica, that focused on the remaining challenges to growing streaming advertising.

Vranica’s piece opens by stating that “Marketers are excited that more streaming platforms are embracing advertising, but they say running ads on streaming services remains rife with challenges.”

It proceeds to quote advertiser, agency and ad-tech executives about problems such as excessive ad repetition and the June 2022 Group M/iSpot.TV study that found that about 8% to 10% of streaming ad impressions play when TVs are shut off, wasting an estimated $1 billion per year in advertising investments.

Bhatia’s response argues that the media have been fixated on streaming's problems, giving scant attention to the progress and advantages already in the marketplace.

Bhatia even takes a swipe at some advertising executives, implying that those who complain aren’t necessarily pursuing available solutions with full commitment.  

The ”real” AVOD story “isn’t debating whether solutions exist (they do); it’s whether programmers, agencies and marketers are ready and willing to adopt them (and some of us are),” he asserts.

“Based on what we are seeing and the countless conversations our teams are having with marketers, the gloom and doom about AVOD [advertising-supported video-on-demand] is overhyped,” Bhatia writes. “Of course, that doesn’t make for an eye-catching headline. But when we talk about streaming, a fixation with the problems is obscuring the actual advances that have been made.”

Bhatia stresses the progress already made in the streaming sector, and contrasts it with the cable TV industry, which “kept using the same measurement system, trading methods and business models,” increasing ad loads, “chipping away at the consumer experience,” and stalling innovation.

The streaming industry is instead using today’s digital capabilities and tech innovations to “ditch old strategies and approaches,” he declares. “No industry-leading marketer wants to repeat the sins of the past: adding ads indiscriminately, forsaking the consumer experience, deploying outdated measurement, resisting transparency in digital. Compared to the cable shift, this moment is incredibly liberating.”

Bhatia points out that streaming now accounts for 50% of video consumption, and is projected to reach 70% within five years, and that most streaming viewing is in ad-supported services. 

He also points out that the repetitive ad problem can now be addressed by using frequency management tools with Ad-IDs; that more sophisticated targeting enables more relevant ads; and that some AVODs (like NBCU’s Peacock) run just four to five minutes of ads per hour, versus an average 17 minutes per hour in traditional linear TV. 

Streaming is also enabling smaller and D2C companies to reach customers through video, he notes. 

But “nowhere does progress feel more apparent — and ignored — than in measurement,” Bhatia argues. “Today, we’re no longer dependent on a monolithic measurement solution." Instead, "when [NBCU] issued a specific call to action last year, we discovered more than 150 innovative measurement companies that more accurately reflect today’s consumer behavior and can help marketers measure impact. So, when the current currency disappears in 2024, there are plenty of alternatives.”

NBCU is investing in multiple measurement models that can offer “second-by-second accuracy, cross platform reach and frequency, mid-funnel attribution, ROI, attention and emotional measurement” and more, he writes — as well as in new data and identity models and unified platforms, “seamless” interoperable systems for advertisers, innovative ad formats and a “superior content experience” for consumers.