P&G, NBCUniversal and The Trade Desk
Three of the biggest names in marketing converged during a keynote conversation on the future of TV advertising during the final day of the Consumer Electronics Show (CES), which this year was inevitably virtual. And to hear these industry stalwarts tell it, many of the rapid adjustments made during the early days of the pandemic are now being embraced long term by industry-leading companies.
Moderator Andrew Wallenstein of Variety dubbed the discussion as a “$10 billion conversation” — a nod to panelist Marc Pritchard, chief brand officer at P&G, who commands the world’s largest ad budget. Pritchard was joined by Linda Yaccarino, chairman of advertising and partnerships at NBCUniversal and Jeff Green, cofounder and chief executive at The Trade Desk.
Here, we share three key takeaways from their discussion.
The pandemic forced a rethink on the legacy practice of the upfronts. For brands such as P&G, that was an opportunity, part of a broader industry push to improve the status quo. Pritchard describes this dynamic as “constructive disruption.” But what does that exactly mean?
“Constructive disruption means doing things in such a way that it creates growth and value for everyone in the industry,” Pritchard said. “When there’s so much disruption in the world, it’s best to get ahead of it and lead it.”
The panelists spoke on recent social and economic disruptions, from the pandemic to political upheavals in the United States, acknowledging that events have forced major brands to rethink everything — including the upfronts.
“These confluences of changes are what really caused us to step back and look at this legacy upfronts system, which in our view is very old after being created in the 1950s,” Pritchard said. “It hasn’t led to innovation.”
Without the need to return to the upfronts — following P&G’s announcement last September — Pritchard said the company could now engage in new practices with leading broadcasters such as NBCUniversal, which meant more direct conversations between the parties.
“We’re looking at how we can be more flexible, real-time and how we can create tent-pole moments where we [NBCUniversal and P&G] can work together,” Pritchard said. “It’s opened the door for measurement discussions not just in the digital world, but also in the TV world.”
All of these changes, said Pritchard, point toward “the inevitable future,” by which he means a place where all advertising is digital, programmatic, data-driven and automated.
Brands getting more deliberate
Part of the drive to rethink the upfront process, the panelists agreed, was to be more data-driven and deliberate in everything they do. Whether it’s ad-buying, measurement, or responding to real-time variables, marketers can now leverage data to make more informed decisions.
“That’s not dissimilar from any mature market,” said Green. “You look at equities, spot markets and forward markets inform each other. They leverage as much data as possible to transact on the best possible prices. And those markets are always on.”
Buyers now have more choice because of the advent of CTV, something they previously lacked in the 50-plus years of the upfronts. The appeal of leveraging data, having more flexibility and better tools for measurement is “going to transform the upfronts into a forward market. And it’s going to make marketers and publishers better,” said Green.
Of course, it’s not just the upfronts. “The same data is being used by brands to avoid specific content, or become more discriminate toward [harmful] user generated content,” added Green. “And on that vector, we’ve seen marketers get more deliberate than they’ve ever been in 2020.”
Upside for both sides / Streaming is changing the dynamics of ad inventory
NBCUniversal’s Linda Yaccarino confirmed that sentiment, saying adopting a new approach has “liberated us from some of the handcuffs of the legacy stuff that couldn’t deliver on things we needed, particularly as it relates to context, transparency and safety.”
Yaccarino added that NBC has invested millions of dollars to bring the most attractive elements of linear TV — a brand safe environment and knowing where and when a commercial will air — to the digital space. Finding partners who share similar values in business, having an open marketplace and being fully transparent is paramount, according to Yaccarino.
A partner like The Trade Desk, for instance, is helping spearhead Unified ID 2.0 in an effort to provide marketers with an improved identity solution that also equips consumers with better privacy controls. That’s critical, as getting identity right improves targeting capabilities for brands like P&G, while also keeping CPMs high for content creators like NBCUniversal.
Yaccarino also pointed to NBC’s streaming service, Peacock, as an example of where innovation is happening. “Peacock is in a unique space,” said Yaccarino. “If you look at Netflix or Disney+, we’re actually adding ad inventory to a marketplace that is seeing a big deterioration in availability.”
Yaccarino added: “That, combined with our interest in growing all digital video and helping support the CTV marketplace can tell you that we’re pretty bullish on advertising moving forward.”