Inside NBCUniversal’s New Lucrative Prime Pod Ad Format, Which Debuts Tonight

As the 2018-19 TV season kicks off, buyers will be focusing on tonight’s rollout of NBCUniversal’s new “prime pod” premium ad format, which was one of the biggest new innovations, and led to some of most heated negotiations, during this year’s upfront. In February, NBCUniversal unveiled plans for its prime pod—a 60-second pod of audience-targeted advertising in the first or last breaks of all prime-time original series across its entire broadcast and cable portfolio—as part of its larger initiative to reduce ads by 10 percent this fall on those same 50-plus NBCU original shows. The offering, which the company says will increase brand lift and purchase intent by placing those ads in a less-cluttered environment, prompted some sticker shock during NBCUniversal’s prolonged upfront talks. But NBCU ultimately sold the format at a 75 percent premium above the average cost of an ad in each show, according to a source close to negotiations. Now, as the prime pods launch with tonight’s season premiere of The Voice—the first advertiser is Universal Pictures, which will run a spot for First Man, its upcoming Neil Armstrong biopic—NBCUniversal is sharing more details about the new format and what audiences should expect from it season. Upfront demand was “great, and outpaced supply,” as NBCU sold 80 percent of its prime pod inventory in the upfront, leaving 20 percent for the scatter market, said Mark Marshall, evp, entertainment advertising sales, NBCUniversal. Buyers were particularly interested in the format on NBC’s highest-rated shows like The Voice and This Is Us, but there was so much demand for USA and Syfy’s shows, that Marshall sold all of those two network’s prime pod inventory in the upfront. Telemundo and new NBC dramas Manifest and New Amsterdam also saw strong prime pod interest during the upfront. The new offering was most popular among movie studios, followed by the automotive, telecom and technology categories. Most of NBCU’s entertainment and sports programming was transacted in the upfront on the company’s new CFlight unified advertising metric, which measures live, on-demand and time-shifted commercial impressions of episodes on every platform. However, the prime pods were transacted on traditional Nielsen age and gender demos, given that they only run in the program’s live airing and aren’t part of a multiplatform campaign. In the event of underdelivery, NBCU will offer additional prime pod inventory as a makegood. Roughly 80 percent of the the company's prime pods will feature a pair of 30-second spots, while the rest will contain a single 60-second ad, some of which will feature custom content. Big retention increases Before arriving at the prime pod offering, NBCU tested 17 different ad formats with 1,700 consumers. The company’s takeaway: the offering “needed to be an isolated pod at 60 seconds, where you had the maximum blend of what worked for consumers and what worked for a brand,” said Marshall. NBCU shifted to on-air prime pod testing from March to June, which involved nine categories, representing 27 brands, in shows like The Voice. Those tests, said Marshall, showed that prime pods led to a huge increase in consumer retention. According to the company, the consumer retention for an average competitor’s pod is 65 percent, which NBCU’s average is 71 percent. But the prime pod consumer retention was significantly higher at 86 percent, and jumps to 88 percent for prime pods with a bumper intro. That gave prime pods similar retention levels to actual programming, including reality (88 percent), live shows (87 percent) and scripted (84 percent). “If we can keep those numbers, we’ll be very happy, as will our advertisers,” said Marshall. NBCUniversal will experiment this fall with how and when it uses bumpers to segue into a prime pod. “If it’s a custom piece of content, we probably won’t have a bumper,” said Marshall. “Other times, we’re going to test and have a two- or three-second bumper, saying, ‘We’ll be back in 60 seconds.’” Buyers will be keeping a close eye on the prime pods to see whether the hefty increases they paid for the format were worth it. “How will this new format impact viewers in terms of their engagement with the programs?” wondered one buyer. “It’s not like anyone is tuning in because they know that’s happening.” Following the tough upfront talks, NBCUniversal expects to sell out its remaining prime pod inventory in scatter. “While there were some challenging conversations as we went through it all, all of them understood what we were trying to do, which was improve the viewing experience,” said Marshall. “I give advertisers credit for looking at the impact these prime pods are going to have, as opposed to looking at a traditional way of looking at a 30-second spot.”