With Peacock’s National Rollout, NBCU Creates ‘the Future of Advertising’

Linda Yaccarino on writing a 'completely new playbook'

Peacock’s new ad formats offer “the right ads at the right time, in the right context,” said Linda Yaccarino.
Peter Kramer/Peacock

Key insights:

In early 2018, Linda Yaccarino, NBCUniversal’s chairman of advertising and partnerships, pitched then-CEO Steve Burke and the NBCU executive committee on what at the time was an off-the-wall idea: creating an free, ad-supported streaming service (AVOD), instead of the SVOD subscription services on the market or in the works from competitors like Netflix and Disney.

“We laid out the macro ecosystem at the time, and where we saw the future going,” Yaccarino said. With “subscription fatigue” already a concern back then, she continued, “if you believed that in exchange for free, you could get great content with a reasonable amount of the right and appropriate ads, and the consumer believed in and trusted that relationship, then you could have a pretty successful proposition.”

Burke was “enthusiastic and intrigued” by the pitch, and okayed further development. Two and a half years later, the resulting streaming service—called Peacock—is preparing for its national debut on Wednesday, and has given Yaccarino the opportunity to “invent the future of advertising” via the new platform.

It would prove to be a pitch ahead of the curve by Yaccarino, who will speak about the future of television at Adweek’s NexTech 2020 virtual summit taking place July 27-30. The AVOD space exploded a year later, with Viacom buying Pluto TV and free, ad-supported platforms becoming key to streaming’s future.

In September 2018, NBCU’s parent company Comcast acquired European media giant Sky, which had already been in the streaming business for several years and gave it a streaming toehold. And Peacock now arrives in the middle of a pandemic, when housebound consumers—many of whom have been laid off or suffered salary reductions due to Covid-19—are hungry for new content options.

“The future came much sooner than we have thought. Now, free seems like a pretty good proposition to today’s American consumer,” Yaccarino said.

Peacock enters the streaming space with a three-tiered offering. Its lowest tier is free and ad-supported, with about 7,500 hours of programming. The second tier, called Peacock Premium, is also ad-supported and boasts 15,000 hours of programming. It will be free to Xfinity video and broadband customers and Cox broadband customers; everyone else has to pay $4.99 a month. For an additional $5 a month, customers can receive an ad-free version of Peacock Premium.

“The future came much sooner than we have thought. Now, free seems like a pretty good proposition to today's American consumer."
Linda Yaccarino, chairman of advertising and partnerships, NBCUniversal

Peacock features what Yaccarino calls “the lightest ad load in the industry,” with five minutes or less per hour—ad loads are identical for both the free and Peacock Premium tiers—as well as frequency caps to insure that consumers don’t see the same ad more than once every half hour. (The lack of frequency caps on other streaming services was the top complaint among consumers during NBCU’s research, she said.)

The platform boasts 10 launch sponsors, all of whom have category exclusivity: Apartments.com, Capital One, Eli Lilly and Company, L’Oreal, Molson Coors, State Farm, Subaru, Target, Unilever and Verizon.

All 10 advertisers and their respective brands are also part of the Peacock Streaming Council, a group of advertisers that will work in tandem to determine the best advertising and sponsorship approaches on the service. (The first Streaming Council meeting was held last month.)

Writing a ‘completely new playbook’ for advertising

As she and her team developed Peacock’s ad strategy, “the exciting thing is the ability to write a completely new playbook for the future,” said Yaccarino. “So there is no comparison to last year, or some type of legacy trading practice that needs to be ripped down and reinvented, which is so hard to do.”

Peacock’s new ad formats, which NBCU unveiled in January, enable consumers to see “the right ads at the right time, in the right context,” Yaccarino said.

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