Linda Yaccarino, a Long Island native who rose through the cutthroat advertising ranks to become a top executive at Turner and, for the past nine years, at NBCUniversal, doesn’t shrink from a challenge.
When Nielsen was struggling a few years ago to roll out measurement that would capture total viewing across screens, she wrote an open letter blasting the company for peddling “bad, inaccurate and misleading data.” With big tech companies threatening to vacuum up billions of dollars from traditional TV, she has routinely torched them as unreliable, even toxic, from the stage at Radio City Music Hall. So, when it came to launching Peacock, an ad-supported streaming outlet in a crowded, subscription-dominated field, she embraced the challenge.
“We’ve been in the professional leagues for a while — we’re not afraid of a little competition,” she told Deadline in an interview. “In any crowded marketplace, competition creates best-in-class leaders for those focused on the consumer and the future.”
Peacock, which debuts today on national platforms after a two-month run on Comcast pay-TV and broadband systems, is clearly the future of NBCU and is a key initiative for Comcast. Former NBCU boss Steve Burke, who spearheaded its early formation, told investors in January the company was “creating the equivalent of a 21st century broadcast business, delivered on the internet.”
By 2024, the goal is 30 million to 35 million monthly active Peacock users — a good-sized target given new competitors like Disney+, HBO Max and Apple TV+. The key to getting there is advertising, which enables Peacock to offer a base tier for free and a premium level that officially costs $5 a month but is expected to be bundled at no cost to pay-TV and broadband customers.
Even during the dark days of March and early April, as COVID-19 altered life on the planet, Yaccarino said NBCU never wavered. Originally, the Summer Olympics in Tokyo were meant to provide a crucial promotional platform. The environment has radically changed — not only have the Tokyo Games shifted to 2021, but NBC has still not completed sales in the upfront, with schedules in disarray, sports in limbo and production largely offline. Peacock ad commitments were locked in just before the pandemic — only one of 10 launch sponsors, Yaccarino said, needed to be swapped out and the effort has remained intact.
“If you think about everything you’ve read and seen about the softness of the ad market and advertisers needing to change plans,” Yaccarino said, “the No. 1 priority for our company during COVID was to launch Peacock on time. And we did.”
Ad-supported streaming is not a new concept, of course. Hulu and CBS All-Access have basic tiers with limited ads. Services like Pluto, Tubi and Crackle have seen viewership surge as viewers seek out free options, trading time watching ads for the lack of subscription hassle. But Yaccarino said the caliber of programming, along with NBCU’s investments in ad technology and commitments to refining the ad experience put Peacock in a different class.
“The ticket in the door [with advertisers] was, I have all this unbelievable content in one place, there’s no surrogate for it and from news to sports to things iconic in the zeitgeist, like SNL, 45 years ago and today,” she said. “There’s a familiarity with the other guys, but you’re completely trading up in terms of content.”
Peacock offers both recognizable properties and what Yaccarino says is “the scale and insights” of a large tech platform like YouTube — “but with transparency.” For years, advertisers have explored digital as a new horizon, only to regularly find it a less reliable, safe environment. Yaccarino and her peers in traditional TV sales have insisted for years that brands should prioritize TV for its accountability — now, NBCU is making that same pitch in streaming.
The timing, despite the logistical nightmares of the pandemic, could actually be propitious. Tim Nollen, an analyst with Macquarie Research, sees streaming as a ray of hope for the media business during a gloomy 2020. He’s expecting second-quarter U.S. TV network ad sales to plummet 26% on average, with an 8% drop for the full year.
“Flare-ups of the pandemic have again put already-staggered upfront negotiations on hold as brands assess the value of their media commitments in the face of more lockdowns,” he wrote in a note to client. Upfront spending is pacing to drop $5.5 billion, or 27%, according to eMarketer, though media companies are hoping they can still wring profits from ads in the scatter market.
Connected TV (a large category that now includes Peacock) has risen at least 40% in May and June, in Nollen’s estimation, as TV budgets are re-directed. Sensing a valuable alternative in ad-supported streaming, Fox, ViacomCBS and Comcast, have all acquired AVOD services in the past 18 months.
Ads will be limited to five minutes per hour which the company says is below the industry average of eight minutes in streaming and certainly well below the 15-minutes-plus of linear TV. Peacock also has implemented frequency capping, which prevents the same ad from playing again and again, as well as a “shoppable” e-commerce functionality and spotlights on “solo” brands on some content. The initial stable of advertisers consists of blue-chip brands like Capital One, Eli Lilly and Verizon.
Yaccarino says Peacock’s “pristine environment” is its trademark. Initial feedback shows above-average marks in likability, recall, likability, memorability and search starts. Clients “are familiar with Amazon, they’re familiar with Roku and Tubi and Pluto. The single biggest differentiator is that NBCUniversal and its content is considered top-tier,” she said.
From the brands’ point of view, she said, “the single most important thing is that Peacock is free. … Our partners get to be the benefactor directly to the consumer. ‘This enhanced experience is delivered to you by …'”
Beyond the 10 initial advertisers, “the demand is high and the queue is quite long,” Yaccarino said, indicating new advertisers would be rotated in over the coming months. But the ad experience, developed with engineers from Sky (acquired by Comcast in 2018) and across NBCU, will not change.
“Each ad break will be a maximum of 60 seconds,” she said. “So that means there’s also a maximum of two ads. That doesn’t mean we’re going to jam the pod with several 15-second ads,” Yaccarino said. Feature films are preceded by two minutes of ads and then stream commercial-free.
With Peacock, she added, “you move out of a world where it’s old platform, one screen, [gross ratings points] to a world away from GRPs and direct consumer interaction come into play.”
Many advertisers, particularly in a year that has seen not only the pandemic but massive social justice protests involving corporate America, are exploring 60-second spots, Yaccarino said. They could come into play with season premieres or finales — which appear on Peacock Premium the day after linear broadcast — or major sporting events like Premier League Soccer or upcoming Olympics or NFL broadcasts.