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TV networks race into data-based ad sales

In 2017, the NBCU's "Audience Studio," the group that manages its advertising data platform, had over 500 clients buy ads based off of audience data — not Nielsen ratings — a 50% increase year over year, Axios has learned.

The company has sold roughly $1 billion of data-based ads over the past year, and plans to meet the same goal over the next year.

Adapted from eMarketer; Chart: Axios Visuals

Now, the whole industry is catching on:

  • AMC announced last week its building a data-driven ad sales operation called "AMCN Agility" to better compete with networks like NBC and Fox.
  • Fox, Turner and Viacom last year created "Open AP," a consortium of audience-based ad targeting that leverages data across the three networks. The company says that 800 media agency accounts have been created so far.
  • Audience-based advertising has been a central argument made by AT&T throughout its merger trial with the DOJ.

Why it matters: The rise of streaming and multi-device content consumption has forced marketers to think differently about the most effective way to reach their audiences, and that often means using audience data, not traditional TV ratings, as a currency for television ad buying.

NBCU has taken the lead in pushing advertisers to think differently about ways they can more effectively target their audiences through data, not just blanket ratings.

  • At the helm of this push is its chief executive, Linda Yaccarino, who hosts industry-wide forums to discuss changes in audience measurement and ad sales. Under her leadership, along with executives Mike Rosen and Denise Colella, NBCU has grown its Audience Studio product and sales team by 50% in the past year. 
  • How it works: NBCU and Audience Studio allows advertisers to use first party customer data as not only the audience segmentation basis for TV buying decisions, but also the guaranteed delivery of those buys. It will approve data/tech platforms to purchase the entire NBCU national linear TV portfolio in a self-service manner through a new partnership with Adobe Advertising Cloud, similar to what marketers can do on Google or Facebook.

But, but, but: Audience-based ad buying, while growing, it still a very small portion of overall TV ad-buying — accounting for only 10%, roughly, of total TV advertising. And Nielsen, which often gets a bad rap for being "behind the times" is involved in the technology that's powering some of these networks' efforts, like Open AP.

  • The company has been exploring audience-based buying partnerships since 2013. It announced last week a data and technology agreement with IPG Mediabrands, the media management and data arm of Interpublic Group, that will enhance the company’s audience discovery, activation and measurement abilities for advertisers.
  • It also launched an Advanced Audience Forecasting tool that will provide clients with forecasts of TV audiences defined by advanced audience segments.

Note: NBC is an investor in Axios and Andy Lack is a member of the Axios board.