NBC Tries New Tack With Kevin Hart Movie Ad: Promising Results

(Bloomberg) -- When STX Entertainment wanted to advertise its new movie “The Upside,” NBCUniversal pitched a radical idea: The TV giant promised the commercials would bring a certain number of ticket sales.

The campaign for the film, which debuted last month and stars Kevin Hart and Bryan Cranston, marked the first time these companies had struck an advertising deal based on a business outcome instead of viewers. For years, TV commercials have been bought and sold based on audience ratings, such as how many 18-to-49-year-old women tune in.

Now, with the video industry fragmenting, the deal between STX and NBC could be a first step toward a new currency for the $60 billion TV ad industry, said Linda Yaccarino, NBCUniversal’s chairman of advertising and client partnerships. In this case, network officials said they delivered on the promised sales.

“Ratings guarantees and legacy metrics are part of a world that doesn’t exist anymore,” Yaccarino said in an interview. “Consumer behavior has changed and that has created a need to measure what’s important.”

Yaccarino has been trying to lead the TV industry toward a new way of buying and selling commercials as more people watch shows like “This Is Us” in ways that aren’t counted in conventional TV ratings. Google and Facebook Inc. have used the precise online data they gather on consumers to take billions of dollars in advertising from print, radio and TV.

CFlight Metric

Last year, NBCUniversal started selling commercials based on a new metric -- which it calls CFlight -- that counts all live, on-demand and time-shifted viewing on all screens.

A division of Comcast Corp., NBCUniversal plans to strike more such deals like the one with STX, such as promising automakers that their commercials will lead to a certain number of car sales, Yaccarino said. If the ads don’t deliver, sponsors will get free, make-good time on NBC channels, just as they do when ratings fall short of what’s promised.

At the center of the ad deal is Fandango, an online movie ticket service owned by NBC. Fandango data, combined with information from Comscore Inc. and Comcast’s set-top boxes, can target ads for “The Upside” to likely moviegoers and track whether they buy tickets.

Fandango Data

Fandango’s data were especially attractive to STX, a filmmaker and distributor backed by the internet giant Tencent Holdings Ltd. About half of box-office sales come from just 12 percent of the population, said Amy Elkins, an STX marketing executive, citing industry data. STX doesn’t want to waste money trying to reach TV viewers who’d never see a movie.

“The hard part for movie marketers is that we don’t have ownership over the point of sale,” Elkins said, referring to Fandango.

The campaign started in December, leading up to the January release of “The Upside,” which is about a friendship between a wealthy quadriplegic and his caretaker. It was the top-grossing movie on its opening weekend, generating $19.5 million in ticket sales, and has taken in $78 million from domestic theaters.

To contact the reporter on this story: Gerry Smith in New York at gsmith233@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum

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