The company on Monday unveiled a new ad format for its streaming-video hub Peacock that will surround a show with a “frame” sponsored by an advertiser. The graphic overlay may even contain interactive elements that let Peacock subscribers shop for the product or service being advertised.
“The majority of Peacock customers are opting for our ad-supported experience, and we remain focused on collaborating with our brand partners to develop innovative, personalized ad experiences that continue to enhance the customer experience,” said John Jelley, Peacock’s senior vice president of product and user experience, in a statement.
The new ad format could serve as a preview of a new level of aggression by TV networks to serve commercials to streaming viewers. For years, the media companies have resisted such tactics, mindful that rivals like Netflix and Amazon were serving up premium TV experiences with an explicit promise not to interrupt them with advertising. But in the first half of 2022, such bets may be off. Two of the streaming world’s top venues, HBO Max and Disney+, are serving up commercials to those consumers who opt for a lower-price tier that included advertising. Even before it became part of Warner Bros. Discovery, HBO Max had unveiled plans to run so-called “pre-roll” ads ahead of HBO movies. Disney intends to launch a new ad-supported tier of Disney+, previously barred from advertisers, in weeks to come. And Netflix has indicated that it, too, will soon embrace an ad-supported service in months to come.
Such decisions come as Wall Street is scrutinizing the growth of streaming overall. Netflix shares fell precipitously more than a week ago after the streamer disclosed subscriber losses in the first quarter and said it anticipated more in the second. Meanwhile, as more media companies launch streaming services to court viewers who want to watch their favorite shows at times of their own choosing, the competition for each subscriber has grown even more intense.
The media companies will have to navigate a tricky path. Part of the allure of streaming is the ability to watch favorite series with only a little advertising — and sometimes none. When Peacock launched in 2020, NBCU vowed to run no more than five minutes per hour, a clear shot at Disney’s Hulu, which is known to run more commercials and has come under scrutiny from media buyers for running similar ads several times during a viewing session. It remains unclear whether having a “frame” on screen would count against the company’s five-minute tally.
The “frame” might not seem so unfamiliar to veteran TV watchers. The TV networks have routinely used similar graphic concepts to keep ads on screen while live broadcasts continue. The theory is that the concept lets advertisers get their messages in front of consumers, while continuing to give them a peek of the action they already tuned in to see. TV networks have experimented with “double boxes” during sports events that might show a car race or sideline action at a football game in one part of the screen while commercials run in another. News networks have long used “squeezebacks,” or commercial breaks that spotlight the ads while continuing to televise the action on screen from a studio or remote report. CNN recently ran into headwinds with exactly that concept when it ran an ad from the fast-casual chain Applebee’s while it was televising the opening days of Russia’s invasion of Ukraine.
If successful, NBCU’s “frame” would join the ranks of other popular streaming-ad concepts. One, known as a “pause,” surfaces on screen when a user has decided to stop the action. Other spots use QR codes to entice a viewer to use a smartphone to find an accompanying website that has more information, or even buy the product. That idea made a big splash recently when cryptocurrency exchange Coinbase ran a commercial during the Super Bowl that consisted of nothing but a floating version of the cypher against a dark backdrop. NBC has tested other ideas as well, including an entire short film devised by tech marketer H-P Inc. that enlisted personnel from top streaming shows like “Ozark.”