NBCUniversal Takes Aim at Walled Gardens: 'We're All Complicit'

In a fiery keynote address at today's Audience x Science conference in Jersey City, New Jersey, hosted by the Advertising Research Foundation (ARF), Linda Yaccarino, chairman of advertising and client partnerships for NBCUniversal, took aim at the walled gardens created by digital-first publishers. But she didn't just scold the publishers; she called out the entire ad ecosystem that allowed them to flourish.

"The lack of transparency makes us all, the whole industry, complicit in what's happening," Yaccarino said. What's happening is the current state of data and privacy mishaps—both the ones we know about and the ones we don't, she said. Just last Thursday, she pointed out, Facebook revealed that user data for 14 million of its members was shared. And that's after the Cambridge Analytica scandal which shared the data of 87 million. These continued violations show a lack of discipline, and that's a leadership issue.

Anyone investing in Facebook and other walled gardens must go to bed each night thinking, "What's next? What don't we know?" Yaccarino said.

Naturally, Yaccarino contrasted this with NBCU's efforts to be fully transparent with ad partners. Her company's problem hasn't been a lack of transparency, but a systemic slowness in responding to advertiser needs, something that comes from legacy thinking that doesn't focus on direct-to-consumer relationship, as well as the size of NBCUniversal as a whole. But the company has made strides in improving both, she said, noting that it's now quick to remedy underperforming ad campaigns by finding inventory elsewhere in its platform that provides better results—an advantage smaller players can't match.

Yaccarino also trumpeted the value of premium video inventory compared to lower-value online originals, saying her challenge these days was fighting a false narrative of digital effectiveness and the "shiny new toy syndrome" that places higher value on the latest offering. For three or four years, advertisers have rushed to buy cheap CPMs on digital, but are now seeing the relative value of what they're buying, she said.

"The whole premium content business needs to hire a chief marketing officer," Yaccarino added. "TV is expensive, but it should be. It carries all the water for the whole industry." When brands need to promote a film or move products in a hurry, they know they can't exchange TV for anything else, she said.

"You can't get the last click if you never make the first impression," Yaccarino noted, adding that nothing fuels the purchase engine like premium TV content.

Next up on the ARF stage, Megan Clarken, president of Watch at Nielsen, offered a slightly different view of digital-first publishers and walled gardens. "We actually have really good participation from many of the digital-first players," she said, noting that Facebook, Google, and several others have signed on with Nielsen's Digital Ad Ratings. While Google had for years graded its own homework (an expression used frequently at today's conference) because it had no competition and could act as it liked, the drive for transparency has forced it to change.

"A lot of the pressure that needs to be applied comes from the advertisers and the agencies," Clarken said. When advertisers hold back on ad budgets until they get the data they want, they drive results. "It takes time and a level of comfort and a certain level of pressure."

Wal-Mart created its own walled garden, Clarken recalled, but those walls not only prevented others from looking in, they also prevented Wal-Mart from looking out and seeing what its competition was doing. Now the company knows it has to be transparent if it wants to participate in the broader market.

"All of these pressures being put on these walled gardens make us very optimistic," Clarken said. "I'm optimistic about everything. I feel good about the industry."

Troy Dreier's article first appeared on OnlineVideo.net