As traditional TV grapples with Netflix, NBCUniversal plans to cut ad time by 10% in primetime TV this fall

• NBCUniversal said that it plans to cut the amount of primetime TV ad time by 10% this fall.
• The media giant's sales chief, Linda Yaccarino, said the move is necessary given consumers' changing tolerance for advertising.
• To offset this ad reduction, NBCU is promising to bring more science to its ad targeting to make the remaining TV ad space more valuable.

NBCUniversal knows the traditional TV ad experience needs to change. So it's doing the once-unthinkable: it's going to run fewer ads.

The media goliath said that starting this fall, it will cut the amount of advertising time during primetime (its most coveted and expensive real estate) by 10 percent on all of its networks - from the NBC broadcast network to SyFy to E! and so on.

Linda Yaccarino, NBCU's Chairman, Advertising and Client Partnerships, said that the move is being driven by an overarching recognition that Americans' tolerance for ads is going down, and the TV experience simply has to change.

"If you look at the consumer experience, it needed to get better," she told Business Insider. "You have a population raised with the expectation of being able to ad skip or go ad free. You can't deny that."

NBCU wants to make TV shows feel way less cluttered

Yaccarino said that through research, NBCU has found that it isn't just the amount of TV time that is soaked up by ads that irks consumers, but the way they were clustered and scattered throughout shows. So NBCU also plans to reduce the number of ads per 'pod' - or unique commercial break - by 20%, the company said.

"It was actually the clutter that bothered people," she said. "We were kind of beating them up both ways."

To be sure, NBCU is not setting out to make 10% or 20% less money from ads this year. To offset that reduction in ad time, NBCU will run a standalone 60-second ad break at either the start or end of each show that will serve as something of a marquee placement.

To that end, the company plans to use a blend of data and manual tracking to try and match advertisers with specific episodes of shows, based on themes from particular episodes. NBCU is calling this its "emotional algorithm," Yaccarino said. "It's going to scrub every script to the scene level."

Marketers will be able to place their ads next to specific scenes from shows based on dozens of content attributes, such as "family" or "fanaticism." "Think of it like a giant grid or jigsaw puzzle," she said. "We're actually going to program our ad pods. It's crazy that we haven't done this."

The thinking is that this will deliver people more relevant and effective ads while, at the same time, making TV ads overall more palatable. For example, an advertisement featuring a cute baby might end up running during an episode of a family show centered on a pregnancy plotline.

Hopefully marketers will be willing to pay more for less

And from a business perspective, ideally these new slots will sell for a premium, and make up for any lost revenue from the reduction in overall commercial time.

"The market will ultimately determine its worth," Yaccarino said. "We knew that we had to bring a lot more value to the table. Any brand marketer will tell you, it's all about the value that's delivered."

NBCU's move may appear drastic, but probably inevitable, as the commercial television industry is facing secular decline. TV advertisers are starting to spend more on the medium, which appears to have peaked two years ago, Bloomberg reported.

"We're taking a big swing," said Yaccarino. "This is the first wholesale effort to reimagine TV ads. She hopes other TV networks follow NBCU's lead. "That will benefit the greater good of the TV ecosystem."