TV is heading for a commercial breakdown.
TV networks are set to broadcast many of the same old ads viewers have grown accustomed to seeing for dozens of years. And yet, executives hope they can make those spots more interesting, more timely and harder to ignore by finding new ways to distribute them and measure their effectiveness.
What the industry is realizing is this: what a commercial says may not be as important as how it’s introduced to the viewer Madison Avenue needs to see it. Come the fall, couch potatoes are likely to experience everything from ad breaks only two commercials in length to pitches beamed to them through their Samsung or LG smart TV.
Whether these new ads are successful remains guesswork. Magna, the Interpublic Group media-research unit, has called for overall U.S. ad spending to grow 5.5% over 2017, and expects media owners to collect $197 billion in net advertising revenue. But the money allocated to national TV will fall about 2% to about $41 billion, according to the forecast.
To combat that trend, traditional TV outlets are dipping their hand into the decidedly non-traditional. Some of the ideas to make TV ads more appealing actually have very little to do with the typical TV broadcast. Below, Variety reviews some of the most interesting offers to surface during the industry’s recent upfront presentations to advertisers. Will they work? You’ll have to tune in during the fall to see.
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SPOT SPLITTING: TV for decades was the place to get an ad for soap, soup or smartphones in front of the biggest possible audience. If CBS has its way, TV may also become the place to instead get the right ad in front of the most profitable niche.
CBS has teamed up with Nielsen to use a technology that will be able to send specific commercials to particular households using broadband connected televisions while checking out CBS programs like “Young Sheldon” or “NCIS.”By using a TV’s IP address, marketers can understand which households might carry more likely customers for diapers, a particular kind of car, or life insurance. So rather than beaming the same commercial to every single viewer in the nation, CBS might be able to “split” the spot – sending an ad for a lower-priced car to a household believed to have a young couple living there, or an ad for high-end technology to a TV believed to be watched by high-income consumers. The technique is known in the industry as “dynamic ad insertion, and CBS will test its use in the second half of 2018.
“It should be seamless to the viewer,” explains Mike Dean, senior vice president of advanced advertising at CBS. “It basically puts a new ad over what we are broadcasting nationally.” If a viewer was watching, say, “Big Bang Theory,” and most of the country got an ad for paper towels, notes Dean, “1% would get a targeted ad for an Audi car.”
Ad insertion has in recent months been primarily used in the two minutes per hour that cable distributors get for local commercials. If successful, CBS would be the first to bring the concept on a wider basis to live linear national TV. The company intends to make sure it gets things right, including measurement, says Dave Morris, executive vice president of advanced advertising and client partnerships. “We see it as a limited trial in the second half of this year, with broader roll out in 2019.”
ADS THAT FOLLOW YOU: Hulu, the popular video-streaming site owned by 21st Century Fox, Comcast, Walt Disney and Time Warner, intends to allow subscribers to download many of their favorite programs. The content will be of the on-the-go variety and it will come packaged with commercials – meaning that ads will be able to follow Hulu users into one-on-one rendezvous with programming they felt was important enough to save for later enjoyment.
“A sponsored download isn’t just a reasonable value exchange, one that elevates and reminds people that, yes, marketing helps pay for these amazing shows, it’s a unique opportunity for marketers to further their relationship viewers,” says Peter Naylor, senior vice president and head of advertising sales at Hulu. “The potential for creative and product innovation here is abundant.”
BREAK-OUTS: One of the most-discussed concepts this spring are new offerings from NBCUniversal and Fox Networks Group that will cut back commercials in primetime.
NBCU has vowed to cut 10% of the ad time from its primetime originals on cable and broadcast starting this fall. The pitch is that its networks will run just one 60-second commercial break after the first 22 minutes of programming and will work with sponsors to make sure ads in these “Prime Pods” can be tied more directly to the shows they support. Meanwhile, Fox has introduced “JAZ Pods,” or two-ad breaks that can be made available across networks, in specific shows, events, and time-blocks and even on whole nights on Fox Broadcasting. The new format will be the only one used in FX’s new series, “The Weekly.”
Madison Avenue has cheered the concept, but not the high prices each company has sought for the opportunity. Rival ad-sales chiefs have suggested clients won’t take part unless they can get better financial terms. The market “is beginning to get a real sense of the cost of doing limited commercial runs, and the clients, most of the clients, are hesitant to foot the bill on the premium that would be pushed back to them,” says Rob Tuck, the CW’s ad-sales chief.
WICKED GAME: Late-night TV is in the midst of a massive content expansion from flagship TV shows to all kinds of ancillary programming. Samantha Bee is helping the format stretch even further.
The host of TBS’ “Full Frontal” announced last week the creation of a mobile game aimed at getting U.S. citizens to vote in the coming 2018 midterm election, and that she would be open to touting advertisers if they would sponsor the new app. “Axe Body Spray … I will wear your stinky product and people will be able to smell my pheromones through the TV!” she told a crowd of advertiser assembled at Turner’s upfront show.
Madison Avenue has reason to pay attention to mobile games. Over at Nickelodeon, executives routinely point to “Sky Whale,” a popular mobile game that sprung from the plot of its TV series, “Game Shakers.” The game averages two million active monthly users and has been downloaded at least 30 million times around the world.
BREAKING THE LAW: In an era when there is no single standard to measure viewers across linear and digital, live and on-demand, some media companies are coming up with rules and systems all their own.
NBCUniversal has unveiled “CFlight,” a tabulation of linear, digital and out-of-home viewers who have completed viewership of commercials that accompany a particular piece of content. The composite count of impressions makes use of Nielsen, comScore, Moat and other measurement companies, and will also take into account co-viewing on broadband venues such as Roku and Hulu.
Time Warner’s Turner, meanwhile, played the role of the pirate last week, urging advertisers to consider striking bespoke deals with the company, rather than adhering only to traditional Nielsen measures. “We are in a new era of media and it’s time to retire the Nielsen television metric,” noted David Levy, president of Turner. “ While it undoubtedly served its purpose, it no longer fully captures how to successfully measure an audience in today’s landscape.” Some of Turner’s new offerings make use of Nielsen data, but the strategy suggests Turner feels it can gain more traction with clients by offering them something other than Nielsen rather than relying solely on that company’s data. The companies may be rattling their sabers more than anything else. Other networks, like the CW, have long offered ways to gauge digital viewers – and Madison Avenue still does the bulk of its TV deals using Nielsen data as a foundation.