The 30 second TV commercial could well be dead. The Fox Networks Group’s ad exec Joe Marchese, has told The New York Times, “The social contract is broken with the consumer — they don’t want to watch the ads.”
As thousands of television and advertising executives from all over the world gather in New York this week for previews of the big US networks’ hottest new shows, the ad slots which pay for those shows seem to be in mortal danger.
NBCUniversal’s chairwoman of advertising sales, Linda Yaccarino, told The Times that she is operating under the assumption that the current business model is in its last days. Commercial breaks, the architecture upon which an entire industry is built, may not be around much longer, Yaccarino said.
“I tell my whole team, ‘We’re hanging on to them by our fingernails,’” she said.
In some cases the networks are simply giving them up, looking to clear enough space to build a new business model. NBC, for instance, recently announced it was cutting commercial time by a third in the network’s headlining Saturday Night Live. Instead, following in the footsteps of Buzzfeed, NBC will try to replace the revenue through sponsorship of individual skits. Going well beyond simple product placement, segments of the show could be themed around sponsors’ products.
Rather than selling previously sought-after time-slots, such as mid-evening on Sunday night, broadcasters are looking to create packages which would drop advertisers’ messaging into whichever time-shifted, non-linear channels the viewers had sifted themselves. Late-night talk shows have led the charge into this form of guerrilla programming.
Increasingly, live audience ratings don’t matter, as producers chase virality online. A top rating show might pull in a few million viewers. A ‘bit’ that goes viral online can attract tens of millions of discrete views, with some viewers watching over and over.
The networks are not powerless against online. Chief research officer for CBS, David Poltrack, expects ad rates to go up in the short term because advertisers went ‘too far’ in shifting their spend to digital last year. Retail sales consequently dipped.
As Poltrack told The Times, “If less people see your advertising, you will sell less things.”
The argument did not impress media buyer Magna Global which moved $US250 million of ads off the small screen and onto even smaller ones, two weeks before the TV industry gathered in New York.
This article originally appeared on B&T’s sister business site www.which-50.com