Commercial Load Limits Coming On Fox, Could Expand To Other Mediums.

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Commercial Load Limits Coming On Fox, Could Expand To Other Mediums.


Mar 8, 2018 by Mark Maier

 

By 2020 Fox TV says thier Prime Time commercial load will be at 2 minutes.  The advertising industry has long looked at limiting commercial load in a supply vs demand model to drive rates up and improve the quality of the content.  MediaPost reports that this follows NBCUniversals move to limit spot load...

"The Fox broadcast network wants to follow the move by NBCUniversal in cutting back key advertising time.

By 2020, the Fox network has a goal to cut prime-time advertising time to two minutes an hour from around 13 minutes currently, according to media executives.

Fox also wants to increase some branded content pods doing prime-time programming.

Starting this fall, Fox intends to focus on Sunday prime-time programming -- reducing advertising in its animated shows to just two spots per pod from around four spots per pod. 

The plan is called "Jazz," according to Bruce Lefkowitz, executive vp of advertising at Fox Networks Group, who spoke with Television News Daily. Lefkowitz says this refers to "Just 'a' and 'z' " (first and last) placements of commercials in a pod, which typically get higher viewership.

Lefkowitz says attention should increase for these commercials due to the elimination of advertising clutter. Pricing is expected to rise for those spots. In addition, he said, Fox is starting up Fox Blocks, where marketers can create custom content.

Part of this could have Fox advertisers contributing to a production fund for branded content using its own original intellectual property or Fox’s intellectual property.

Some of this was revealed during an private advertising event hosted in Los Angeles by Fox last Wednesday.

It was there that Joe Marchese, president of advertising revenue for Fox Networks Group, told media agency, marketing and some competing TV network executives -- including Linda Yaccarino of NBCUniversal and Charlie Collier of AMC Networks --  that Fox intends to whittle down its prime-time advertising to two minutes per hour in two years.

A Fox representative would not comment about any changes in Fox prime-time advertising.

Also last week, just before the start of the Fox meeting with media executives, NBCUniversal announced plans to lower prime-time ad time by 10% across its networks -- affecting some 50 shows -- and to decrease the overall number of ads on its networks by 20%."

From Jacobs Media, they added some additional insight and background to where this latest move comes from...

"Exhibit A is a Bloomberg story by Lucas Shaw, boldly suggesting the TV business is in trouble as advertisers increasingly bail out to digital platforms like Google and Facebook.

Pointing to an advertising economy that’s growing, Shaw points to a “no growth” scenario for traditional media companies – TV and radio included.  Social media, streaming services, and cord cutting are conspiring to erode TV’s long-time hold on the market.

The data shows a 10% viewership drop last year among 18-49 year-olds, exacerbated by falling sports ratings – including down numbers for the NFL.  Sports was expected to be the “firewall” that would keep viewers tuning into commercial broadcast television.  But these days, all bets are off.

Exhibit B involves the aforementioned Netflix, and the theory it’s costing traditional TV billions in lost advertising revenue as more viewers gravitate to sbuscription streaming services.

Media Post says a new nScreen Media analysis estimates somewhere between a $3-$6 billion ad shortfall for TV.  Analyst Colin Dixon says the average Netflix viewer in the U.S. misses somewhere in the vicinity of 35 30-second commercials each day.  Over a year, we’re talking more than 5,7oo missed spots.

And Exhibit C is the most interesting because it’s about television getting proactive, rather than enduring attacks as in the earlier mentioned stories.

So, here’s the big news:  NBCUniversal says it will reduce its commercial load by 20% across all its networks.  That includes NBC, of course,  as well as ScyFy, USA, and others.  During the prime time hours, commercials will be slashed by a more modest 10%.

The Wrap quotes NBCUniversal’s Linda Yaccarino (right) who says the move is all about making the “experience better for viewers.”   And that includes consumers, marketers, and the industry.

Not to be outdone, Fox Network Group’s head of advertising sales – Joe Marchese (left) – announced yesterday his goal to cut TV ads to just two minutes an hour by 2020.

(Maybe KNDD’s “Two Minute Promise” is catching on.)

In a Wall Street Journal story, writer Alexandra Bruell suggests the obvious –  with only two minutes of ad inventory, Fox would have to raise it rates considerably in order to avoid financial disaster.

But another Fox sales executive, Ed Davis, told the Journal that perhaps the real challenge will be to alter the messages and their purpose.  That will require a whole new way of thinking about marketing on commercial television:

“Creating a sustainable model for ad-supported storytellling will require us all to move.”

 


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