March 1, 2016
On Monday, NBC tested out a new concept: airing more content and fewer ads. Sponsored by American Express, the additional content included “Blindspot” interviews with the show’s creator and stars, and a segment with Kathie Lee Gifford and Hoda Kotb of the “Today” show. NBC isn’t alone; Vice Media has embraced a similar advertising strategy for its new Viceland cable channel. TV networks hurting from ratings declines and cord cutting are taking a serious look at swapping out 30-second spots for sponsored content.
According to The New York Times, Turner (part of Time Warner) and Viacom (which owns MTV, Comedy Central and Nickelodeon) are also looking into reducing advertising on their cable networks. Pivotal Research media analyst Brian Wieser says that networks have increased the number of ads to offset lower ratings.
Analyzing Nielsen data, Wieser reports that commercials on broadcast networks represent 17.3 percent of programming time, up from 16.8 percent in 2012; on cable networks, commercials are 20.6 percent of program time, up from 19.3 percent in 2012.
But the increase in ad time has most likely played a role in lowering ratings further by alienating viewers. On-demand and streaming are also offering viewers an ad-free means of consuming content. Those factors are combining to create more incentive for TV networks to re-examine their advertising strategies.
Turner ad sales president Donna Speciale reveals the company is testing options to cut back on commercial time, “with the goal of running eight to 10 more minutes of programming per hour during certain shows on truTV and TNT.” Another goal is to cut truTV’s ad time in half during original primetime shows, starting in Q4 this year.
“The experience right now on television across the board is just not what it should be — it’s not ideal,” she said.
Viacom chief executive Philippe Dauman notes that a reduction in the number of ads recently on the company’s networks “might have suppressed some of the short-term advertising growth.” But Speciale reports that her network’s plans to reduce ad time “garnered kudos from clients, even before any changes have fully taken shape.”
“We have to test to learn,” she said. “We need to be more nimble, we need to be more creative and we need to take more risks.” NBCUniversal executive Alison Tarrant adds that the network sees “a great challenge… But also a great opportunity to reinvent what the advertising experience can look like in different shows and in different environments.”