Commentary

I Am Television Advertising, And I Have A Problem

This week, NBCUniversal did the brave thing. In front of a room full of advertisers, agencies and even other (TV) advertising platforms, Linda Yaccarino, NBCU chairman of ad sales and client partnerships, said, in her opening address to the (self-organized) State of the Industry Forum: “I’ll cut right to the chase: We have a problem.”

The problem that Yaccarino and NBC Entertainment Chairman Bob Greenblatt sketched: On one side, there’s more and more entertainment content that does not rely on advertising revenue. And where there is advertising, it is so terrible that it turns off consumers to the degree that they are driven even faster to these new, non-ad-revenue-supported entertainment platforms. And that is bad news for advertisers, agencies and TV networks.

“Consumers are running away from advertising in droves,” Greenblatt said. “That’s the issue of the moment. We need to get to a point where people watch ads for a reason, and there is much less interruption.”

It is of course way too simplistic to state that bad advertising is to blame, and that a simple improvement of the actual advertising will reverse the current trends.

Mind you, I am not saying that ad quality does not matter. It does, a great deal, and today most advertising is very skip-worthy.

But bad advertising is not to blame. Bad television is. The non-advertising-revenue-dependent platforms are attractive to consumers because the content these platforms offer is so far superior to what the networks and most cable channels offer, it’s almost no contest. That there are no ad interruptions is almost a bonus.

Just look at the Emmys: The number of non-network nominees, and winners, has been staggering. The amount of money being spent on content by non-network platforms runs into the billions (pick your poison among Hulu, Netflix, Amazon Prime, etc.).

And what do the networks offer? More “NCIS” and a “Roseanne” reboot.

The fact that it’s all about content is also being proven by the decline in marketers’ interest in cheap digital reach. Digital content providers as well as ad tech and digital media agencies are all facing serious declines in ad revenues, especially in margins. Advertisers are trading click bait and alleged mass digital reach for quality reach and a desire for more transparent, brand-safe environments.

Many claim the lack of one measurement currency across all platforms is another significant problem. However, in the olden days, we were ruled by the GRP in traditional media. But in very different touch points, we used very different measures.  Direct marketing, for instance, was never measured in GRPs. Neither was in-store marketing. And I don’t recall there being pressure on the Direct Marketing Association to move to a GRP standard.

Traditional TV is losing audience and relevance, which is bad news for marketers who depend on advertising to reach consumers and sell products. But the lack of a singular measure, as well as “crappy advertising,” are not the reasons for what’s happening. TV needs to evolve to become more like the platforms that people like, both in content strategy as well as presentation and distribution strategy.

Step one is admitting you have a problem. Now start innovating!

7 comments about "I Am Television Advertising, And I Have A Problem".
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  1. Jerry Gibbons from Gibbons Advice, December 1, 2017 at 2:01 p.m.

    Not only are so many of the ads bad enought to run viewers off, there are so many ads that they often disrupt the flow of the shows.  People are killing the the goose.

  2. Robert Barrows from R.M. Barrows, Inc. Advertising & Public Relations, December 1, 2017 at 2:40 p.m.

    Toward the end of your article you talk about the difficulty of measuring and comparing the effectiveness of various forms of advertising. The best way to measure the effectiveness of any kind of advertising is with some easy-to-use advertising math that will actually let you  QUANTIFY the relationship between your advertising and sales.
    The math is called "The Barrows Popularity Factor."
    The math can help all kinds of businesses make a lot more money. Plus, the math is extremely easy to use. All of the calculations can be done by one person, in moments, with just a simple calculator....and as they say in advertising..."It really works!?" You can read all about it in a booklet called “The Barrows Popularity Factor."
     

  3. Ed Papazian from Media Dynamics Inc, December 1, 2017 at 4:28 p.m.

    NBC has a "problem". While its TV newtork , owned stations and cable channels are making a fine collective profit between them, the goal is to sustain and, if possible, increase overall profits  by getting as many ad dollars as possible----in addition to non-ad revenues from profit sharing deals with producers, retransmission fees, and subscription incomes from the new "skinny bundles" and/or new streaming services. So, very smartly, NBC---like other TV ad sellers-----is exploring ways to increase the CPMs for all of its eyeballs---the good, the bad, and the ugly----as well as getting credit for out-of-home audiences, extended delayed viewing, and any digital or streaming viewership for the commercials it sells to national advertisers.

    Can't argue with any of that. I'd do exactly the same thing were I in NBC's place.

    Regarding the added audiences fom OOH, delayed viewing and other venues, this is a fair point for any TV ad seller to raise, but the main issue is a technical one as there are serious questions about the compatibility of the "audience" metrics for OOH and other non-linear "viewing" that need to be dealt with. This will not be an easy task as the measurement for OOH is potentially highly inflationary and digital "page views" are simply not acceptable as surrogates for commercial viewing.

    The most interesting thrust, which, so far, has attained only limited traction, is the introduction of "audience buying" or "advanced targeting". Here, the network is skillfully exploiting the fact that set usage ratings create the illusion that its viewers are mainly younger-middle aged and middle income to upscale---as such households use their sets more often than older and lowbrow homes---which the network---like almost all of broadcast TV---- has an abundance of. By applying product user indices ,based on "big data" set usage tallies, to Nielsen's viewer ratings, to create a buying/selling "currency" the seller automatically upgrades the "value" of all of its audience---in the eyes of advertisers---and, hopefully can charge more for "targeting" them---when, in reality, all the network has to sell is the  aggregation of some valuable prospects and many less valuable ones that it now reaches. Again, I commend NBC and others who are trying to go in this direction. It's a smart move and it may work---to some extent.

    Finally, the plea for "better" ads is the same nonsense we have been hearing from digital media people who blame advertisers for driving  users to ad blockers rather than accepting the fact that the way that digital ad placements disrupt the user experience is the real issue. Here, I regard NBC's plea for "better" ads as mere bluster. What about giving us "better" programs to watch---then "we" wont go running to Netflix?

  4. Paul Silverman from Ennly- Mar, December 2, 2017 at 12:20 p.m.

    Clutter too.  Ever try to watch a movie on a commercial cable network (no offense to anyone specific).  Just too many interuptions.  I find myself seeing that a movie is on a cable network and then going and renting it from Amazon.  Worth paying for to get rid of the way too many breaks and commercials. 
    I get it.  When ratings go down, then need more commercial time to make revenue goals.  It's a spiral and it is part of "killing the golden goose" as you say.   Same old problems.  Tough to find the answers. 

  5. oded napchi from hiro-media, December 3, 2017 at 7:52 a.m.

    i think this netflix effect - netflix offer very cheap - non economical - model that entities that try to be economical can not offer. once the bubble of netflix will burst ad supported will return.

  6. Douglas Ferguson from College of Charleston, December 4, 2017 at 10:31 a.m.

    What would be that "reason" why I would *want* to watch an intrusive message? This ain't 1989. I've got choices and no time for interruptions. I choose to skip ads or avoid them by watching ad-free content. The goose, Jerry, is comatose.

  7. Thomas Villing from Villing & Company, Inc., December 4, 2017 at 12:34 p.m.

    There are many facets to this article. I will simply address one. To be sure, there is a great deal of bad advertising, but that has always been the case to some degree.  I believe the strongest driver of consumers away from traditional TV is the proliferation of political and advocacy advertising.  This totally unregulated advertising with its falsehoods and negativity is probably as annoying to those who agree with its message as it is those who disagree.  While the broadcasters are more than happy to milk the golden cow for all the revenue they can, they are also hastening its demise.  

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