Commentary

Will Less Clutter, Shorter Commercial Pods Matter?

by Steve Sternberg , Featured Columnist, May 22, 2018

Despite some headlines that might indicate otherwise, the broadcast networks are still by far the highest-rated platforms for TV/video programming. But there’s no question average ratings continue to decline, and that commercial avoidance (through DVRs and streaming services) is easier than ever.

Is reducing commercial loads part of the answer to making TV advertising more effective? NBC and FOX seem to think so.

NBC has announced it plans to reduce prime-time commercial pods in original programming by 20% this fall. The reduction in ad time and pod lengths will apply to all prime-time original series across NBCU, which includes NBC, USA, Bravo, E!, Telemundo, CNBC, and Oxygen. The network will also be introducing something called Prime Pod., in which either at the first or last break of each prime-time episode will be a 60-second commercial pod. NBC will use artificial intelligence to match these ads through context targeting with program content (Turner has successfully used context-based advertising). This will be separate (i.e., more expensive) from the traditional ad buy.

FOX is planning to implement something it calls JAZ commercial pods (just “A” and “Z” pod positions), on Sunday nights, which will contain just two 30-second spots apiece. As is the case with NBC, FOX considers these separate products from its traditional ad buys, and they will cost more for advertisers. The network does not plan to make its shows longer to compensate for the reduced ad load. Instead it will create Fox Blocks, to contain branded content from advertisers. The network may also consider adding JAZ pods to Thursday night after football ends.

FOX has experimented with shorter commercial lengths before. Ten years ago, the network tried using 60- and 90-second commercial pods in its new series, “Fringe.” I was head of research at Magna Global at the time, and we were the first to partner with FOX on this ad format on behalf of our clients. The shorter national commercial pods were preceded by an announcement that the show would return in 60 or 90 seconds. We did extensive research to determine the effectiveness of these commercials.

The average adult 18-49 rating fall-off from the program segment to the commercial pod for “Fringe” was less than half that of the typical FOX drama — a major improvement in commercial audience retention.

We selected a random sample of 20,000 TiVo users from its opt-in panel, and 60% of respondents recognized that “Fringe” had shorter commercial breaks than other programs, while 34% of respondents saw the show’s advertisers more favorably (62% were neutral). Also, 56% of “Fringe’s” commercials were played back (compared to less than 40% for the average prime-time series at the time), and ad recall was nearly twice as high as any other drama airing that night on any network.

Despite paying a healthy premium, we were quite pleased with the results, but the program only lasted one season, as FOX thought it was too expensive to continue. It makes me wonder how the network can do this for several series, and what kind of premium it will be charging.

As far as paying a premium for less clutter, I would just say this. Advertisers have continually paid more almost every year despite declining ratings. If ratings decline by 20% next season, but advertisers get a 20% boost in viewer retention to commercials, it seems like a wash to me.

5 comments about "Will Less Clutter, Shorter Commercial Pods Matter?".

Check to receive email when comments are posted.

Ed Papazian from Media Dynamics Inc, May 23, 2018 at 10:57 a.m.
I beg to differ, Steve. I think that the networks are onto a really big idea on this one---if they handle it right. Firstly, they can't use audience drop-off and similar "soft" benchmarks to show the value of "premium" breaks. Nielsen can't measure commercial viewing and especially ad impact. The networks must---despite their fear of such measurements----show advertisers that the average message in a two-message break gains 35-50% in verified ad recall and message registration, hence it's worth at least that in terms of higher CPMs. Second, they must show such research to the advertisers media and marketing people as well as the agency media planners well in advance so they can consider how many GRPs to invest in "premium" as opposed to "regular, lower CPM, breaks---before the upfront starts. Otherwise the sellers are at the mercy of the buyers who, let's be frank, are buying corporate audience tonnage in most cases and are going to resist CPM premiums---even if they are justified.

I hope that the networks understand what a big idea they are onto and make the right moves. If they do, they can score significant ad revenue gains, while offering those advertisers that opt for the short breaks improved communication value.
Reply

Steve Sternberg from The Sternberg Report, May 23, 2018 at 1:20 p.m.

Hi Ed. Not sure how we differ.

Ed Papazian from Media Dynamics Inc, May 23, 2018 at 2:32 p.m.

Steve, you seem to be saying that the networks probably don't deserve a major CPM increase for the new, very short, breaks if their ratings dcline next year---if I read your last point correctly. I contend that no matter what the ratings are, the newer, much shorter commercial breaks should command much higher CPM increases compared to the "regular" breaks---if the networks lay the correct amount of pipe, supported by meaningful research---- not just with the buyers---who can be expected to resist---but with the clients and media planners. I fear that this was not the case this go around---which is a big mistake.

Steve Sternberg from The Sternberg Report replied, May 23, 2018 at 2:53 p.m.

Whe e did the research demonstrting less commercial avoidance and higher ad reall 10 years ago, that was a year before Niesen started measuring C3 and C7, and when DVR penetration was barely 20% of the U.S. Today, I think the networks shoud demonstrate that there is still a lift in ad recall before charging a makor premium. I would experiment over the summer and do the research before September.

Ed Papazian from Media Dynamics Inc, May 23, 2018 at 3:12 p.m.

I agree, Steve. If the networks think that they can just make a glitzy presentation to the buyers without fully documenting the value of the "premium" breaks and having them built in as part of the brands' plans---at higher CPMs----before the upfront, they are kidding themselves. I hope it's not too late to rectify this error---if this is what has happened----but if it is then the whole process should be restarted in preparation for next year's upfront as well as future scatter sales. It's too good an idea for them to blow it.