TV networks are under increasing pressure to maintain profit margins and distribution while also adapting to the expectations of viewers who are swimming happily in a sea of ad-free streaming content.
Fox acknowledged that reality this week, becoming the latest network to state its goal of reducing ad time, joining NBCUniversal, Turner and Viacom in the effort to slim down. Ad chief Joe Marchese said his team would actively explore getting down to just two minutes of ads in each primetime hour by 2020. He floated that eye-opening scenario — accounts from attendees differ as to whether it was a trial balloon or an actual proclamation — during an industry summit organized by the company. The event drew ad agencies, tech vendors and other stakeholders in the $75 billion TV ad business.
What sets the Fox objective apart from other ad-reduction efforts is its ambition, especially given the fact that overall commercial time has been on the rise despite widespread acknowledgement that it’s not helping lure viewers. Getting to two minutes would also mean a drastic reduction from Fox’s current levels — Pivotal Research Group estimated that the broadcast network ran an average of 10.6 minutes an hour during January.
“The goal is to reduce ad time but also maintain or increase effectiveness,” Ed Davis, Chief Product Officer for Fox Networks Group Advertising Sales, told Deadline in an interview. “We want to get to two minutes because it will unlock a sustainable solution.”
Such a solution, he said, would require a collective willingness to experiment. Fox Sports has been trying some new approaches during NFL and Major League Baseball broadcasts, running 6-second ads and “two-box” spots with picture-in-picture graphics keeping viewers connected with the action during commercials. (AMC has also run 6-second spots during The Walking Dead, and NBC deployed them during the Winter Olympics last month.)
Executives have attempted to tackle the issue before. Turner boss Kevin Reilly had earlier championed the tactic during his Fox tenure, in fact, using the shows Fringe and Dollhouse as initial test cases. In a 2016 interview with Deadline, Reilly said it would take time for the initiative to be fully implemented at TNT. “The problem is that it is a multibillion-dollar issue for us, so we can’t just wave a wand,” he said.
Davis said Fox’s ad team is focused on pointing out to advertisers the inefficiencies of many buys. “Overall ad time has increased because of frequency and waste,” he said.
Instead, he said, the goal will be to come up with a mosaic of approaches, everything from integrations into programming (like Pepsi’s on Empire), data-driven targeting and innovation around the way brand messages are promoted. While he stopped short of a guarantee, Davis said some brands could pay more for ad real estate depending on a host of factors, including adjacency and exclusivity. Fox, he said, has gotten active in the laboratory measuring “field of vision” and “attention transfer,” looking for any ways to assure brands of maximum impact.
The crude math of shrinking ad time so dramatically means an ad that runs a few hundred thousand dollars would suddenly need to command a price in the millions. But rather than just focusing on units and pricing, Fox is working to identify new sources of revenue, by refining audience measurement and following the path of the on-demand world, where ad loads are lighter but rates are healthy. FX last year said it would not sell the same linear ads for its on-demand and digital programming, an acknowledgement that viewers have different assumptions about the ad experience on those platforms.
“There’s a trend in the industry to ‘get to the right answer,’” Davis said, “but the ‘right answer’ actually is made up of several different parts. Our strategy has been to put these pieces on the board and start to assemble the right strategy.”