This raises the cost for advertisers and those who provide access to the customer. But if the personal information and 'eyeballs' is really worth it they will pay up - or not. JL
Sydney Ember reports in the New York Times:
The proliferation of on-demand and ad-free streaming options has given viewers a more palatable television experience and prompted networks to rethink advertising, whether by reducing the volume of traditional commercials or coming up with new ways to advertise: an strategy that involves more programming sponsored by brands — as already online — and fewer traditional 30-second commercials.
Monday’s season premiere of the NBC reality singing competition “The Voice” will include a bonus interview with last season’s winner. During “Blindspot,” the hit hourlong drama about a mysterious tattooed woman, there will be interviews with the show’s creator and two of its stars. The “Today” show will feature an extended segment with Kathie Lee Gifford and Hoda Kotb, and “Late Night with Seth Meyers” will have an additional comedy sketch.The extra programming will eat into time typically occupied by commercials. But those additional segments will actually be ads in their own right, brought to you by American Express.The move by NBC may be a bit of a gimmick — after all, the extra programming on leap day, Feb. 29, will add only 11 more minutes of content over all. But it could also provide a glimpse into the future of television advertising. Long dependent on conventional commercials, television networks are now re-evaluating their advertising strategies as fears about cord-cutting and steep ratings declines intensify.“We see a great challenge but also a great opportunity to reinvent what the advertising experience can look like in different shows and in different environments,” said Alison Tarrant, executive vice president for client partnerships at NBCUniversal.In recent months, Turner, which is part of Time Warner, and Viacom, which owns MTV, Comedy Central and Nickelodeon, have said they were looking to reduce the amount of advertising on their cable networks. Vice Media, which will introduce its new cable channel, Viceland, on Monday, has adopted an advertising strategy that involves more programming sponsored by brands — as it already has online — and fewer traditional 30-second commercials.The shift in TV advertising is likely to happen gradually, but it has also been a long time coming. For years, networks crammed in more ads, in part to offset lower ratings, said Brian Wieser, a media analyst at Pivotal Research. Commercials on broadcast networks accounted for 17.3 percent of programming time last year, from 16.8 percent in 2012 according to Mr. Wieser’s analysis of Nielsen data. On cable networks, commercials accounted for 20.6 percent of program time, from 19.3 percent in 2012.That strategy, however, may have pushed away more viewers and lowered ratings further.“You never know that the ratings fell because of it, but your intuition and every bone in your being says it must have had some effect,” Mr. Wieser said.The proliferation of on-demand and ad-free streaming options has given viewers a more palatable television experience and further prompted networks to rethink advertising, whether by reducing the volume of traditional commercials or coming up with new ways to advertise.“Now I think is the time that we really need to take a look at where we are with what the consumers are looking for and what their behavior is,” said Donna Speciale, president of ad sales at Turner. “The experience right now on television across the board is just not what it should be — it’s not ideal.”Ms. Speciale says Turner is in the process of testing different options to limit commercial time — including reducing the number of commercial breaks and presenting some shows entirely ad-free — with the goal of running eight to 10 more minutes of programming per hour during certain shows on truTV and TNT. The company aims to cut truTV’s ad load in half during original prime-time shows, starting in the fourth quarter.But the ad-reduction strategy carries a risk. While advertisers may pay a higher price for commercial time that is in more limited supply, the price may not be enough to offset the decrease in commercial time.During an earnings call on Feb. 9, Philippe P. Dauman, the chief executive of Viacom, said the recent reduction in the number of ads on the company’s networks “might have suppressed some of the short-term advertising growth.”Still, the television industry’s fledgling efforts to make the traditional television viewing experience less commercial-heavy have resonated with marketers and advertising agencies. Ms. Speciale says her company’s plans to reduce the ad load on its networks have garnered kudos from clients, even before any changes have fully taken shape. “We’ve been getting applause across the industry from clients and agencies basically saying, ‘Thank you, and we agree with it,’ ” she said.Joe Bihlmier, vice president of global media at American Express, said he saw the partnership with NBC as an opportunity to “create a different paradigm” for television advertising in a fragmented media world. Sponsoring segments rather than running a 30-second spot during a crowded commercial break could also help American Express stand out, he added, because it will not be competing for attention. BuzzFeed, which secured a $200 million investment from NBCUniversal last summer, will produce online posts related to the sponsored programming.American Express, which approached NBCUniversal with the advertising idea in December, will use the segments to promote its Blue Cash Everyday credit card.If NBC’s sponsored-content strategy is successful, it could become a model for other networks. But Ms. Tarrant also said the industry as a whole had to be willing to experiment.“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.”
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