Jim Rutenberg reports in the New York Times:
Two-thirds of viewers watch with a second screen either in their hands or on their lap. Yet those screens can be so distracting that their users forget to fast-forward past the ads in recorded shows. It turns out viewers are overwhelmingly absorbing the messages coming from the TV even as they stare at the other devices
For decades the annual television industry ritual known as the upfronts has gone the same way.Thousands of advertising and television executives trudge between New York’s great cultural centers — Carnegie Hall, Radio City Music Hall, Lincoln Center — where network executives screen premieres of their hottest new shows (“24: Legacy” on Fox! “Designated Survivor” on ABC!); trot out their biggest stars (Jennifer Lopez! Kerry Washington!), and disclose which programs will go where on the prime-time schedules being set for the fall.After successive nights of upscale hedonism — steaks at Peter Luger, mango chili martinis at Tao and Nicki Minaj at Terminal 5 — the ad people and the TV people get down to the real business of cutting deals for the 30-second spots that run during prime time’s commercial breaks.But when the whole shebang kicks off in earnest on Monday morning, there will be an underlying sense of seasickness because of the inexorable, existential question that now faces television this time of year: How long can it go on like this?This queasiness was your doing.Maybe it was when you flipped your television input over to your Apple TV last night to watch the commercial-free “House of Cards” on Netflix, or when you perused the recorded version of “Saturday Night Live” after work on Monday and fast-forwarded through every real ad. Maybe you forgot TV altogether and watched YouTube instead.When you started using all the new technology to watch shows on your own terms, and to stop viewing commercials, you threw into question the modus operandi of a roughly $70 billion industry that has been remarkably stable for decades. The billions give television the room to maintain business as usual in the middle of this change-tsunami in a way that, say, newspapers can’t. But some sort of reckoning seems inevitable.In the not-too-long run, network television could come to look nothing like it does today. Maybe you will be surfing apps instead of channels, as the Apple chief executive Tim Cook predicts, skipping between shows that don’t have commercial breaks or hard-and-fast 30- and 60-minute time limits.That would have big consequences for those who have stuff to sell and who still view television ads as the best way to do it — and equally big consequences for traditional television’s gatekeepers.Continue reading the main story
In the short term, as in this coming week of television brinkmanship, bets on where it will all end up, and how much of a reckoning is already upon us, will drive the negotiations for what could be more than $9 billion in advance advertising purchases for the coming fall season.The opening move came from Magna Global, one of the biggest ad-buying firms in the world, which told The Wall Street Journal two weeks ago that it was shifting $250 million of its clients’ ad dollars to YouTube from traditional television.That’s a fraction of the many billions Magna spends on television every year for clients that include Coca-Cola and Fiat Chrysler Automobiles. But it was a large enough diversion of television dollars to digital media to be of real symbolic importance. Magna pointed to declines in old-fashioned television viewing among those between the ages of 18 and 49, who are important to advertisers.“What we are trying to do is signal to the market that it is not business as usual,” David Cohen, the United States president of Magna Global, told me last week. “Consumers have over the past several years been migrating away from linear television, and we need to acknowledge that.”Network television executives saw the announcement as something else: a savvy negotiating ploy just as the upfronts were to begin. They could point to motive.For all the talk like mine in this column about the future of television advertising, in the here and now industry executives and analysts expect ad rates to spike in the coming upfront deals for the first time in several years.David F. Poltrack, CBS’s chief research officer, says this is partly because advertisers went too far last year. Enthralled with digital advertising, they committed to less commercial time in the upfronts. Disappointing retail sales in 2015 followed.Economists pointed to factors like rising health care costs and stagnant wages. But Mr. Poltrack said the advertising pullback had a role, too.Advertisers seemed to agree, at least in part, especially amid debate about the true reach of digital media. (As American Express told Advertising Age last month, it found that the effect of one day of broadcast advertising was equal to that of two weeks of digital.) And over the ensuing months advertisers jumped back into television to find higher prices than they would have paid had they spent more to begin with.Mr. Poltrack said it augurs a strong upfront, driven by a fundamental lesson: “If less people see your advertising, you will sell less things.”Still, there’s the question of who will actually “see your advertising,” given that it’s now easier than ever to tune that advertising out. Television executives like Mr. Poltrack are spending a whole lot of time studying that.Some findings are counterintuitive. For instance, Mr. Poltrack said, two-thirds of viewers watch with a second screen either in their hands or on their lap. Yet those screens can be so distracting that their users forget to fast-forward past the ads in recorded shows. It turns out viewers are overwhelmingly absorbing the messages coming from the TV even as they stare at the other devices, Mr. Poltrack said.Nielsen data does show that those between the ages of 18 and 49 skip fewer than half the ads in recorded shows (42 percent). But two different sets of Nielsen data I saw also showed their overall commercial viewing down by 8 or 11 percent this television season, depending on how you slice it, compared with last year.Those numbers cause people like Joe Marchese, the executive leading the Fox Networks Group’s effort to develop new approaches to advertising (such as offering audiences an option to view one interactive ad at the start of a show in exchange for no more advertising interruptions thereafter), to declare, as he did to me last week, “The social contract is broken with the consumer — they don’t want to watch the ads.”And it explains the sense of urgency I found on the 51st floor of 30 Rockefeller Plaza on Thursday morning, where NBCUniversal’s chairwoman of advertising sales, Linda Yaccarino, was overseeing the final touches on NBCUniversal’s upfront presentation.Ms. Yaccarino was planning the biggest change in decades to the way NBC does its presentation. Instead of walking advertisers through NBC’s nightly schedule in isolation, it will focus instead on which combinations of shows on NBC, NBC’s sister cable networks, and cable on-demand systems like that of its parent, Comcast, will reach particular audiences. (It will throw in options from its investment partners BuzzFeed and Vox Media, too.)“You will not hear ‘Monday night at 8; Tuesday at 9,’” she said. “You’re going to see our content presented the way audiences seek it out and consume it.”She is operating under the assumption that today’s robust commercial breaks will not be around in their current form much longer. “I tell my whole team, ‘We’re hanging on to them by our fingernails,’” she said.That’s why NBC announced last month that it would remove about 30 percent of the commercial time from “Saturday Night Live” next season. It will seek to make the money back by giving advertisers occasional opportunities to sponsor bits based on whatever it is they’re selling. If it’s done right (and one assumes the “S.N.L.” producer Lorne Michaels will accept no less) the audience won’t even notice the sponsorship, which could come as a spoof based on the advertiser’s product.And that’s where it comes back to us — and I say “us” because I, too, prefer my television ad-free. With the exception of shows on public television or subscription services like Netflix and HBO, commercials pay for the shows we like. If we cut that off, we push television executives into new levels of subliminal trickery. Maybe we’ll decide that’s a fair trade.
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