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Well, another year has passed and—surprise, surprise—linear TV is still with us. Sure, the amount of all-daypart, all-channel viewing time is slightly down, and the five broadcast networks, whose primetime fare accounts for perhaps 10% of the average person’s total time spent with TV, are still suffering 7-9% average minute rating declines in the “key” adult 18-49 demo, but so what? That seems to be the attitude of most national TV advertisers in the 2018-19 upfront, where the broadcast TV and basic cable channels took in more dollars than ever before.
People might wonder how pathetic, old-folks TV continues to appeal so strongly to advertisers. Aren’t they aware that Netflix has totally disrupted legacy TV and that binge viewing is the new normal? Or that nobody watches TV commercials any more, instead turning to their smartphones the minute a commercial break appears? Since advertisers are always “following the eyeballs,” aren’t they aware that all eyes are now focused on digital screens?
Unfortunately for digital ad sellers, these claims have not panned out. Many TV advertisers have finally taken a closer look at digital media and have not found it to be very ad-friendly. And the massive flight of viewership to digital platforms has not materialized. Rather, the migration has mainly been to Netflix and other SVOD services, and most of this viewing time was of ad-free content. Sorry folks, Netflix, which accounts for 6-7% of the average adult’s total TV consumption, doesn’t take ads. Not yet, anyway.
Many of the digitally-inspired initiatives to reshape TV advertising rely far too heavily on technology and not enough on understanding people as viewers, but there are signs that many of these ideas—adapted to the realities of advertising and media time buying—are taking hold. For example, the various TV networks are finally trying to account for all their viewers in dealings with advertisers, including those reached on digital platforms. At present, such digital audiences are relatively small, but they are growing, and it’s perfectly fair for the sellers to try to monetize them. But is ad exposure on a smartphone comparable to that attained on a large screen TV? That question has yet to be answered.
Cord cutting, which has been ongoing over the past five years, is another key issue. For a variety of reasons, including the need to save money, millions of people have cancelled their cable subscriptions and have looked for cheaper means to obtain TV/video content. Wired cable subscriptions now stand at about 50% of the country, down from highs in the mid-60s about a decade ago.
The digital people portray this as one more sign that the public is fed up with legacy TV and its burdensome commercials, which is true for some cord cutters. There is also the widespread notion that countless millions of homes would prefer to pay only for those channels that they watch, which is pegged at about 17 channels on average, per a misreading of Nielsen weekly set usage tabulations (over longer periods a typical person samples many more channels). The reality, however, is that in order to satisfy an entire family’s interests, cord cutters would likely have to spend twice as much as their old cable bundle cost, with access to fewer channels.
While linear TV is doing quite well at present, it clearly needs to evolve its digital footprint, as well as its approach to time buying and selling. Old programming concepts and the inclination to go with “proven” content suppliers must also be seriously rethought.
TV Dimensions 2019, which will be released later this month, covers many of the points raised here in some detail. As we have pointed out, TV is undoubtedly headed for major changes, hopefully to the benefit of both audiences and advertisers, alike; this edition is designed to give readers the tools to evaluate the impact of these changes for themselves.
Of late, the broadcast TV networks have touted the reduction of TV commercial loads in primetime, as well as the introduction of premium spots in low clutter breaks. This is all good, but a recent UBS analysis of Nielsen data—as reported in MediaPost—suggests that despite these efforts, ad clutter is on the rise.
According to the report, three of the major networks (ABC, CBS and NBC) posted annual increases in commercial clutter from 2016-18, led by NBC, with its commercial minutes per hour increasing 4.4% in 2017 and 3.6% in 2018. Fox bucked the trend, posting commercial minute reductions of -3.1% in 2018 (and smaller reductions in previous years). Across all four networks, commercial minutes per hour increased 1.5% in 2016, 1.9% in 2017, and .7% in 2018. As a point of comparison, the cable networks, in aggregate, showed increases of 1.6% in 2016 and 2018, with a slight dip (-.3%) in 2017.
While the major nets have gotten traction in the trades with their premium spots and supposed clutter reduction in primetime, the numbers have yet to bear this out. It should be noted that the UBS data were for total day, which may indicate that perhaps commercial loads are lightening in primetime, but that other dayparts are taking up the slack (and then some). It will be interesting to see if the hype eventually leads to any real changes.