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Making the Same Money With Fewer TV Ads

Marchese: Engagement is key in on-demand world 4/11/2016 8:00 AM Eastern

New York — TV’s ad future in an on-demand world doesn’t have to be a bleak one, if the industry can come up with ways to reduce heavy ad loads to levels that are more tolerable to viewers.

 

“I think the promise of advanced advertising is not to make more money; the promise of advanced advertising is to make the same money with a lot less ads,” Joe Marchese, president of advanced advertising products at Fox Networks Group and the founder-of true[X], said during a keynote chat here April 5 at the Multichannel News/Broadcasting & Cable Advanced Advertising and Measurement Summit.

 

Marchese listed the threats to ad-supported programmers if they don’t find better ideas than loading programs up with 30-second ads: ad-blocking technology, ad-skipping DVRs and a wide range of ad-free subscription streaming services. Avoiding advertising has never been easier for the consumer, a trend that obviously does not bode well for the future of the TV ad model.

 

Marchese, of course, sees the true[X] platform, acquired by Fox in 2014, playing a key part in that future by making ads more immersive, interactive and engaging.

 

Fox’s true[X], which recently struck a deal with Hulu, gives viewers the option to pick an “engagement” spot versus a heavier, more traditional ad load, ensuring that the message from the advertiser is relayed to the viewer.

 

More than 80% of viewers opt for the interactive ad experience when given a choice, depending on the show, Marchese told Broadcasting & Cable business editor Jon Lafayette during the Q&A.

 

“The real mission for advanced advertising is to get advertising to a place where it’s at a tolerable level for consumers … at a price point that allows us to reduce the ad load enough to save the industry from itself,” Marchese said during a lively session.

 

Ads delivered in this engagement model carry a premium price, “but we remove more ads than the price point that we charge higher for,” he added.

 

Traditional TV and approaches are ripe for change as more and more viewing occurs on demand.

 

“I think that the 30-second spot goes away because time becomes variable,” Marchese said, noting that the industry is still in the early stages of interactive storytelling. “When you [offer] an immersive experience, you can do 60 seconds, 90 seconds… You could do a two-hour feature-length movie if you like. What you’ve done is, you’ve bought attention, you bought someone’s time on an interactive screen.”

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