Murdoch: Industry Needs More Ad Innovation

Tells Zaslav He Favors Lower Ad Loads, Sponsorships
Murdoch and Zaslav at Paley_web_crop.jpg

New York – 21st Century Fox CEO James Murdoch said content providers have to find more creative ways to attract viewers to ads, along the lines of the recent partnership between its Fox broadcasting show Empire and Pepsi.

Murdoch, interviewed by Discovery Communications CEO David Zaslav at the Paley Center for Media’s 2015 Paley International Council Summit here, said that viewers aren’t rejecting ads, they just need to be more compelling to watch.

“What I haven’t seen enough of is ad innovation,” Murdoch said. “There are lots of creative ways to go about it, to connect brands with customers. I don’t think it’s right to give up on advertising entirely.”

Murdoch pointed to he Empire/Pepsi partnership, which will be weaved into the next three episodes of the popular show about the music industry. He added that Pepsi’s past relationships with music icons like Michael Jackson made it a natural fit with the show,

“It’s not inauthentic and it works within the narrative of the show,” he said.

While Empire is getting a lot of buzz, Murdoch said other innovations include Hulu’s ad-free option and its practice of giving viewers the option of either watching a 3-minute sponsored message before a show (and then the rest ad-free) or watching the show with normal commercial interruptions.

‘Given the choice, it’s a much better experience,” Murdoch said. “That’s where I see the future of video ads going, really earning [viewers’] attention demands and gets a premium.”

Murdoch also addressed a growing trend toward reducing ad loads for certain shows, a practice he said was a long time in coming.

“Probably the ad loads have been too high,” Murdoch said, adding that in India, which has a reputation of carrying huge ad loads for programming, Fox opted to offer fewer ads loads with great success.

Murdoch said today’s teenagers aren’t averse to watching ads; they just have to see a value in it. He pointed o the gaming industry, which gives players the option of either paying for a feature upgrade or watching an ad.

“The fear is around empowering customers, Murdoch said. “If we tell customers this is how we value your time, they step up right away.”

As an example he pointed to the Hulu ad-free experience, customers that opt to pay less to watch commercials complain less about the ads when given the choice.

“We shouldn’t be afraid of that,” Murdoch said. If we are transparent with pricing, we should do pretty well.”