Golden Goose Eggs
Could clutter kill the advertising business as we know it? Arguably, advertising bombardment already drives millions of television viewers to Netflix and other advertising-free alternatives, prompting them to cancel their cable subscriptions and to fast-forward through commercials.
On the internet, advertising clutter is causing ‘banner blindness’ and propelling rapid growth in the incidence of ad blockers being installed on digital devices.
There is no doubt that advertising loads are increasing. The 51st Super Bowl, a major US sporting and television event, took place on Sunday February 3rd It was estimated to be the fifth most watched game of all time, with 111.3 million viewers. Generally, a Super Bowl game is played for around an hour with (astonishingly for non-Americans) less than 15 minutes of actual live play and a lot of what looks to a non-devotee of the sport like standing around...
Yet the broadcast event can easily last four hours or more. In 2017, 51 minutes and 30 seconds of this broadcast consisted of advertising and promotions.
And this is normal. The average commercial load in a minute of prime time network television in the USA is around 14½ minutes; on cable networks it is often higher.
The number has been rising and it’s not hard to see why. Advertising ‘supply’ on television is a product of audience ratings and the number of commercial minutes offered for sale. When audiences fall therefore, TV networks need to either raise the number of minutes sold or increase the price charged if they are to stabilise revenues.
And audiences to many of the biggest individual networks have indeed been falling. The ‘Big Three’ networks in the US, for example, have seen their combined audience share plummet from 60% in 1960 to just 13% last year). ITV and Channel 4, the UK’s largest commercial networks, have seen steadily declining shares in recent years, as has TF1 in France.
One reason for this has been the rapid rise in viewing to OTT networks. Netflix announced that it had added a record number of new subscribers worldwide in the fourth quarter of 2016, reaching more than 89 million, up from 54 million in 2014. Others, such as Amazon Prime and Hulu are growing too.
Another negative factor has been the fast-forwarding of ads. Half of all homes in the USA have DVRs. Time-shifted viewing represents about 11% of all viewing time (averaged across the whole population). And for this viewing, according to research carried out for IPG MediaBrands in early 2017, skipping past skippable video ads has become “ingrained behaviour” for most people.
So raising advertising minutage has proven to be a more popular response to falling commercial audiences than raising the price of advertising.
In most European countries though, TV stations cannot simply increase the number of commercial minutes they sell. There, the number of ad minutes has long been capped at 12 minutes an hour via an EU directive – although this has recently been relaxed to allow stations flexibility to have more or less minutes, as long as the average does not exceed 12 minutes.
In the UK, major channels may only show an average of seven minutes an hour; though they can stretch to a maximum of 12 minutes in any one hour.
Digital advertising expenditure has risen by leaps and bounds in recent years. One of the consequences has been that the amount of advertising appearing on user screens has increased equally rapidly. In many cases, of course, users simply ignore it: eye-tracking company Lumen found in a study that only 9% of advertising ‘served’ actually had eyes laid on them for more than a second (4% were looked at for more than 2 seconds).
To the extent that these findings are projectable more widely, this suggests that some 9 out of 10 digital ads served are not being noticed at all.
Some people are seeking to block out ads altogether. Estimates by PageFair suggest that more than 600 million devices globally have installed special ad blocking software – representing around 11% of internet users and growing rapidly. The figure in major industrial countries is higher – e.g. 18% in the USA, 29% in Germany and 28% in India.
It effectively means that it is all but impossible to reach important sections of the population via digital campaigns. Many of those installing ad blocking software can be expected to be younger, more tech-savvy users who are important targets for advertisers.
Print and Out of Home media have long allowed audiences to avoid looking at advertising by simply turning the page or passing on by. In the case of print, the eggs have turned decidedly un-golden in recent years. But it is important for commercial TV networks and website publishers to remember the story of The Goose That Laid the Golden Eggs. Don’t kill it!
