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Less commercial time on TV doesn't mean fewer ads

Pizza Hut commercial with Bobby Moynihan from SNL
Source: Pizza Hut YouTube Channel
Pizza Hut commercial with Bobby Moynihan from SNL

As more TV viewers fast-forward through commercial breaks or watch on digital platforms, networks are finding the tried-and-true 30-second commercial has to evolve.

During its upfront presentation in May, Turner announced that it has removed two hours of traditional commercials year-to-date. The changes are going to be more drastic for TNT Originals and TruTV shows, which will commercial time almost halved later this year.

"The ad experience on ad-supported TV, there's just too much of it," said Dan Riess, executive vice president of content partnerships and co-head of Turner Ignite. "That is turning off certain viewers, and we need to do better."


But that doesn't mean there will be fewer ads on Turner. Instead of 30-second spots, it's building more branded content into its shows. Minute-long episodes of "Cat Dick Mysteries" on Adult Swim are brought to you by nonprofit Truth. The TBS reality series "America's Greatest Makers" was created in conjunction with Intel. "Ride Along 2" stars helped on segments on "Conan."

During its upfront, it announced Team Coco Digital Studios. The group, lead by "Conan" show management, will create content for brands with a social media focus. Riess didn't discount the possibility that some pieces may be able to make their way onto "Conan" as well.

"(Commercial time is) a little fat, so one strategy is to go on a diet and cut the ad load," Riess added. "Or, you have to work out. You work with brands to tell better stories without interrupting the (viewing) experience, but add to it."

Cutting two hours of commercials is a drop in the bucket. But, as more viewers fast-forward through commercial breaks or binge watch on ad-free digital platforms, it makes sense.

What's more, branded content is more expensive to buy than traditional commercial time, which means more revenue for media companies. And, because these pieces are often short, snackable segments, the same clips are already optimal for social media.

Turner isn't alone. Fox touted at its upfront presentation in early May that it will have fewer 30-second ads on some new shows on its cable networks FX and National Geographic Channel. It will also experiment with less time on Fox, something it has tried since 2008. Currently, its top show "Empire" runs with fewer commercials than its other shows.

On the other hand, over the past year or so Fox has unveiled more initiatives like Fox Sports Engage, which disseminates branded content on social and TV. It's also experimented with folding in advertisers into shows, including a storyline on "Empire" about creating a Pepsi commercial. NBC Universal, CNBC's parent company, has announced plans to cut ad loads as well. In April, NBC said it would air 30 percent less ads on "Saturday Night Live."

Earlier in March, it announced it would launch the NBCU Content Studio to develop and produce branded content using the company's proprietary data. The company has other divisions that create brand-led, cross-network content, including the NBCUniversal Content Innovation Agency. There are also initiatives like the NBCUniversal and Vox Media digital advertising technology platform, Concert.

For example, the company launched a cross-show ad experience in April to promote both Chrysler's Pacifica and Universal's movie "The Secret Life of Pets." The campaign included segments on "TODAY" and commercials staring "Late Night with Seth Meyers" host Seth Meyers. The car and the movie also had content that ran on Vox Media and BuzzFeed, which NBCU had made investments in during 2015.

In May, it ran a commercial for Pizza Hut during "SNL's" Bobby Moynihan during "SNL," that blurred the lines between being a show segment and an ad.

And, Variety reported that Viacom would cut its primetime ad time from 17 to 18 minutes per hour to 14 to 15 minutes in September 2015. Meanwhile, its Viacom Velocity team works across its networks — including VH1, MTV, Comedy Central, Spike, CMT and TV Land — and uses its data analytics to create content for brands.

"It is super important for us to dig deep on data and insights to create something that is custom delivered for the audience where they will consume the content," explained Niels Schuurmans, executive vice president of creative for Viacom Velocity.

Velocity's productions end up on digital, including Snapchat channels or Facebook pages. It also creates TV-length content or materials that end up on TV. "Million Dollar Maze Runner" was a 30-minute online special where contestants competed for $1 million and a new car. Red Bull worked with "Workaholics" stars on Comedy Central.

"It's become really complicated for marketers out there to gain consumers' attention across a variety of different media, but [branded content] is also liberating in the way that you connect with consumers creatively," said Dario Spina, executive vice president of integrated marketing at Viacom Velocity.

Still, while the commercial may fade away, Turner's Riess admits most brands still opt for that model for now.

"It's still an early stage movement," Riess said. "It's not packed into their ad budgets."

Still, he believes branded is the way of the future.

"We know this content works on social and digital," Riess said. "The value is there — and (advertisers) believe in content as a way to connect with their audience."

Disclosure: NBC Universal is the parent company of CNBC.