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Why Ad Relevance Outweighs Ad Time for Local TV

April 6th, 2018   ||    by Susan Kuchinskas   ||    No Comments

Is this the end of TV commercials as we know them? Fox Networks Group recently declared its goal to reduce total ad time to just two minutes per hour by 2020. According to the The Wall Street Journal, the network’s chief of ad sales, Joe Marchese, told industry executives he’d like to see TV ads priced according to time spent with content rather than number of views.

The theory seems to be that too many commercials reduce the effectiveness of each commercial alone. While it’s certainly clear that ad overload is a bad thing, it’s possible Fox is selling itself—and the rest of the TV advertising industry—short.

That’s especially the case for local TV advertising because as local TV is more relevant, people tend to pay attention to the ads they see there.

Viewing Ads as Valuable Content

Local advertising is more relevant to the community because it’s based in the community. Every day, people need plumbers and pizza, dry cleaners and hairdressers. If you’re in the market for local goods or services, you pay attention when an ad for one of these appears. You view the ad as valuable content.

BIA/Kelsey says television will remain the second-largest local advertising medium, accounting for 60 percent of the total local video advertising market, in 2018. That’s because it’s highly effective—especially in local markets.

Even for companies trying to reach millennials, broadcast and cable TV are the best medium, according to Adweek.

Ad relevance is the key here. Simply put, it’s not the total ad time viewers are exposed to, nor the total number of commercials. The important thing is whether an ad is relevant to an individual viewer.

Instead of trying to limit advertising by reducing total ad time, the industry should continue on its current path of maximizing the value of TV inventory in different ways, such as with ATSC 3.0 and automated TV buying.

Taking Advantage of the Data

We’ve talked before about how ATSC 3.0 will enable new business models and result in more effective ads for local stations. As the industry begins to implement the standard, TV advertising of all kinds will become more competitive with—and increasingly similar to—digital advertising in terms of addressability, interactivity, and measurement.

To get ready, local stations should dive into streaming now. By beginning to collect and analyze first-party data made available via streaming, station groups can gain insights and learn best practices that will help their sales teams convey the power and return on investment (ROI) of TV advertising.

Another way to increase the value of ad time is through automated TV buying. As TV stations accumulate more first-party data and become stronger in their ability to use that data, automated TV buying and programmatic platforms will allow advertisers to further optimize their local TV spends.

Why is Fox telling its advertisers no one wants to see their ads? Instead, let’s remind our advertisers that, with the right content, they’re not just visible but valuable to viewers.

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