Sponsored content on the rise as ads are cut from TV

TV advertisers are turning to sponsored content to reach consumers, as broadcasters try to reduce ad time and restrictions are loosened. Iconic US comedy Saturday Night Live is set to air 30% fewer commercials - a reduction of two ads per show - and network NBC is offering marketers a “limited opportunity” to “create original branded content”. Other US broadcasters have pledged to cut back advertising airtime, while shows including The Voice and Late Night with Seth Meyers have already incorporated sponsored content into their shows. In 2012, PQ Media reported an estimated $8.25bn in product placement spending, with expectations of double that amount to be spent in 2016.



It was only a few years ago that Netflix created a sort of ad-free TV nirvana. The spoils of its efforts — millions upon millions of subscribers — spawned ad-free streaming rivals Amazon and even network-owned Hulu (for an additional fee), cultivating a flourishing list of ad-less entertainment destinations that are now putting traditional pay TV outlets in a real pickle.

However, like cockroaches, rats, and Keith Richards, ads cannot be killed by conventional methods. As much a part of our consumerist economy as the products they pitch, ads never truly die — they adapt. And a new move, ostensibly designed to cut ad-time from beloved network institution Saturday Night Live, has possibly unveiled the next evolution in TV commercials: sponsored content.

Dollars for pods

In late April, SNL announced plans to air 30 percent fewer commercial breaks in its upcoming 42nd season, dropping two commercials per episode. “As the decades have gone by, commercial time has grown,” said SNL producer, creator, and all around comedy guru Lorne Michaels. “This will give time back to the show and make it easier to watch the show live.” On the surface, it sounds like a win for both sides: Viewers get more laughs for their TV time, and NBC will presumably beef up its live viewing stats, which unsurprisingly in the streaming age, have been on a steady decline in recent years.

Politicians figured out long ago that poking fun at yourself on SNL is a great way to curry favor.

However, digging into the fine print reveals a somewhat more insidious plan. NBC isn’t selling less ad time. Instead it’s offering ad firms a “limited opportunity to partner with SNL to create original branded content,” according to AdWeek. These sponsored segments, or “native pods,” as NBCUniversal chairman-advertising sales and client partnerships Linda Yaccarino calls them (traditional TV commercials are commonly referred to as “pods”), will happen only six times a year, so it appears they’ll be very pricey for ad companies and not all that intrusive to SNL’s format. That said, this is an unprecedented move for the show.

While NBC has yet to reveal whether or not Saturday Night Live staff will take part in the sponsored segments, SNL is uniquely equipped to take advantage of such an opportunity. The show has been making fake ads since its inception with sketches about phony products like the classic “bass-o-matic,” later transitioning to tongue-in-cheek jabs at real ads for real products.

Totino's Super Bowl Commercial - Saturday Night Live

Just what these sponsored segments will look like is unclear, but ad companies may have learned from politicians, who figured out long ago that poking fun at yourself on SNL is a great way to curry favor with the masses. It’s conceivable the new segments could clown on the products they promote, making the ads nearly indistinguishable from the show’s organic commercial parodies. For those outside the ad world’s brainstorming bunkers, that’s an unsettling idea.

The hidden ads of the future

We don’t yet know what SNL’s new format will look like — a troubling enough thought for fans of the iconic comedy show, which has remained remarkably unaltered in its 40-plus years. But the precedent foreshadows an even more worrisome, broader trend ahead in the murky future of traditional TV.

It won’t be long until sponsored content is revealed from a wide swath of TV networks.

As Deadline reports, content creators like Viacom and Turner have made their own plans to cut back commercial airtime, with Turner’s TruTV and TNT committed to eliminate as much as 50 percent of their ad airtime. They may plan to reduce commercials, but they have not announced any plans to reduce their revenue by 50 percent. Money is king, and it has to come from somewhere. You can bet your (insert product placement here – Big Mac?), that ads are going to get crafty. It may not be long until plans for sponsored content are revealed from a wide swath of TV networks.

In fact, while SNL’s new plans have gotten the most attention, the sponsored content invasion has already begun. As Ad Age reported, several NBC shows, including The Voice, Blindspot, and Late Night with Seth Meyers, have already aired sponsored content this season, from bonus segments and interviews to full comedy sketches, all bought and paid for by American Express.

The tradeoff

The thought of swapping lengthy ad breaks for a few sponsored segments may not be all that unappealing to some frustrated viewers. As competition has increased and ratings have dropped, networks have continually increased the amount of ads in their programming schedules — so much so that some networks have adopted a practice called time warping, which actually speeds up older TV shows like Seinfeld to fit in more commercial breaks. The practice has become so common, in fact, it’s spawned an entire industry. Meanwhile, new shows are simply compressed to make time for more ads. If executed well, sponsored content might be a welcome alternative for some to the ad extravaganza that linear TV has become.

Incorporating products into TV shows and movies is also far from a modern concept. Late night talk show hosts, from Jay Leno to Jimmy Kimmel have happily incorporated product placements for ad companies into their shows for years. And though the skyrocketing sales of Hershey’s Reese’s Pieces made Spielberg’s 1982 classic ET the poster child for product placement in film, it’s believed the practice goes all the way back to the 1920s.

Product Placement: Reese's Pieces on E.T.

Product placement is already bigger than ever. PQ Media reported an estimated $8.25 billion in product placement spending in 2012, up from about $6 billion in 2009, and the company expects 2016 to nearly double that figure as companies look for more effective ways to engage with consumers. A mix of loosening regulations and increased desperation by ad companies looking to chase consumers out of their streaming holes has led to a cornucopia of products sneaking into our TV shows and movies.

The rub is, when it’s done right, most viewers don’t even notice.

The devil you know

As prominent as subliminal advertising has become, an onslaught of sponsored content on TV could escalate it to an entirely new level. Consciously suffering through commercial breaks ad nauseum is one thing, but it’s another thing entirely to watch the line between what we want to watch and what advertisers want us to watch blur into oblivion.

When our commercials no longer look like commercials, how will we know who’s pulling the strings?

In a world where corporations are people and lobbyists saunter the halls of the White House like cabinet members, the idea of commercials sinking beneath the surface of native programming to become completely unidentifiable is disconcerting. At only six segments a year, SNL is starting small, but subliminal advertising is a slippery slope. When our commercials no longer look like commercials, how will we know who or what is pulling the strings?

If sponsored content sounds like a familiar concern, it’s because online news and media sites have also experimented with it for several years. While some sites do a good job of indicating which posts are sponsored, others take a much more dubious approach. Sometimes you don’t know you’re reading an article paid for by someone with skin in the game. That can feel disingenuous, and it could wind up being the same with television soon.

It’s far too early to tell exactly how the approaching era of sponsored content will change the world of entertainment. But what we do know is, just like the products they promote, ads aren’t going anywhere. And our more recent endeavors to thwart the ad machine, from ad blockers to streaming services to good ol’ DVR, puts at least part of the blame for this new innovation on us, as consumers.

To borrow a phrase from a great free thinker named Obi-Wan Kenobi, in our attempts to strike ads down, we may have made them more powerful than we could have possibly imagined.

Editors' Recommendations