August 12th, 2008

The Battle for the Lower Third

Broadcasting & Cable

Viewers who settled in to watch The Incredibles on NBC after their Thanksgiving Day meal last November no doubt expected to see their fair share of commercials. What they probably didn’t expect was a sight somewhat odder than anything to do with the story of an undercover superhero family: a Target shopping cart trawling across the screen during the film.

Such sights are becoming more familiar by the day. The lower third of the viewing screen, once part of the wide-open prairie for programming, is turning into the latest land of opportunity for Madison Avenue. Advertisers more and more are claiming this real estate for themselves in the ongoing fight for viewer attention.

Burned by the advent of ad-zapping digital-video-recorder machines, sponsors seeking new ways to get face time during screen time have ironically taken a page from the TV-network-promotion book. Network marketers have been pushing the envelope with more intrusive ad forms in their own battle against DVRs, and advertisers are aping the practice. While some cable networks are actively using ad bugs as a bargaining chip in deal-making, NBC, for one, is not out selling them as an ad unit, although it will occasionally come up with lower-third ideas, such as the one for Target, to help broaden a buy.

On cable, however, the practice is getting a little out of hand. In one TBS promotion that raised eyebrows recently, the network literally stopped an episode of Family Guy in progress to insert a talking pop-up of comedian Bill Engvall, who appeared to briefly promote his show on the channel. And last month, Discovery Channel promoted its popular “Shark Week” by superimposing a theme-week ad on a shot of sky during an unrelated documentary.

The question for all concerned—advertisers, networks and viewers—is quickly becoming: How much is too much? And with screen sizes getting either smaller or clearer, the invasions of territory will seem more magnified.

“In the days when the audience is shrinking, you have to grow your business,” said Jak Severson, managing partner with Los Angeles-based branded-entertainment venture Madison Road Entertainment. Madison Road is conducting extensive research into the value and efficacy of lower-third ads. Some people call them bugs, snipes, in-content messaging or, less affectionately, obnoxicons. Severson has a more practical name for them.

“This is the last frontier,” he said.

High Potential for Lower Third
Severson likened the potential for the emerging lower-third ad form to product placement. According to PQ Media, the product-placement business grew 40% between 2002-07 to $2.9 billion. The branded-entertainment business—which includes event sponsorship—is predicted to be worth $25.4 billion in 2008, a figure that has more than doubled in the past five years.

Marketers’ logos are already commonplace on sports networks such as ESPN. On its National Association for Stock Car Auto Racing Sprint Cup coverage, for example, sponsored scores and updates were displayed on the bottom of the screen during races such as July’s Allstate 400 at the Brickyard.

But they’re hardly reserved for sports. TBS, TNT and sister network truTV have also worked such deals. On TBS, a graphic stating, “You’re watching My Boys” was recently accompanied by an Alltel sponsor logo. And Coca-Cola’s logo is prominently displayed on-screen during Fox’s American Idol.

“We do a ton of lower-thirds,” a Coca-Cola spokeswoman said, “not just our logo with the box scores, but some interactivity to it.”

As networks increase the annual cost of ad packages, marketers seeking the so-called value-add are increasingly turning to ad bugs as the answer. As such, it’s hard to put a price tag on lower-third ads, which now fly, ironically enough, under the radar, financially speaking.

Movie studios have been among the most aggressive users of the overlays, given their familial ties to the networks. NBC is primed to roll out lower-third graphics during the 2008 Beijing Olympic Games for Universal Pictures sequel The Mummy: Tomb of the Dragon Emperor. And 20th Century Fox’s February release, Jumper, linked with truTV as part of a “Jump Into the Action” theme night, which made use of the film’s animated logo.

Ad bugs are topic A on Madison Avenue, with one unnamed media director wandering into his boss’ office a few weeks ago to ask, “Shouldn’t we be doing this for our clients?” Severson expects the lower-third ad business to metastasize within the next 24 months, adding that viewers should brace themselves for an onslaught of corporate logos and advertising icons.

But while the potential is vast for such ads, chances are that primetime lower-third placement won’t make the big leap until networks truly go the way of sports by monetizing the deals. It’s something networks have until now resisted.

In an indication of how quickly the business might progress, NBC Universal TV group chief marketing officer John Miller appeared to signal NBC’s willingness to talk about such overlays more extensively at a Promax event in June. Miller, whose words at Promax set the industry buzzing, called marketer overlays for clients—like the Target shopping cart—very rare; as yet, they are not being sold. “We have discussed it internally but so far we have resisted,” he said. Discussions continue, however. “There’s a dancing act going on internally with advertising trying to figure out an appropriate way not to hurt the viewing experience.

“The shopping cart had the logo, but it didn’t say ‘Target,’ or ‘shop tomorrow,’” Miller added. “They wanted it to be subtle, and that’s why we went with it, because it didn’t seem to distract.” Miller was careful to emphasize that the network remains mindful of not upsetting either the creative community or viewers.

Mike Benson, executive vice president of marketing for ABC Entertainment, is against any such lower-third strip mall of ads. “We don’t do them,” he said. “We are trying to remove clutter to make sure viewers have the best possible experience. If we start placing ads, we will lose the value of promotions as a navigation tool.”

Still, advertisers may well have the opportunity to play pop-up a la Bill Engvall at Turner. When asked if we might see advertisers stopping the action during program time, Turner Entertainment executive VP of ad sales Linda Yaccarino responded, “When we hit on the right program and marry it with the right ad, it could happen, but it’s not on the docket right now.”

Producers and writers probably won’t be in favor of such deals. The Writers Guild of America already expressed its negative opinion of brand integration to officials in Washington, D.C.

How viewers react will be key to the development of in-program ad bugs. And that has led to some stealth experimentation. At sites such as Hulu, some ad messaging is incorporated on the bottom of the screen during TV episodes. Bank of America signage, for instance, appears while a Family Guy episode is playing online.

Miller’s own research suggested that 20% of viewers see promos for network programming as a service, while the majority of those polled said they had no opinion one way or another. Those figures might change if viewers were asked about advertisers.

Gary Carr, senior VP and director of broadcast services at New York boutique media agency TargetCast tcm, admitted that he has mixed feelings about ad bugs. “I understand the networks are trying to monetize content and advertisers want their message to be seen, but no one ever seems to think about the viewer.” Carr believes that while it’s always in advertisers’ collective interest to avoid getting zapped during breaks, viewers are already fatigued by incessant network promos.

Carr was not alone in his skepticism. Herbert Jack Rotfeld, professor of marketing at Auburn University and editor of the Journal of Consumer Affairs, said networks are all but encouraging viewers to leave the screen because of endless ad breaks, repetitive spots and program promos and graphics. “It detracts from the program; they’re covering part of the screen,” he added. “I think even if people are watching a national weather warning, they don’t like losing part of their screen to things that have nothing to do with the show.”

Rotfeld, who’s also author of Adventures in Misplaced Marketing, added, “Creating more clutter is not more effective advertising.”

Lower-third graphics really took off in the early 1980s at Viacom. Lee Hunt, a veteran promotions executive, claimed that VH1 was among the first to place a permanent on-screen identifier in 1987. The channel’s logo was tabbed because VH1 feared it might be losing viewers who were filling in Nielsen Media Research diaries and presuming that they were watching MTV.

Now, 20 years hence, on-screen logos are ubiquitous. And in the post-Sept. 11 world, news crawls became a permanent fixture of main cable news outlets.

The space above the crawl has also been appropriated. CNN carries stock quotes, time and boxes reading both “live” and “just-in,” together with a separate box summarizing the anchor’s current story. And CNN’s own logo is outlined by a beaming silver flash.

Such clutter led to a July 2005 Kansas State University study titled, “How Attention Partitions Itself During Simultaneous Message Presentations.” The paper’s authors—Lori Bergen, Tom Grimes and Deborah Potter—conducted tests to see how much information viewers could take in at once.

The short answer was: not as much as networks probably hoped. “It appears that on average, 10% of information delivered in the visually complex condition did not get through to long-term memory due to visual complexity,” the paper said. Research indicated that this was less of a burden during entertainment programming.

The authors argued against too many graphics: “There is no explanation ... that justifies using a presentational format for news that makes it more difficult for viewers than it already is. The data ... strongly suggest that the format harms story fact comprehension. Thus, this cacophonous format appears to be one that can—and should—be better managed by television news producers.”

Looking for the Boundary Line
Hunt said there has been some pushback against ad bugs within the industry. He cited one egregious example of a promotion for a pizza brand suggesting weekend picnic ideas that popped up during the denouement of a repeat episode of Law & Order on cable.

“Cognitive theory shows that people can’t take in two messages; they go back and forth,” said Hunt, who advises clients on the best place to put promos and explained that viewers need a few seconds when they come out of a break to get back into the action. Promotions placed soon after the break work best. “You are not taking away from the emotional engagement. Some networks put them in the middle of the action, some at the end of the segment. The problem is, we don’t know how to measure pushback. Is it when ratings go down? We don’t know where the boundary is until we cross it.”

Similarly, advertisers are having difficulty figuring out what the presence of a logo or character might be worth. Donna Wolfe, chief negotiation officer at Universal McCann, has negotiated lower-third ads for clients she declines to name. Wolfe explained, “You have to factor in duration; is it an icon, is it a link to information, how impactful is it, how prominent? What show is it on? The disadvantage is that you are in competition with the content of the program.”

But the faster the value is weighed by new measurement tools, the faster the take-up will be. Severson thinks there will be a price tag put on ad bugs within the next two years. “I’d be astonished if every network isn’t looking at it,” he added. “The economics support it.”

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