Streaming and on-demand media with skippable, short ads mean that traditional broadcasters are searching for new ways to add value to their offerings. Turner, Viacom, NBCUniversal and Fox have all made announcements regarding their reduction in ad load.

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“Whether it’s brands shifting from print to digital, or from direct to addressable, or vice versa, the industry is always shifting, often in ways that are difficult to forecast. Among the madness, however, television advertising has remained a consistent go-to for brands near the top of the economic food chain.”

~ A Year in Television: MediaRadar’s Overview of TV Advertising in 2018 and 2019

Words are one thing, but are TV commercials really getting shorter as promised?

Our data says yes.

MediaRadar Insight: Yes, TV Commercials Really Are Getting Shorter

MediaRadar’s recent trend report on TV advertising in 2018 and 2019 focused on comparing ad spend and trends from Q2 of 2018 through Q1 of 2019.

Outside of identifying TV’s top advertisers and new advertisers, the report identified one of the biggest takeaways as TV ads continuing to get shorter.

When looking at Q1 of 2019 versus Q1 of 2018, MediaRadar found that the average length of TV ads continues to go down, dropping 8 percent year-over-year. The trend is consistent with a few different mediums (such as YouTube).

In that same timespan, traditional broadcasting saw an 18 percent increase in the number of TV ads with a run-time of 15 seconds or less. These ads now make up just over 55 percent of all television ads, and the 15-second ad still remains by far the most popular ad length.

Furthermore, the 6-second ad, originally made famous by platforms like Snapchat and YouTube, saw a 36 percent YoY increase, though due to its young age still makes up less than 1 percent of all TV ads.

“To maintain revenue while trimming ads, networks must raise prices on the remaining spots,” writes Jeanine Poggi at AdAge. “Less commercial clutter seems like it should make ads more effective (and reduce the chance that viewers change the channel during breaks), but how much that’s worth is in debate.”

With the effectiveness of shorter ads still up for debate, what’s driving this shift?

Behind the Trend: Personal Primetime

The convergence of TV’s upfronts week and NewFronts (for digital media) makes the move toward shorter and fewer ads clear. Traditional broadcasting now has to compete with a format that puts short, skippable and personalized ads front and center.

If you weren’t convinced before, YouTube’s new Personal Primetime crystalizes the connection. “We can deliver personalized media in a way we never could before,” YouTube CEO Susan Wojcicki said at NewFronts.

Stephen Battaglio at The Los Angeles Times writes that the shorter ad formats in broadcast TV are networks’ way of avoiding viewers to commercial free, over-the-top television.

“The broadcast and cable networks that took in $19.7 billion in revenue for advanced sales of commercial time last year don’t want to see that happen,” writes Battaglio. “Many of the major entertainment cable networks have experienced double-digit declines as video content gets consumed to a greater degree on digital platforms… Airing fewer commercials could help reverse that trend.”

Is it a strategic move or a natural progression? Either way, broadcasters going in this direction will lead to fewer ads and shorter ads.

“[Digital] is just a better environment with a lighter ad load. We had to be honest with ourselves and say, ‘Knowing that, how do we figure out a way to make TV more like digital?’ We’re talking about something that has never been done before. You’ll be able to see one or two spots in the first 24 minutes of ‘This is Us,’ the No. 1 drama on TV.”

~ Mark Marshall, executive vice president for entertainment advertising sales, NBCUniversal

Networks are also offering less ads on the streaming platforms associated with their content — one episode of NBC’s “This is Us” has just seven minutes of ads, for example.

Whether or not the new ad format for linear TV works remains to be seen. But the shorter ads do seem to be driven by consumer demand, which points to a win/win scenario — as long as broadcasters can keep ad sales revenue up.

“The US economy has been doing well, and shoppers have kept up their retail demand,” writes Jim Edwards for Business Insider. “But the same can’t be said for automobiles.” As the budgets of car manufacturers get slashed, TV advertising in the industry has gone with them.

CNBC went into detail, writing that car sales are expected to drop in 2019 “as rising interest rates weigh on sales and translate into higher monthly car payments for consumers.

Recent stock market turmoil and uncertainty over the health of the U.S. economy could also add to consumer caution in the short term.” Outside the US, the EuroZone recently trimmed economic growth forecasts, specifically citing weakness in the auto industry as one of the two major contributing factors.

The Economist attributes falling car sales to the tariff war, a rapidly changing industry (with electric cars and ride-sharing apps on the rise) and a decrease in consumer interest.

Regardless of the reason, car sales look likely to fall around the world, and major car manufacturers are looking to cut costs across the board. Ford is in the middle of a global effort to cut costs by $14 billion a year, and Jaguar is working on its own plan to cut $3.2 billion in annual costs.

It’s not shocking to see TV advertising, with its high price tag, be part of these cutbacks. Data from MediaRadar’s television industry tracking and our newest Annual TV Trend Report shows the extent to which auto ad spend has changed on television .

How Lowered Auto Ad Spend is Affecting Television — For Now

The auto industry has long been a major buyer of national TV ad space. In the past year, however, automakers have been consistently pulling dollars from TV advertising.

The chart below from MediaRadar data depicts how every quarter (except for Q2 2017) has seen a negative Year-over-Year change in automotive ad spend on TV.

Spending by auto companies on national TV has seen a YoY decline in eight of the nine last quarters. The largest negative shift was in the first quarter of this year — a 21 percent decline from the Q1 2018.

According to MediaRadar data, the auto industry’s cuts to TV ad spend are most apparent in the advertising stats for recent Super Bowls. The auto industry was the top spending category for 2018 Super Bowl ads, but a near $50 million decrease among the category for the 2019 Super Bowl lowered its ranking to fourth.

A Huge Silver Lining for TV: Decreasing Auto Ad Spend Really Isn’t Personal

Here’s the upshot for TV ad sellers: automotive’s dramatic decrease in TV ad spend isn’t the result of shifting those dollars to other mediums.

MediaRadar research shows that car companies are not allocating their collective ad budgets from TV into newer formats, like YouTube or Snapchat. Instead, the above outlined economic trends within the auto industry are causing lowered ad investment across the board.

Look at it this way: in 2017, TV accounted for 85 percent of ad spend in the auto industry. In 2018, TV ad spend in the industry stood at 84 percent of total advertising efforts. Even though car makers are spending less on TV advertising, the medium isn’t losing its huge percent dominance to anyone else.

It seems to be a matter of TV ad sellers having to wait out the drop in ad spend; the auto industry always ebbs and flows. In the meantime, the auto industry still remains one of the largest buyers of TV ads despite the cutbacks. In the last year (Q2 2018 to Q1 2019), auto was the fifth largest category buying national TV advertising, collectively spending over $6 billion.

A pick up in TV ad spend from Auto will depend on the auto industry finding a way to make revenue flow more freely, appealing to a new generation of car buyers.

It’s important to stay on top of trends in TV advertising — who is advertising with whom? Why, and how? Understanding the current state of the television landscape is necessary to find out which upcoming opportunities shouldn’t be missed, how best to prepare, and how to maintain a competitive and desirable edge.

MediaRadar will release its annual TV Trend Report later this month. Ahead of the full report, we put together the most critical insight for publishers and media companies — including the biggest TV advertisers with RFPs coming up in the next few months.

Top TV Advertisers With Upcoming RFPs

The most important part of the upcoming report will be an overview of the top TV advertisers — and how they are spending their ad dollars. The top TV advertisers with the largest ad spend that have upcoming RFPs between now and July include:

• Procter & Gamble: 12 RFPs predicted in the next 3 months.
• Berkshire Hathaway: 4 RFPs predicted in next 3 months.
• Pfizer: 6 RFPs predicted in next 3 months.

All three of these companies spent over $1 billion each on TV advertising in 2018.

Insight From MediaRadar’s TV Trend Report

In the past year, there have been a few noteworthy changes in the product categories investing in TV advertising. Tobacco vaporizer and pet-related companies increased their TV ad spend the most, whereas travel and non-alcoholic beverage companies decreased their investments more than any other category.

Over 2,000 new advertisers entered the TV ad market this year — apparel companies highest among them. Apparel TV advertising hit an all-time high, making up 13% of all dollars spent on TV advertising throughout the past 12 months.

In the last 12 months, the top five product categories for TV advertisers included:

1. Retail: $8.7 billion
2. Finance & Real Estate: $7.9 billion
3. Tech: $7.4 billion
4. Pharma: $6.6 billion
5. Auto: $6 billion

Among each of those product categories are household names like Target, Geico, T-Mobile, Pfizer and Toyota.

The full report, set to be released later this month, readers can expect further insight into major events of Q1 2019, shifting TV ad length, how direct-to-consumer brands are entering the TV advertising market, and the impact of the latest round of mergers and acquisitions on the national TV landscape.