I’ll venture a guess that this is the only place that shows what Saturday Night Live and Google advertising suddenly have in common and, more importantly, how they’re demonstrating a way for digital advertisers to increase revenues in the face of wide spread ad blocking.
Broadly speaking, publishers can increase prices of their ad inventory by reducing supply or by increasing customer engagement. Last week, SNL and Google announced plans to do both.
Last week, SNL announced it would cut advertising inventory on its show by 30 percent and would start offering advertisers limited opportunities for product integration in the show. Earlier this year, Google did away with right-hand side paid search ads. Then, last week it offered to let brands publish directly to search results.
Here’s an example of how Jimmy Kimmel and ABC are using the feature. Search “Jimmy Kimmel,” as shown on the left below, and you’ll see a carousel of show clips, which I’ve circled in red. Clicking on the icon to the left of “Jimmy Kimmel Live” takes you to the page on the right.
Fewer ads executed in a way that should draw in more people. The result should be a way for NBC (the network that airs SNL) and Google to increase prices if not revenues.
Digital publishers, especially those now grappling with ad blocking, should take note.
Ad blockers have arisen because many publishers have saddled their web pages with so many ads that their content takes too long to load, gobbles up too much mobile data, and abuses the reader with too many unwanted distractions. (For a fascinating piece that dissects what’s happening behind the scenes on many media web pages, check out this story from the reliably insightful Monday Note.)
We’ve reached this sorry state of affairs because media publishers face what seems like limitless competition for digital attention, which has the impact of creating an over-abundance of inventory for advertisers. That, in turn, drives down the prices of ad inventory all over the digital landscape. Making matters worse for advertisers, their legacy properties – especially print media – are losing their audiences in droves.
All of this places enormous pressure on digital media properties to monetize. The easiest solution: load more ads on every page and in every app. The horrible user experience this has spawned gave rise to the ad blocking industry and forecasts anticipating over $20 billion in ad revenue annually would be stripped away from publishers. These panicky headlines have forced the media industry to rethink its approach to engaging users and advertisers alike.
As time has elapsed, though, the doomsday predictions have simmered down. Some reports, such as this one about Wired magazine, suggest that publishers are figuring out how to work around ad blocking in a customer-friendly way. Though SNL is a TV property, that ad business also is under threat. In this way, the inventory-cutting, engagement-boosting approach used by both Google and SNL are instructive.
Saturday Night Live and Google aren’t the first to manipulate supply in an effort to drive up prices. OPEC and DeBeers have been doing that for years. Not many have tried it in advertising, though, which makes this so interesting and worth watching in the months ahead.