In what Fox says will be a model for future on-demand advertising, the network is letting users watch one 60-second ad in front of episodes of “MasterChef Junior” on its Internet platforms — instead of the regular 10-minute ad load.
From Aug. 19 through Sept. 13, episodes of the Gordon Ramsay-hosted cooking show with kid contestants will be available on the Fox Now mobile and online service in an “engagement only” ad campaign sponsored by the California Milk Advisory Board. [UPDATE: A Fox rep said the launch of the one-month campaign has been pushed to Aug. 26 to better bridge the gap before the new season of “MasterChef Junior” premieres Nov. 4.]
It’s essentially a new spin on the “brought-to-you-by” sponsorship. At the beginning of each episode, viewers can opt to watch the one-minute milk pitch followed by the 45-minute episode, uninterrupted by commercial breaks. If they decline, they’ll see the normal commercial load.
“If advertising is going to survive, it’s got to be something consumers accept,” said Joe Marchese, Fox Networks’ president of advanced advertising products. “The interruptive ad model needs to evolve.”
Fox’s move to new forms of digital advertising is all the more critical as TV ratings — and corresponding ad revenue — have been declining.
Of course, TV viewers have always disliked ads. But Internet users, especially younger audiences, hate online-video ads even more: 43% of consumers 18-29 agreed that online-video ads are more annoying than television ads, compared with 24% of those 60-plus, per a survey last year by Strata Marketing. That’s a key part of why Netflix’s ad-free streaming service, for example, has been a raging success.
The “MasterChef Junior” opt-in ad campaign uses technology developed by true[X], a startup founded by Marchese that 21st Century Fox acquired last December for $200 million. Fox worked with ad agency Deutsch on the creative. The campaign is timed for viewers looking to catch up on past seasons ahead of Fox’s “MasterChef Junior” season-four debut on Nov. 4.
Fox has used true[X] previously to let users select one ad per break (as opposed to the full pod), and for several years, Fox-backed Hulu has let users pick which ads they’d prefer to watch. But the “MasterChef Junior” execution is the first time a brand has sponsored full episodes with just one spot.
The goal, Marchese said, is for the ads to be more efficient per dollar spent. He wouldn’t specify rates, but acknowledged that the cost per thousand (CPM) for the engagement-only ads are in the neighborhood of 10 times Fox’s regular Internet-video CPMs.
More important, opt-in ads are far more effective because viewers are required to interact with it. On average, Fox claims, it has seen 83% opt-in and 12% click-through rates for the true[X]-based ads — and Marchese expects results to be even better for the CMAB ads in front of “MasterChef Junior.”
“It’s the difference between someone shouting a message at you as you walk by, versus someone saying, ‘OK, I’m going to choose to watch this,'” he said.
James Murdoch, who’s replaced Rupert as CEO of 21st Century Fox, is bullish on the concept. On the company’s quarterly earnings call last week, he called out true[X] as fueling growth in digital dollars. “We expect and plan to be able to offset the decline we are seeing in domestic network entertainment advertising by better monetization of our digital and nonlinear audience over the next 12 months,” he told investors.
Down the road, Fox plans to sell additional engagement-only sponsorships. And the model could come to television VOD: Marchese said Fox is in talks with several large pay-TV providers to let customers interact with ads on set-top boxes.