An age-old TV ad format is seeing a resurgence, but it won't help solve TV's problems in the long term

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Live ads — which were once TV mainstays — are seeing a resurgence, with MassMutual and Snickers among companies dabbling in them around big, tentpole events.
They allow brands to break through the clutter and appear authentic, and they present networks with another viable ad unit to make money from.
But live ads won't reverse TV's decline, experts say.

If you tuned in to CNN's coverage of its annual New Year's Eve telecast on Sunday night, you would have seen thousands of people excitedly gathered in New York City to watch the iconic Times Square ball drop. But that's not all.

You would have also caught the network airing its first live TV commercial. The 2 1/2-minute spot, for the insurance company MassMutual, showcased the National Children's Chorus celebrating a group of people who looked out for one another in 2017, delivering the performance straight from the venue to your TV screens.

The feat may be a first for CNN and MassMutual, but it represents a budding trend in TV advertising. Both Snickers and Hyundai, for example, ran live ads during the Super Bowl last year. And makers of the film "The Greatest Showman" ran a live ad when Fox aired a live musical version of "A Christmas Story" this holiday season.

"Live ads allow brands to tap into culture and create context, not just buy it," said Laura Correnti, the executive vice president and managing director of the ad agency Giant Spoon, which bought the ad on behalf of MassMutual. "It allows them to break through the clutter."

Live ads allow brands to stand out

Live ads are not new. They were once TV mainstays, particularly during the early days of NBC programs like "The Tonight Show," where companies like Polaroid offered viewers dramatic product demonstrations like photos developing instantly in real time.

But they have been seeing a quiet resurgence over the past few years, particularly as marketers, media companies, and TV networks struggle to connect with increasingly ad-averse consumers.

For brands, unlike a traditional 30-second TV ad, live commercials can be tailored to directly connect with the live TV events during which they air, such as Super Bowl or the Emmy's. And they can come across as raw or authentic.

"A live ad is not overproduced and edited like other spots — it has an element of spontaneity and risk," said Jennifer Halloran, the head of brand, advertising, and community responsibility at MassMutual. "Viewers know that the brands cannot rescript and edit to get the perfect message, so there is an embedded assumption that it has to be a genuine message."

There's evidence that such live ads stand out. When Garmin partnered with "The Tonight Show" for a live ad back in 2008, for instance, the effort boosted its brand recall 76% more than other commercials did, the company said.

And Fox's 2 1/2-minute live commercial for the film "The Greatest Showman" not only saw a 100% audience retention rate but also had a positive sentiment as high as 80% among its viewers, according to the network.

"Our two primary goals in advertising are to create great value for our partners and to improve the viewer experience," said Suzanne Sullivan, the executive vice president of entertainment sales at Fox Networks Group. "With live ads, we've seen proof points for both."

And live ads present a viable new format for TV networks fighting to hold on to ad budgets

For TV networks, live ads are a beacon of hope. People are ditching cable at a much more rapid clip than previously thought, TV ratings are on the decline, and TV ad spending is down overall.

"The traditional TV ad model needs diversifying," Correnti of Giant Spoon said. "It is no secret that consumer attention is waning and viewers are migrating to other platforms."

In such an environment, live ads provide media companies like Turner and Fox the ability to tout big-ticket ad options that only TV can deliver. These ads can bring in $2 million to $5 million in revenue each, according to sources. It is no wonder, then, that networks have been bullish on the format.

Live ads have been a priority for Fox for the past few years, said Sullivan, while CNN's parent company Turner has created an ad unit called Native Plus, which allows marketers to replace an entire commercial pod with longer-form branded content including live ads.

"We saw the potential to leverage these cultural moments, capitalize on them as they were happening, and package them as ads," said Michal Shapira, the senior vice president of news content partnerships at Turner's ad-strategy division, Turner Ignite. "We are putting a stake in the ground and feel like this is one of the top products that we offer in the marketplace."

Live ads are not limited to TV. The resurgence can in part be attributed to the rise of livestreaming on social media, from the once hot Meerkat and Periscope to the more mainstream Facebook and Instagram more recently. And brands looking to capitalize on the trend can venture in these directions — at a fraction of the price.

But the TV giants believe that they have an edge over digital platforms when it comes to execution. Producing a live ad is a fairly complicated undertaking, Shapira said.

"Dozens and dozens of people are involved in pulling something like this off," she said. "But we believe we provide the highest quality and have all the tools and resources that are required from a capability standpoint."

Still, live ads are not going to be TV's silver bullet. These events are sporadic and therefore not consistent, said Greg Hahn, the chief creative officer at the ad agency BBDO New York. Plus, users will always have to leave TV to actually go take an action, said Chris Beresford-Hill, the chief creative officer of the agency TBWA New York.

"Live ads are not going to usher in the sustained golden age of TV," Beresford-Hill said.

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