Can the Web Combat the TiVo Effect?

As personal technology goes, digital video recorders (DVRs) are more than just a replacement for tape-based VCRs: They’re a boon to TV watchers and the enemy of the traditional 30-second television advertising spot, for decades the single most powerful and lucrative form of brand advertising.

Devices such as TiVo have long been seen as a disruptive force in the TV advertising space, offering consumers the chance to blast past advertising with a simple click of a button.

Thinking Out of the Box

The devices are unlikely to represent any kind of death knell for TV spots — they continue to be a powerful way to deliver a message — but advertisers seeking to combat the so-called TiVo effect are increasingly borrowing techniques from Web advertising.

From mini-shows to zany commercials that create their own audiences and their own buzz to interactive commercials that invite users to offer feedback, the techniques being used to counter DVR technology often got their start online.

The TiVo effect is just one symptom of a larger trend toward a more fractured media landscape, one in which users’ attention will be pulled in a thousand directions at once, John Houghton, president of Mobilecast Media told the E-Commerce Times.

“To see what tomorrow’s consumer will be like, we have only to look at our young,” he said. “Teenagers are notorious for not reading magazines or newspapers, instead preferring to get their news online or from blogs. They watch less TV, and the TV that is consumed is consumed on their own time schedule without advertising” because of DVRs.

Houghton believes that adding mobile media into the mix only accelerates a trend toward more customized media broadcasts, with podcasts and video-casts taking the place of many traditional shows.

Placing Ads

Advertisers are also trying to find ways to work within the context of DVRs.

TiVo sees an opportunity to provide advertisers with new ways to reach audiences and they are often pitched in the same way that online advertising is positioned.

“Traditionally, the viewer of TV commercials had no choice but to watch or get up and leave the room or change channels,” said Bruce Kasanoff, president of interactive marketing firm Now Possible. “Online, users can choose not to click ads, but often they do and smart advertisers will look at why that is and steal the things that work.”

As video advertising on the Web has proliferated, the best marketers have found what works and what doesn’t, Kasanoff added. Traditional 30-second spots that drive home a strong message fall short, while short film-like clips that entertain get strong traction and often draw their own audiences, he explained.

“Good online ads interact with users and let users interact back with them,” Kasanoff noted.

Big Money

With US$70 billion a year invested in television advertising, the stakes are enormously high. Forrester Research has predicted that marketing dollars spent on TV ads will start to be diverted in significant numbers to more interactive channels as soon as this year.

While networks and advertisers have decried TiVo and related products, TiVo CEO Tom Rogers recently said he sees the devices becoming an ad platform of their own, a tool for “dealing with, and allowing for the growth of, the advertising business.”

Some advertisers have jumped on board, trying to use TiVo as a tool to reach audiences that are in turn using them to jump over their ads. General Electric, for instance, had one of its 30-second “Eco-Imagination” spots downloaded onto users’ TiVo boxes and then ran a promotion in which users were asked to identify hidden parts of the ad.

TiVo believes it can entice users to voluntarily watch more ads as well, with efforts under way to build an affinity program with users who agree to watch ads, accumulating points redeemable for discounts or products.

Still Growing

Fifty percent of U.S. homes will have DVRs by 2010, according to Forrester Research analyst Josh Bernoff. He added that the devices will soon enter a “hypergrowth” stage and begin to spread to second and third television sets in many homes, dramatically expanding the impact of the commercial-skipping technology.

The good news for advertisers and networks may be that TiVo and related products could become a tool for broader distribution of online media, such as podcasts and viral videos, Bernoff said. In addition, the devices offer a bridge from the PC to the television that doesn’t currently exist except in the most networked of homes.

Meanwhile, TV networks continue to try new things to reach audiences, especially younger viewers, with novel approaches. The CW network — the result of the merger of UPN and WB — said recently it will include 30-second “mini-shows” instead of some ads when its fall season debuts in September.

The spots would be serial in nature, leaving viewers in suspense until the next episode, and lean either on product placement or an advertiser’s logo to deliver the commercial part of the message.

In announcing the new approach, CW President Dawn Ostroff acknowledged both the TiVo effect and the overall changing nature of the TV audience. “Our audience has grown up with television and new media. We are giving them new ways to get involved,” Ostroff said. “We heard from the advertising community that we needed to reinvent the wheel.”

This story was originally published on July 20, 2006, and is brought to you today as part of our Best of ECT News series.

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