Post by dkennedy on May 17, 2006 5:54:30 GMT -5
DVRs sending advertisers to desperate measures
May 17, 2006
By Keith Reed, The Boston Globe
Three years ago, Tiffany Hogan ditched her VCR for TiVo, and watching TV has never been the same.
"I call it my boyfriend because it's always got something waiting for me when I come home," said Hogan, 31, who bought a second TiVo system for her bedroom last year.
She now watches NBC drama Law & Order, which airs Wednesdays at 10 p.m., on Thursday mornings when she's not as tired. Even when she's awake to watch a show in its scheduled time slot, she waits until about 20 minutes after the show starts so she can fast forward through commercials.
Ad-skipping and the so-called time-shifting of TV - viewing on your own time instead of the network schedule - are ushering in an upheaval in television and advertising. Both industries are grappling with how to get people to watch commercials when they don't have to, how to measure audiences when they're watching at different times, and how to capitalize on monitoring viewer habits.
Digital video recorders such as TiVo allow you to record TV shows to a hard drive without the hassle of dealing with videotape and setting the VCR. By 2010, about 50 percent of US households will have a digital video recorder, up from 12 percent today, according to research firm Strategy Analytics.
It's a terrifying statistic for advertisers and networks because "the thing that scares us most is that they say, 'When we get TiVo, we're going to skip commercials,'" said Kristi Argyilan, the executive vice president of channel insight at Arnold, a Boston ad agency.
The new TV-watching behavior spells as much trouble for advertising rates. Networks still schedule top shows for weekday evenings, but prime time could become passe because networks may no longer be able to measure viewership by tracking how many people are watching a show at a given time.
"They're disrupting the appointment viewing model," Jim Penhune, the director of broadband media and communication research with Strategy Analytics Inc., said of DVRs. "That's how the advertising is sold, and that's how television is supported."
TiVo Inc. created the digital video recorder in 1997, and the device has become so prevalent that TiVo is less a brand than a verb for recording TV shows. But the technology is taking off, thanks to cable and satellite competitors such as Comcast Corp., which offers a DVR option for a $9.95 a month. By comparison, TiVo charges a one-time box fee of up to $80, plus a monthly service fee of $16.95 to $19.95.
DVRs are forcing advertisers to be more creative. Chicken chain KFC ran a commercial in March that required viewers to record it, watch it in slow motion, find a hidden message (the word "buffalo"), and enter it on the KFC Web site to get a free Buffalo Snacker sandwich.
ABC refused to air the ad because it thought that the tactic constituted a subliminal message, but a KFC spokeswoman deemed it successful nonetheless: KFC.com had a 40 percent increase in traffic during the commercial's run, and more than 300 million of the sandwiches have been sold to date.
Arnold, the Boston ad agency, shot 10 30-second commercials for the Truth antismoking nonprofit group that became a five-minute sitcom called Fair Enough when recorded and watched together.
"Creative itself has to be far more entertaining first and advertising second," said Edward Boches, the chief creative officer Boston ad firm Mullen.
Some marketers, though, are increasing the number of product placements - paid mentions or on-screen shots of a product during a show.
Fox's American Idol talent show, for instance, features shots of Coca-Cola cups, and fans are encouraged by host Ryan Seacrest to vote using Cingular Wireless phones. During its two weekly broadcasts the week of May 1 through May 7, American Idol had 129 occurrences of product placement, according to data from Nielsen Media Research.
DVR technology lets consumers record TV shows to a hard drive. But the box is also connected to TiVo or your cable company through a phone or cable line, which allows them to monitor what you're watching and when, except when using CableCard 1.0 but this will soon be fix with the introduction of CableCard 2.0.
TiVo can track every click of a user's remote control and collects second-by-second data on what's being watched, said Davina Kent, TiVo's vice president of national advertising sales. She said TiVo monitors subscribers' viewing patterns as a group, not individually.
Still, the data could lead to a whole new way of measuring the audience for commercials, helping advertisers learn if their ads are being watched.
May 17, 2006
By Keith Reed, The Boston Globe
Three years ago, Tiffany Hogan ditched her VCR for TiVo, and watching TV has never been the same.
"I call it my boyfriend because it's always got something waiting for me when I come home," said Hogan, 31, who bought a second TiVo system for her bedroom last year.
She now watches NBC drama Law & Order, which airs Wednesdays at 10 p.m., on Thursday mornings when she's not as tired. Even when she's awake to watch a show in its scheduled time slot, she waits until about 20 minutes after the show starts so she can fast forward through commercials.
Ad-skipping and the so-called time-shifting of TV - viewing on your own time instead of the network schedule - are ushering in an upheaval in television and advertising. Both industries are grappling with how to get people to watch commercials when they don't have to, how to measure audiences when they're watching at different times, and how to capitalize on monitoring viewer habits.
Digital video recorders such as TiVo allow you to record TV shows to a hard drive without the hassle of dealing with videotape and setting the VCR. By 2010, about 50 percent of US households will have a digital video recorder, up from 12 percent today, according to research firm Strategy Analytics.
It's a terrifying statistic for advertisers and networks because "the thing that scares us most is that they say, 'When we get TiVo, we're going to skip commercials,'" said Kristi Argyilan, the executive vice president of channel insight at Arnold, a Boston ad agency.
The new TV-watching behavior spells as much trouble for advertising rates. Networks still schedule top shows for weekday evenings, but prime time could become passe because networks may no longer be able to measure viewership by tracking how many people are watching a show at a given time.
"They're disrupting the appointment viewing model," Jim Penhune, the director of broadband media and communication research with Strategy Analytics Inc., said of DVRs. "That's how the advertising is sold, and that's how television is supported."
TiVo Inc. created the digital video recorder in 1997, and the device has become so prevalent that TiVo is less a brand than a verb for recording TV shows. But the technology is taking off, thanks to cable and satellite competitors such as Comcast Corp., which offers a DVR option for a $9.95 a month. By comparison, TiVo charges a one-time box fee of up to $80, plus a monthly service fee of $16.95 to $19.95.
DVRs are forcing advertisers to be more creative. Chicken chain KFC ran a commercial in March that required viewers to record it, watch it in slow motion, find a hidden message (the word "buffalo"), and enter it on the KFC Web site to get a free Buffalo Snacker sandwich.
ABC refused to air the ad because it thought that the tactic constituted a subliminal message, but a KFC spokeswoman deemed it successful nonetheless: KFC.com had a 40 percent increase in traffic during the commercial's run, and more than 300 million of the sandwiches have been sold to date.
Arnold, the Boston ad agency, shot 10 30-second commercials for the Truth antismoking nonprofit group that became a five-minute sitcom called Fair Enough when recorded and watched together.
"Creative itself has to be far more entertaining first and advertising second," said Edward Boches, the chief creative officer Boston ad firm Mullen.
Some marketers, though, are increasing the number of product placements - paid mentions or on-screen shots of a product during a show.
Fox's American Idol talent show, for instance, features shots of Coca-Cola cups, and fans are encouraged by host Ryan Seacrest to vote using Cingular Wireless phones. During its two weekly broadcasts the week of May 1 through May 7, American Idol had 129 occurrences of product placement, according to data from Nielsen Media Research.
DVR technology lets consumers record TV shows to a hard drive. But the box is also connected to TiVo or your cable company through a phone or cable line, which allows them to monitor what you're watching and when, except when using CableCard 1.0 but this will soon be fix with the introduction of CableCard 2.0.
TiVo can track every click of a user's remote control and collects second-by-second data on what's being watched, said Davina Kent, TiVo's vice president of national advertising sales. She said TiVo monitors subscribers' viewing patterns as a group, not individually.
Still, the data could lead to a whole new way of measuring the audience for commercials, helping advertisers learn if their ads are being watched.