Addressable TV advertising. There are no words held more sacred these days on Madison Avenue. Many seem to believe it is the Holy Grail, the final conquest, the silver bullet that will single-handedly save the television advertising model. There are hundreds of millions of dollars chasing this dream, across technology providers, TV distributors, research providers, content owners. The list goes on and on. Imagine the power unleashed when you can deliver your dog food ad only to households who have dogs (to cite the most over-used cliché since Jennifer Aniston's sweater). No waste. Better engagement. Orders of magnitude increases in ROI.
Except for one problem - the DVR. Because no matter how well ads are targeted, the fact is in DVR homes, most of them are still going to be fast-forwarded.
Don't get me wrong, I'm not anti-addressability. Any well-designed targeting, including ads delivered by some form of "addressability," is a good thing. It can even help reduce the amount of fast-forwarding in DVR homes. For example, using the TiVo PowerWatch opt-in panel, we found that households with children under 12 are significantly more likely to NOT fast-forward ads for products in categories such as Children's Skincare, Toys & Games, Computer Games & Educational Software, and Schools & Camps. Whereas households with adults 50+ were more likely to NOT fast-forward ads for products in categories such as Political Parties, Collectibles, Hair Restoration Products & Wigs, and Foreign Tourism. But at the end of the day, even though there was less fast-forwarding of ads among the respective target populations, the majority of ads were still fast-forwarded among time-shifted viewers.
Regardless of your bullishness or bearishness on DVR adoption, most agree it won't be long until over 50% of households have DVRs, with more than 75% of affluent households having DVRs. It's not so hard to imagine a world where the industry finally cracks the code and starts delivering some meaningful amount of addressable ads, only to have those ads be fast-forwarded in the homes they're addressing. That is not a recipe for saving the industry.
Certainly there is plenty of old-fashioned linear TV viewing that goes on, even within DVR households. And for the ads that do get through, in either Live or Time-shifted context, it is far superior to have them reaching the right targets. (The right targets, by the way, are not defined by age/sex demographics, but I've beat that subject to death in my last couple blogsso I'll give it a rest for now.)
While the work goes on toward building addressable capability, however, I believe its very dangerous to not work equally hard to develop new types of advertising and communication models that work within a DVR context. After all, DVRs do build larger TV audiences, have tremendous interactive capabilities, and users that are indeed interacting with the screen. There have got to be some phenomenal marketing models resident in this environment. In a DVR context, it's less about "addressability" per se, than it is about "giving the audience the opportunity to interact with the right message at the right time." And yes, TiVo is a leader in this space, but there are others too, and I hope more focus and innovation will emerge. Solving this is certainly as important as solving addressability and better than putting all of the industry's eggs in the addressability basket.
Todd Juenger is VP and General Manager, Audience Research and Measurement for TiVo, Inc.
Read all Todd’s MediaBizBloggers commentaries at InteracTiVoty - MediaBizBloggers.