Marketers Preparing for a DVR/TiVo World

Originally published on December 22, 2008

Years ago, or seemingly so, our industry gave great consideration to how advertising would survive when television ads would be skipped – all due to the advent of the "DVR Household." So how have advertisers responded to the new opportunities being created for enhanced marketing by TiVo and others as the television landscape has changed? "Slowly" states one major media agency head. "With all the new interactivity these platforms provide to really engage consumers, I'm surprised at the resistance of some advertisers to fully get on board with these offerings. Some will run a small schedule – mostly on a trial basis – but the time has certainly come to fully adapt and integrate DVR advertising into the brand's communication mix." And he doesn't even mention all the back end data and R-O-I measures that can be created, which is the real beauty of the TiVo/DVR environment.

Two years ago, the television industry's buyers and sellers reset our audience measurement metrics to adapt the C-3 ratings. It was a good idea, and nobody got hurt. We acknowledged that an ad scheduled to run Monday, but which was time shifted to Tuesday, really didn't negatively impact the delivery of the overall schedule. And most advertisers, who's job is to create sales and build long term brand equity, found the three day window for time shifted viewing acceptable, which is why we settled on C-3. Change came, we found ways to work with it, and we moved on.

With this time-shifted acceptance, the industry's sense of urgency to adopt new advertising formats and tactics seemed a little slow to gain broad acceptance. Although TiVo, VOD providers and others have actively developed valuable enhancements to further deliver on the promise of the TV medium's future, growth has been slow. We have accepted that the DVR is not the evil device that will destroy television (and there were those who said it would), but it has yet to be assertively embraced by most as a viable investment for the future. Only a handful of advertisers are now taking advantage of integrating advertising into such things as the navigation menus, advertising-during-pause and fast-forward features, showcases, direct commerce and telescoping.

Data from various sources indicates that DVRs will be in more than half of all US households within a few short years. As the economy continues to decline and as digital set-top boxes and high definition TVs become more ubiquitous, DVR functionality will have an ever-increasing impact on advertising value.

Some companies recognize the importance of jumping fully on board right now to claim their real estate and be prepared when DVR solutions are required components of most TV advertising schedules. An excellent example is the Domino's/TiVo partnership, in which TiVo subscribers can order Domino's Pizza via their remote controls. The deal also includes other features that TiVo subscribers will recognize, allowing easy navigation and functionality. Others are in development or already in market. As of July, TiVo subscribers could place orders for products from Amazon.com and TiVo has struck a deal to allow subscribers to access NetFlix movies directly via their TV. And this all includes rich back end data that assures the type of measurability and accountability that internet advertising provides and marketers increasingly demand.

Should more advertisers need to be on board? Absolutely. Interactivity with television programming and content, enabled by DVRs and software like TiVo that drives them, will only increase in the coming years. To what degree will ultimately be determined by consumers and their adaptation. If you agree that the advertising landscape is being driven increasingly by consumer choice and interaction, you must explore and commit to investments in building your home in that landscape. Advertisers who adopt these new platforms into their communications and advertising mix will not only reap the benefit of enhancing their consumer relationships, but will also find higher degrees of engagement and equity for their brands.

Jack Myers Media Services LLC advises TiVo on strategic business development opportunities.

About Andy Jung:
Andy is the former Sr. Director of Advertising and Media at Kellogg's, and is currently serving as an industry consultant in media optimization, trade regulation and organizational planning. He also serves on the Board of Directors of the American Advertising Federation. Andy can be reached at andyjung@mac.com.