TV Industry Faces Ad Avoidance Crisis More Severe Than Financial Crisis, Warns TiVo CEO

In a rousing breakfast presentation at last week's sold-out Association of National Advertisers Conference, TiVo president Tom Rogers warned attendees that "in the next two to three years the television industry is going to face an advertising crisis more severe than our current financial crisis." Rogers, who founded CNBC in 1989, suggested that "in retrospect, everyone should have seen the current economic crisis coming but as to the coming ad crisis, you have no excuse. You have sufficient warning about television commercial avoidance and the growing epidemic of fast forwarding thru ads. Look what happened to the music business," Rogers advised. "Look what is happening to the newspaper business. If you don’t come out of this room acting urgently, what’s going to happen in the television business will probably make that look like kids stuff. If you think this recession is tough to deal with, believe me it is nothing compared to the downturn in your brands that will come if you do nothing while television advertising goes avoided."

Although TiVo penetration is at 3.5 million today, the company recently won its ongoing patent battles with DISH Network, and has established long-term distribution deals with DirecTV, Comcast, Cox and several other cable operators. TiVo is acknowledged as having the most advanced DVR user-interface and TiVo households are the most representative of the DVR home of the future. "The most powerful and impactful medium is not going to be very powerful, impactful, or even useful," Rogers warned, if marketers don't quickly come to terms with the solutions to commercial avoidance. "At 60 million homes, probably two thirds of homes or more that advertisers care about reaching will be fast forwarding the majority of television ads."

Rogers suggested there are many ways to catch the viewer’s eye and to engage the fast forwarding viewer: with tags; with full screen billboards; with entry off the user interface; with insertions when a viewer is asked if he wants to delete a show when he is finished watching – "any of which can lead to incredibly effective advertising."

Putting forth his version of a television rescue plan, Rogers argued "television can be more impactful than ever," complemented by second-by-second measurement tools to give television advertising all the accountability of the internet. "We are already processing a billion pieces of second-by-second data a day that demonstrates exactly what commercials are seen and which are not." He announced TiVo "can now accomplish a first - - combine a million television homes on a census level with the purchase data coming out of those very homes."

"We know already that brands that have been around for decades suffer major erosion in terms of purchases from DVR homes when the ads do not get through," Rogers pointed out. "But we are not seeing true urgency. You need to take this threat as immediate and urgent. There is so much to learn and so little time before the crisis of the vast majority of the homes you want to reach is not watching what you have to say. The New York Timesthis past week reported that for many key prime time shows, ratings increased by 40 to 60 percent and more in the 18 to 49 demo when DVR viewing is counted. And that big increment is not watching the ads - - today. It’s all about, learning what you need to do to get people to click into a TV ad to watch it because you can’t rely on them passively watching."

"If you wait," said Rogers, "it’s going to be too late. You won’t know what you need to do to get your ads through in this environment. I see a day if we all act urgently, that for once a media sector gets ahead of this kind of dislocation. I see a day where television advertising is not only more powerful and a better return on investment for your companies, but ultimately far more valuable for the consumer. What I see is a future for TV advertising that is far better than the state of the industry that exists today. But it requires immediate, urgent action well in advance of the crisis hitting."

For more information,Tom Rogers can be contacted at trogers@tivo.com and TiVo SVP Karen Bressner can be reached at kbressner@tivo.com. TiVo is a client of Jack Myers Media Services.

Jack Myersis available to work with your company to track the changing media landscape and to formulate and implement growth strategies. Contact jm@jackmyers.com.