Advertising Is More Than Just TV Commercials

If you’re in the ad biz and aren’t up nights worrying about DVRs’ effect on traditional broadcast advertising, get your head out of the sand. Even if you’re not a traditional ad person, the impact DVRs have and will continue to have on how we reach customers and prospects will be a lot bigger than many of us imagine.

We’ve known for a while DVR owners use the devices to skip ads. There’s been plenty of press about TiVo’s (and similar devices’) effects on ad viewing behavior. Some recent studies, especially an upcoming report from MPG, shed new light on what these device owners really do.

First, let’s clear up a big misconception: These devices won’t have a significant impact on the marketplace. According to Jupiter Research (a Jupitermedia Corp. division), the DVR market is expected to control 80 percent of the market in five years, especially as satellite and cable providers increasingly provide DVR capabilities in set-top boxes.

Make no mistake: Pay-TV providers will lead the charge, especially as subscribers start receiving DVR-equipped boxes for free as part of their regular service.

Consider the overall trends in entertainment electronics. People move to digital recording technologies over time. The music biz is a perfect example. It won’t be long before CDs are as quaint as vinyl discs. More people will move to MP3 players as prices drop. And why not? If you can store literally days of music inside a deck-of-cards-sized device, why lug around all those circular hunks of plastic?

Eventually, video will move the same way. Why store all those DVDs when you can keep your entire movie collection on a smallish hard drive attached to your TV and shuttle those movies around your home network to the desired TV screen in your house? No, it won’t happen tomorrow. But I’d say it’s inevitable.

What happens when TV goes digital and people have control over their viewing experience? According to MPG’s new study, they stop watching ads. Live or recorded, behavior was pretty similar: 90 percent report skipping commercials on recorded programs and 84 percent report skipping commercials when watching “live” TV with their DVRs. Though only 5 percent report buying a DVR because it allows them to skip ads, respondents rank that ability as the device’s second most important feature.

Lest you think MPG’s study is a fluke, recent research by Lyra provides some stunningly similar results. In fact, Lyra found a good portion of DVR users actually delay live viewing to skip commercials.

MPG’s study examines commercial content to determine if any correlation exists between type of commercial and whether DVR users skip them. Interestingly, humorous commercials are less likely to be skipped. Celebrity endorsement ads or spots with heartwarming themes are more likely to be zapped.

In the context of viral marketing (you’ll find plenty of good examples here), this makes perfect sense. People pass around spots that are funny or outrageous, not feel-good spots or celebs hawking wares. When consumers are in control, they tend to choose stuff that entertains.

“Control” is the operative word. Technologies such as DVRs, the Web, and even downloadable music, give consumers more control over their entertainment options. It’s time advertisers and agencies realize the day of the passive consumer is drawing to a close. Richard Linnett, director of MPG Entertainment, MPG’s branded technology division, puts it this way:

Technology puts consumers in the driver’s seat when it comes to controlling their entertainment experience…. There are many new avenues opening in the world of marketing as there are roads closing. The new options are more consumer-friendly and more specific in their reach for advertisers.

Early adopters may be in the driver’s seat today. Rest assured, as the technology becomes cheaper and more ubiquitous, everyone will be in control of her viewing experiences. It’s inevitable. And it’s time advertisers started thinking hard about how to reach increasingly elusive consumers who choose to watch what they want, when they want.

Consider innovative branded experiences, such as advergaming and sponsored content. See the Web as the most important fulfillment vehicle for consumers seeking information on your products and services. Provide branded services to consumers to assist their buying decisions. And use viral marketing and online experiences that draw consumers in while immersing them in your branding messages (e.g., Dr. Angus Interventions). All must be considered in your marketing mix. Marketing will get a lot tougher and a lot more complicated. In the end, the most creative advertisers will win.