TiVo to TV Advertisers: Seek New Ways to Reach Viewers
Addressing an audience mildly hostile to TiVo and other time-shifting devices, Mark Risis, director of interactive ad sales, told attendees Tuesday at the Future of Television conference in New York that broadcasters and advertisers should be seeking new ways to reach consumers with the 30- second commercial. Risis was a panelist during a session devoted to rethinking traditional TV advertising.
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Introducing Risis, moderator Gavin McElroy, an attorney, said TiVo has disrupted the revenue structure of the business but has been a huge hit with consumers. “Mark’s company is the one that has broken down the industry,” he said, “or as a friend of mine said, [TiVo’s] ’the most useful technology developed over the past 10 years.'”
Responding to McElroy’s introduction as “the destroyer of TV advertising as we know it,” Risis unapologetically claimed, “guilty as charged” and went on to challenge the industry to move forward and embrace opportunities enabled by new technology. “The invention of the digital video recorder was not the cause of the problems of the 30-second ad,” Risis said: “As soon as the technology was deployed, consumers immediately started to embrace its potential.” DVR penetration is at 28 percent of TV households, he said, predicting continued growth as the company finds new ways of engaging consumer interest including this week’s announcement of pizza delivery via TiVo.
“We embraced the challenge a long time ago of finding new ways of reaching TV viewers that are more compatible with what they want,” Risis said. The company is also looking at ways of reaching viewers through the interactive program guide, investigating ways to prompt them about what they're missing when fast-forwarding through commercials, and looking to serve viewers with messaging while the DVR is in pause mode, he said.
“The behavior of pausing a program when you're watching a live program just so you can get to a commercial spot that you can fast-forward through is continuing to be more pronounced,” Risis said. “We're serving an ad unit when somebody presses the pause button. So yes, we did invent TiVo, we did invent the DVR and we did cause the problem, so to speak.”
When McElroy asked what his ad agency clients are supposed to do next, Risis responded, “they start to think of their 30-second commercial as something more than a piece of video that interrupts somebody’s programming. The role of the 30-second commercial has to expand.” He said the 30- second ad is here to stay, “but it’s more about thinking of new ways that the 30-second commercial can function both as a linear message and message that can be interactive -- something that can be clicked on, clicked into and engaged in a long format.”
“The questions shouldn’t be whether the 30-second commercial is here to stay or not, but how do we redefine it?” Risis said. “How do we make it work harder and be active when people do engage in fast-forwarding, when people do zap through the commercials? How do we tell them that they're missing something that’s important to them and that they should take the time to opt in?”
Pat Dunbar, director of Mediaroom and connected TV advertising for Microsoft TV, said advertisers are getting smarter about commercials rather than thinking terms of the 30-second spot: “Five years ago you could look at advertising as ’tonnage.’ One company was buying 1,000 ads a day.” She said fragmentation in marketing is breaking down now and technology is enabling new types of connectivity for advertisers to use.
Dunbar said advertisers have the technology to dynamically insert ads, and IBC Advertising will have dynamic insertion in set-top boxes at the end of next year in both linear and video on-demand programs using Microsoft’s Mediaroom platform. “We're trying to target a number of different variables to allow consumers to be more in charge of the media they're watching and of the engagement they're having with the marketing messages marketers want to get out,” she said.
Defying conventional wisdom, Patrick McGowan, senior vice president at ABC TV Network Sales, said recent information indicates people in DVR homes are actually seeing more commercials than people in non-DVR homes due to increased viewership. He said viewers are fast-forwarding through ads considerably less -- as much as 50 percent less - - than was anticipated.
McGowan said technology offers new opportunities, and the industry has to figure out a workable ad model. He said new platforms are not cannibalizing TV viewing since people are watching online or on DVR because they couldn’t watch programming live. Citing Nielsen numbers, he said in the pre-DVR days, the top-rated shows, based on a 4-show month of new programs, had viewership ratings of 1.8-2.2 shows per month. With the advent of the DVR, he said, that number has increased to an average of 2.7 shows per month. “We still have an advertising challenge,” McGowan said, “but the opportunities have grown.” -- Rebecca Day
Future of TV Conference Notebook…
EchoStar Holdings will ship set-top boxes globally next year featuring Sling Media’s place-shifting technology, targeting both the satellite and cable industries, said Michael Hawkey, vice president of sales and marketing. The cable boxes will also will be based on the tru2way platform, he said. EchoStar signed an OCAP agreement with CableLabs earlier this year. Hawkey declined to disclose how many models will be available and what the pricing will be. Dish Networks, which spun off its EchoStar satellite set-top-box business earlier this year, acquired Sling for $380 million in 2007 (Sept 26/07 p1), shortening by two to three years an internal effort to develop similar technology. The Sling players are available as standalone products through national retailers like Best Buy and Circuit City, but EchoStar plans to use the technology to expand its OEM business. It will continue to develop and market standalone Sling players, Hawkey told us. Dish Networks and Canada’s Bell ExpressVu are EchoStar’s two largest customers, accounting for 89.8 percent and 6.8 percent, respectively, of its $616.1 million in Q3 revenue, EchoStar said in its 10-Q filing at the SEC. Hawkey declined to comment on other potential customers, but said Sling technology is being marketed globally. --MS
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EchoStar Holdings will ship set-top boxes globally next year featuring Sling Media’s place-shifting technology, targeting both the satellite and cable industries, said Michael Hawkey, vice president of sales and marketing. The cable boxes will also will be based on the tru2way platform, he said. EchoStar signed an OCAP agreement with CableLabs earlier this year. Hawkey declined to disclose how many models will be available and what the pricing will be. Dish Networks, which spun off its EchoStar satellite set-top-box business earlier this year, acquired Sling for $380 million in 2007 (Sept 26/07 p1), shortening by two to three years an internal effort to develop similar technology. The Sling players are available as standalone products through national retailers like Best Buy and Circuit City, but EchoStar plans to use the technology to expand its OEM business. It will continue to develop and market standalone Sling players, Hawkey told us. Dish Networks and Canada’s Bell ExpressVu are EchoStar’s two largest customers, accounting for 89.8 percent and 6.8 percent, respectively, of its $616.1 million in Q3 revenue, EchoStar said in its 10-Q filing at the SEC. Hawkey declined to comment on other potential customers, but said Sling technology is being marketed globally.