What are the effects of DVR on advertising?


Fast-forwarding That Ad May Not Be That Bad

People who do watch recorded programs don't necessarily skip the ads. Studies have shown that DVR users only fast-forward through about half of all ads during playback [source: Carter]. In other words, even though they can bypass commercials, DVR users don't always do it -- they schlep through the ads out of laziness or because it's become an almost ingrained behavior after decades of passive TV watching. When experts combine these stats with DVR adoption projections, they estimate that consumers will fast-forward through 5 to 8 percent of all ads and 13 percent of prime-time ads in the future [source: Neff].

If this doesn't make executives and agencies feel somewhat relieved, there's another silver lining in the dark clouds of DVR: Even fast-forwarded ads can make an impression on viewers. This finding comes out of 2008 research conducted by Boston College scientists who studied the impact of fast-forwarded ads with images centered on the screen. They discovered that candy-bar ads with information placed in the center of the screen still create brand memory and generate demand in consumers even with a loss of audio and a 95-percent reduction in frames viewed [source: Durfee].

It's one thing to change buying behavior in a controlled experiment -- what about the real world? Duke University researchers may have answered this question in a recent study. For three years, they compared shopping patterns in households with a TiVo to shopping patterns in households without DVRs. Guess what they found? Regardless of the technology configuration, people's shopping behaviors didn't change [source: Gallagher].

So what's the takeaway for company and ad agency executives? A majority of people, at least in the foreseeable future, may never own a DVR. Those that do will continue to watch a healthy portion of their programming "live." Some ads will be fast-forward victims, but if they're designed correctly, with images placed in the center of the screen, they will still influence buying behavior. It should also be noted that DVRs actually increase the amount of television being watched because they allow consumers to record and watch shows that they may have been forced to miss before they owned a DVR. Any way you slice it, the bottom line seems clear: TV advertising won't be on a deathbed anytime soon.

Recent statistics published in Ad Age bear this out. In 2009, U.S. ad spending fell almost 12 percent, the biggest drop since the Great Depression. Much of this falloff, however, was due to the general recession, not DVR use. In 2010, ad spending experienced 5.9 percent growth. That growth should continue in the near future, with broadcast ad spending, in particular, growing steadily between now and 2015 [source: Johnson].

All of this is good news for TV ad execs and the icons they create. We can expect to have the smooth-talking GEICO gecko in our living rooms for the next several years.

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Sources

  • Carter, Bill. "DVR, Once TV's Mortal Foe, Helps Ratings." Nov. 2, 2009. (March 19, 2011)http://www.nytimes.com/2009/11/02/business/media/02ratings.html
  • Dolliver, Mark. "Watching Television, With or Without a TV." AdWeek. Feb. 8, 2010. (March 19, 2011) http://www.adweek.com/aw/content_display/news/digital/e3i3a15dfaab86484fb053116829bd4b2f6?pn=1
  • Durfee, Rachel. "Was That A Burger That Just Flashed By? ... Mmm, I'm Hungry." Nov. 7, 2008. (March 19, 2011) http://www.popsci.com/entertainment-amp-gaming/article/2008-11/was-burger-just-flashed-bymmm-im-hungry
  • Gallagher, James. "Duke study: TiVo doesn't hurt TV advertising." Triangle Business Journal. May 3, 2010. (March 19, 2011) http://www.bizjournals.com/triangle/stories/2010/05/03/daily6.html
  • Johnson, Bradley. "Ad Spending Is on the Rise, but Growth Rate May Slow." Advertising Age. Dec. 20, 2010. (March 19, 2011) http://adage.com/article/news/ad-spending-rise-growth-rate-slow/147744/
  • Moyer, Michael. "The Everything TV." Scientific American. November 2009.
  • Neff, Jack. "DVR Threat to TV Ad Model Looks Increasingly Manageable." Advertising Age. Dec. 15, 2010. (March 19, 2011) http://adage.com/article/mediaworks/advertising-dvr-threat-tv-ad-model-slowing/147661/
  • ScienceDaily. "DVR Fast-Forwarding May Not Be Fatal To TV Advertising." Nov. 21, 2008. (March 19, 2011) http://www.sciencedaily.com/releases/2008/11/081103102314.htm
  • Seeking Alpha. "Snickers Satisfies Super Bowl Viewers Once Again, Takes the Top Spot on TiVo's Top-Ten Ad List." Feb. 7, 2011. (March 30, 2011) http://seekingalpha.com/news-article/551092-snickers-satisfies-super-bowl-viewers-once-again-takes-the-top-spot-on-tivo-s-top-ten-ad-list

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