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Marketers Seek New Approach As DVRs' Popularity Increases

Can you force-feed TV advertising to viewers who are determined to bypass it?

With the use of digital-video recorders on the rise, TV watchers increasingly are fast-forwarding through commercials -- threatening the very economic model that television was founded upon. The new technology is sending ad-agency executives into overdrive to devise new ways to persuade viewers to watch promotional messages.

"I need to figure out how to make people aware of my commercial, and, second, how to get them to choose to watch it," said Chuck Porter, chairman of Miami's Crispin Porter + Bogusky. "If I'm going to go to all that trouble, I'm just going to ask them to go to the Internet, where I can broadcast it for free."

The jury is out on whether consumers want to be passive when watching television "or whether they want to be as engaged as they are with the Internet," said David Cohen, senior vice president and interactive media director at Interpublic Group's Universal McCann. "All we can do now is test and see what works."

Already, one agency, Omnicom Group's BBDO Worldwide, is working with sister media-buying firm OMD Worldwide to examine ways to make ads that are relevant to people who watch TV with a DVR, said people familiar with the situation.

BBDO's participation is notable because it is one of the nation's best-known producers of conventional TV ads. For years, BBDO has made Super Bowl commercials featuring PepsiCo, FedEx and Visa USA. BBDO's hope is that it can come up with a technique that will lend it some distinction in the marketplace, these people said. "We are always interested in hearing new ideas that will help us move the needle," said a spokesman for Pepsi-Cola North America.

The search for new sorts of advertising comes as DVR penetration is starting to increase noticeably. About 7.4 million DVRs were deployed by the end of the first quarter, according to Interpublic's Magna Global, which said the number is equivalent to about 6.5% of all U.S households. The media firm anticipates that the number of DVR subscribers will reach 34.8 million by the end of 2010, or about 28% of all U.S. households at that time.

TiVo, the company whose name has become synonymous with the digital-video recorder, has already devised a number of ad methods, which could be followed widely. "Other DVR platforms will follow in lockstep," predicted Tim Hanlon, who studies emerging advertising venues for Publicis Groupe.

Consumers program TiVo by choosing various selections. One TiVo screen option is a "showcase" where, if consumers opt to do so, they can watch long-form video snippets from advertisers, as well as previews of movies or TV programs.

TiVo recently announced a method that allows advertisers to run "branded tags" during traditional commercials, so that even if someone fast-forwards through them, they will still notice an icon on the screen and decide whether to stop and click a button to learn more information. TiVo announced July 18 that General Motors and Time Warner's WB network would utilize some of these methods.

"We never force anything on [viewers] or interrupt in the middle of anything we are doing. We think that's the way we need to evolve going forward," said David Courtney, TiVo's chief financial officer, who also supervises the company's advertising initiatives.

TiVo, said Mr. Courtney, is set to announce that advertisers including ETrade are going to put branded tags in commercials that run on TiVo. "Whether they click on it or not, they are still going to see our brand," said Pam Erickson, an ETrade spokeswoman.

Madison Avenue believes viewers can be tempted. Offering consumers the chance to take part in something "that people would not normally be able to participate in" represents one viable method, said Jason Kuperman, director of operations and interactive marketing at Tequila, a marketing-services firm that is part of Omnicom's TBWA\Worldwide. Mr. Hanlon of Publicis suggested that a consumer-electronics chain can offer viewers the chance to preview a new music video, or an auto maker can use the DVR's interactivity to let someone in the market for a new car sign up for a test drive.

For ad agencies and the companies that own them, new promotional methods are crucial in a world where consumers are finding new ways to get the information and entertainment they once obtained through television, newspapers and magazines, said J.P. Morgan analyst Frederick Searby. "The big, traditional agencies are associated with very powerful, global TV-centric campaigns," he said. "The perception holds them back."

Consumers, meanwhile, are pushing forward. In the end, the one way to snare their attention may be to simply produce ads that are as compelling and entertaining as the TV programs the commercials currently interrupt.

 

Brian Steinberg, The Wall Street Journal. July 29, 2005

Copyright © 2005 Dow Jones & Company, Inc.. All rights reserved.

 

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