TiVo, Friend or Foe? Rumors of the Death of TV Advertising May Be Greatly Exaggerated

Penetration of TiVo and other DVR players has reached 25 to 30 percent. Half of all DVR owners fast forward through ads and 50 percent of television viewers multitask. TV couldn’t possible be working right? Not according to presenters at the Future of Advertising Empirical Generalizations Conference at the Wharton School.

“TV advertising is at least as effective as it has ever been,” said Joel Rubinson, CRO of The Advertising Research Foundation, who looked across 388 cases in 7 key databases. “It works best in generating brand awareness and recognition.” New technologies may make it even more effective. “The future for TV is that it is going to get more effective as technology allows you to use the ad serving environment in the TV environment.”

The 2008 U.S. political elections offer a case in point. TNS  found that of a total of $900 million in presidential marketing (including the primaries), $700 million was spent on TV (as reported at an ARF event). “The most empirical marketers I know are political advertisers,” said Chuck Porter. “They test and poll every night and they spent on TV. Obama raised the money online but he spent it on TV.”

Consumers who fast forward through ads on TiVo may actually pay more attention to them. Studies by Erik du Plessis, presented at the conference, found that while TiVo and other DVR equipment were expected to erode the impact of advertising — after all users buy the devices to fast-forward through ads — the abbreviated ads can be just as effective.

“To fast forward ads you must give attention,” du Pleissis said in prerecorded comments. Users have to pay attention to when they start and stop the process, and they see compressed versions of the ads. This quick glimpse can be as effective as a full ad, he found in studies with subjects in theaters and other research. “If an ad has been seen before, a fast forward ad is as effective as a full ad.”

Multitasking may also not necessarily be a distraction. “I’m working on this document on my laptop at 5 in the morning and I caught the last 7 seconds of a Pillsbury commercial,” said Rubinson. “I totally got the message.”

On the other hand, Duane Varan, Director, Interactive Television Research Institute, Murdoch University, cautioned that the impact of DVRs may be more complex. He pointed out that there are differences in ad recall from TiVoed ads immediately after and the day after, so these quick impressions may erode more quickly. Studies comparing households with DVRs to those without are quite different patterns raising further concern (although cause and effect are not clear). He also said that studies of multitasking also show that the distraction of other activities can be  “devastating” to advertising impact. “This stuff is a little bit more complicated,” he said. “It is difficult to draw empirical generalizations because we are in the early stages of a lot of these things.”

Of course, people were ignoring ads long before Tivo. “About a third of the time people were actively avoiding ads by leaving the room and a third of the time they were passively avoiding ads by doing other things,” Byron Sharp, Professor of Marketing Science & Director of the Ehrenberg-Bass Institute for
Marketing Science. “So the DVR may be replacing other avoidance behaviors.

“Don’t underestimate the future of TV,” Sharp said. “People are extremely habitual users of TV. It is part of their lives and there are more screens than ever.”

Robert Gunther


2 Responses to “TiVo, Friend or Foe? Rumors of the Death of TV Advertising May Be Greatly Exaggerated”

  1. 1 joel December 5, 2008 at 6:42 am

    thank you for the excellent summary. Just to clarify, I quoted TNS who spoke at an ARF council event, saying that they measured all presidential marketing (including the primaries) as spending over $900 million in total of which $700 million was spent on TV.

  2. 2 robgunth December 5, 2008 at 7:33 am

    Thanks. Corrected.

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