It’s Inescapable: DVRs Here to Stay

Nov 29, 2004  •  Post A Comment

By Steve McClellan

Special to TelevisionWeek

For years The WB founder Jamie Kellner was a lone voice in the wilderness, warning his industry about the profound impact that digital video recorders would have on the reach and efficiency of the 30-second commercial, the keystone of the TV advertising business. Lots of other industry executives thought Mr. Kellner had gone off the deep end or, at the very least, was obsessed with the subject.

But not anymore. A survey just released by the American Advertising Federation shows that for the first time the prevailing view among advertising executives is that the DVR will force the industry to radically change the way it creates and delivers messages to the consumer.

More than 75 percent of the AAF respondents, who included 121 senior industry ad executives, said they now believe that DVR ad-skipping technology will have a dramatic effect on the landscape of TV advertising, leading to continued growth of nontraditional ad formats.

And there is growing alarm that the DVR may just kill off the 30-second spot altogether-21 percent of the AAF respondents said they thought so, compared with just 13 percent who held that view in a similar study conducted a year ago.

The majority of the respondents (55 percent) said they believe that the 30-second spot will continue as the foundation of the TV ad business, albeit one supported by newer marketing forms, including product placement, sponsorships, “advertainment” (such as that series of short films by renowned filmmakers that BMW put on its Web site two years ago), DVD-based marketing and online.

Earlier this month CBS conducted separate research that supports this view. CBS has an ongoing household research panel that includes 1,200 DVR homes. About 75 percent of the respondents said they fast-forwarded through commercials.

But surprisingly, the fast-forwarding group posted commercial recall scores that were comparable to scores typically achieved by viewers watching TV in real time and sitting through the spots. That is, they correctly identified (either by brand or product category) about 23 percent of the spots while zipping through them.

“If you look at 24-hour recall studies they’re pretty comparable” to the recall of the DVR users in the CBS panel, said David Poltrack, executive VP of research and planning for CBS. “That’s pretty astounding.”

The CBS research will be unveiled in detail Dec. 6 during the UBS Media Week Conference in New York.

Another astounding finding: The vast majority of DVR users in the CBS sample (more the 75 percent) use the DVR to record and watch previously recorded material as well as watch some real-time TV every single night of the week. (The survey tracked usage for 14 consecutive nights.)

If that’s not indicative of behavioral change, nothing is. Currently, DVR penetration is between 4 percent and 5 percent of the nation’s TV households. Nielsen predicts that this will reach 10 percent in the next year, while others are predicting critical mass just a couple of years after that.

Commercial avoidance by consumers has been a question for marketers since the advent of the VCR 20 years ago. But back then, time-shifting of shows was minimized by the requirement that users input dates and times to be recorded. DVRs, introduced in the late ’90s, changed that by automatically programming recording times.

In terms of future ad planning, Mr. Poltrack’s big take-away from the CBS research is that marketers are going to have to start producing TV commercials in a manner that highlights products visually throughout the spot. Clever dialogue is OK, but spots that make the viewer wonder what is being advertised probably won’t cut it.

“In the DVR world, you need to make spots with identifiable visual elements,” Mr. Poltrack said. “Products or logos should be visible throughout most of the commercial because what you’re trying to achieve is a fast-motion billboard kind of effect.”

Mr. Poltrack wasn’t the only one surprised by the high recall of the spot-skipping DVR users in his survey. Some ad agency executives were somewhat taken aback as well. “It does surprise me that the recall through fast-forwarded spots would be that high,” said Bruce Goerlich, executive VP and director of strategic resources at Zenith Optimedia. “Hopefully CBS isn’t trying to sell the industry on the value of the two-second commercial.”

Not the intention, Mr. Poltrack said. But using billboard-type techniques may just boost recall for ads. That may be even more critical for ads in lower-rated shows, because as DVR playback increases, it will be at the expense of shows with smaller audiences that viewers don’t mind missing to watch something they’ve recorded.

And while it’s a good thing the industry is paying attention to the issue, Mr. Goerlich said DVRs are really still in the first-adopter stage of rollout. “First adopters don’t necessarily reflect the viewing patterns of the entire viewing universe,” he said, noting that upscale males have embraced the technology more than other demographics to date. “If that’s the audience your ad targets, then you need to consider the DVR effect today,” Mr. Goerlich said. “But if you’re selling arthritis medicine, then maybe not.”

David Ernst, executive VP and director of futures and technology for Initiative, said he’s not surprised that CBS’s DVR users posted high recall scores. “One of the things we’ve seen [in Initiative’s own testing] is that viewers use the DVR as a clutter buster. They see the ad and skip through it. It makes a registration but doesn’t communicate the kind of messaging intended, so it’s a double-edged sword.”

Mr. Ernst said there is some merit to Mr. Poltrack’s suggestion that billboarding techniques may grab the attention of DVR users. But beyond that, advertisers need to develop “creative advertising that is engaging and that entices viewers to watch the ad as much as the programming. Advertisers have treated people like they were chained to chairs” and forced to watch ads. Now, he said, “there is more onus on the [ad makers] to create spots that people actually want to watch.”