Commercials Aren’t Going Anywhere

Feb 26, 2007  •  Post A Comment

By Adam Armbruster, Special to TelevisionWeek

Remember these dire predictions?

1985: The VCR will destroy the effect of television commercials.

1995: The Internet will destroy the effect of television commercials.

2005: The DVR will destroy the effect of television commercials.

Well, guess what? The Super Bowl on CBS just brought together 47 percent of Americans on one day, accounting for the third-highest-rated live show in modern history. The game was exciting and the show was full of high-dollar commercials.

In the same week a DVR arrived in my home, which already holds three computers, six TVs (including one 83 inches wide), a Sony PlayStation, four cellphones, a whole-house audio system, a wireless network and, oh yes, a land-line phone that we have “just in case,” according to my wife.

If you listen to the warnings from media sages, you’d think few ads are seen anymore because “everyone uses their DVR to zap the ads.”

Also, the ongoing debate over live or delayed viewing of a commercial seems to imply that consumers seeing the ad a few days after they were “supposed to” has zero intrinsic value. We believe this assumption is wrong. Unless the campaign is a timed sales promotion with a specific expiration date, or there is a product distribution issue, then additional delayed viewing should be worth as much as a live audience. For example, if you digitally recorded the Super Bowl and watched it right now, would the Snickers candy bar ad be any less funny or effective?

It turns out that just 11 percent of us even have a DVR — and the percentage of folks who have a DVR and actually use it is about half that.

DVR households

have the ability to watch more TV, but they actually watch less TV than non-DVR households; the DVR owner is 23 percent less likely to be a heavy TV watcher.

Does this mean the DVR is destroying the effect of commercials?

Hardly. Rather, it means that due to the new convenience of the DVR, we are seeing growth in TV viewing among folks who, prior to the advent of the DVR, did not watch many TV shows at all.

The traditional four networks have been pushing commercial ratings because they want to get credit for the increasing amount of DVR usage during negotiations at the next upfront advertising market, where about 70 percent of broadcast ad time is sold. Advertisers counter that they don’t want to pay for viewers who skip ads using DVRs.

Since Nielsen’s new commercial ratings exclude zapped or fast- forwarded ads, these exposures seem to have been assigned a zero intrinsic value as well. I don’t know about you, but when I fast-forward my DVR I can make out most of an ad, and I usually can see the logo of the company that bought it. Is a local broadcast TV commercial, even when viewed quickly, really worth nothing? Let’s be realistic: This brief exposure is worth more than what companies pay to get three seconds of my attention to view a highway billboard as I whiz past.

The cable networks and syndicators also have complained about commercial ratings because, while Nielsen has been able to calculate broadcast ratings accurately, measuring cable has proved more difficult due to the length of the commercial breaks — breaks so long that the viewer gets lost in a sea of commercials between shows.

But let’s get back to the DVR.

Maybe I’m dating myself, but I remember when that new thing called the VCR was going to destroy television commercials forever. By the way, 88 percent of us own VCRs. But when was the last time you used your VCR?

In fact, heavy DVR users, all 7 percent of us, are a juicy target for the marketers who really know how to reach us on television. DVR users are twice as likely to have a $150,000 annual income and 60 percent more likely to have a $500,000 home. So if they watch less TV, and they are truly a “bonus” viewer to stations and networks, how do we market to them on television?

Here are our metrics for high-end consumer television marketing; they also apply to upscale DVR audiences.

Keep it simple. Use clean graphics with minimal visual distractions from the actual message. Use literal imagery or simple abstract ideas about a product. A good example is the latest Mac computer ads or Geico’s brilliant insurance campaign. Humor works.

Avoid hard selling. A hard-sell ad is dismissed as irrelevant by a high-income viewer; they like to control the buying experience.

Make the logo very prominent. Also, end the commercial with the company’s Web site URL in the center frame and make it last on-screen at least four seconds. This will ensure that even when a DVR viewer zaps an ad, he will at least see the logo and Web site address for a second or two.

The bottom line is that in a home full of gadgets and electronic wizardry, we can use only so much at one time. Rational minds accept that every new electronic gadget gets used often when it’s a novelty, but old habits soon return and the DVR will become the blinking VCR of today.

So this year, let’s focus on the 93 percent of the television audience who enjoy watching shows live, and also enjoy well-designed commercials that come with the program.

The VCR, the Internet or even the mighty DVR will not kill television commercials. And the simple commercial, that modern-day hero that has launched a thousand successful brands, will outlive us all.

Happy live same-day/live-plus-seven-day viewing, everyone.

Adam Armbruster is a partner in the Red Bank, N.J.-based retail/broadcasting consulting firm Eckstein, Summers, Armbruster & Co. He can be reached at adam@esacompany.com or 941-928-7192.

Sources: MediaMark, Nielsen Station Index, Television Bureau of Advertising, Cabletelevision Advertising Bureau, Ward’s Dealer Business.