As more consumers start to use digital video recorders, the last ad in the commercial break could stand as a last refuge for worried advertisers.
A new study from IAG Research, which measures viewers’ responses to TV ads and product placements, found that people who use DVRs have one-third less general recall of commercials than people who watch the ads on live TV. Additionally, the study says, recall rates of ads viewed by DVR users are highest for those that air at the end of a commercial break.
The reason: Viewers who zap through ads “find it easy to isolate the point at which to start fast-forwarding through the ads, but have a hard time estimating when to stop,” the study found.
The findings illustrate the wholesale change DVR usage is expected to force upon the business of TV. DVRs have only reached about 17 percent of U.S. households, according to Nielsen Media Research, but their effect on how people watch TV is profound. Consumers can watch programs hours or days later, at a time of their choosing, and can easily skip ads.
The number of DVR subscribers is expected to reach 39.7 million by the end of 2011, or 34 percent of all U.S. TV households, estimates Interpublic Group of Cos.’ Magna Global, up from 18.7 million, or 16.9 percent, at the end of 2006. Already, a Nielsen study of the 2006-07 TV season finds nearly all the viewing declines in live TV for the period “can be attributed to the increase in DVR use.” And that’s with 97 percent of prime-time viewing still occurring live.
There are lots of reasons for advertisers to tremble. For one, even the broadcast networks believe about 60 percent of DVR users fast-forward right through the ads. Also, some folks use DVRs to watch programs days later, when a commercial slated to air at a specific time may no longer be effective.
Advertisers have long believed the first ad in a commercial break, or “pod,” was the one that gained the most notice. But with DVR use on the rise, some media buyers are beginning to believe otherwise.
The first ad takes place “exactly when the break starts, when you know you have a minute to leave” the program, says Alan Cohen, a managing director at Interpublic’s Initiative. The last ad is “where you have to pay the most attention” to figure out when to stop skipping, he said.
Securing this piece of advertising real estate won’t be easy—at least initially. Buying commercial time on networks has long been a game of sprinkling many ads across multiple breaks and programs, not figuring out a single, specific point for an ad to run.
Because first and last commercial pod positions have been thought to be the most recalled overall, networks often parcel them out in equal fashion to as many clients as possible. Allowing a specific advertiser to snatch up a first or last position in a pod would give an advantage over other marketers in the same ad break, and likely would give rise to marketers’ grousing.
Networks have resisted the idea in the past. Initiative, for instance, was able to run a five-second commercial for Time Warner’s AOL at the end of ad breaks on News Corp.’s Fox in late 2005, but it came only after several other broadcast networks rebuffed the idea, said Mr. Cohen. “It’s a lot of work to do it,” he added, but Fox agreed to “experiment.”
The IAG study also found that viewers of programming with a more serialized format, such as dramas, are more likely to watch with a DVR. As a result, perhaps, DVR viewers’ recall of ads in dramas is somewhat lower than ads in other programming genres.
In another finding that could prompt debate, IAG’s study said that ads with more “creative” flair tend to be better recalled by DVR viewers. This echoes a sentiment being put forth by a number of broadcast network executives, who maintain that while they have a responsibility to find ways to make sure viewers stick around to watch commercials, advertisers share part of the burden and must increase the quality and attractiveness of their ads.