PRINTRemotely controlled
Advertisers analyze TV viewers’ habits
Katherine Ley
August 14, 2008 | 12:00 a.m. CST
Click. One swift finger movement capable of so much. Increasingly, viewers have the power to control their television-viewing destinies. But inventions such as TiVo have advertisers scrambling either to innovate or relocate.
Since the inception of TiVo and DVR, television audiences can not only record favorite shows but also skip incessant commercial breaks when they sit down to watch.
Related ArticlesRecently, TiVo has teamed up with Amazon to create a way to allow viewers to purchase items featured in a show or a commercial with a click of the remote, regardless of whether the program is live or recorded. For example, are you enjoying the band playing on the Late Show with David Letterman? With the push of a button, their new album will be en route to your living room.
TiVo’s services to advertisers extend even further than this. Its program, PowerWatch Ratings Service, which allows second-by-second commercial audience measurements, is providing advertisers with key data about target audiences. One might guess that older TiVo users sit patiently through the commercials, perhaps not so familiar with the technology, whereas younger users don’t watch a single commercial. PowerWatch’s newest report would say otherwise. A random sample of 20,000 TiVo users showed that every user watches commercials but only the ones that are relevant to him or her.
For instance, although 66 percent of ads are skipped by users, the one about baby shampoo in a household with young children will be played and viewed.
This trend shows advertisers that commercial skipping is not quite as all-encompassing as once thought. In fact, PowerWatch research indicates that if advertisers have an ad that is relevant and effectively delivered, viewers will actually stop fast-forwarding through the commercial and watch it.
This news should be taken to heart by NBC Universal, which recently shelled out $894 million for the exclusive U.S. rights to the Olympic Games in Beijing. The company, which hoped to earn $1 billion in Olympic commercial ad sales, has already surpassed that goal and is working toward effective distribution of ad placement.
NBC Universal plans to air 3,600 hours of Olympic coverage from Aug. 8-24 via broadcast, cable TV and online outlets. They have decided to dramatically increase the number of events carried live during prime time broadcasts because audiences tend to tune in for big event sports (for example, the Super Bowl) broadcast in real time. It is also offering advertisers online ad space to accompany TV ad buys. Presidential candidates Barack Obama and John McCain capitalized on the opportunity. Obama shelled out $5 million to land spots during the games, and McCain followed by purchasing $6 million in ad time for his campaign.
Mark Hotchkiss, director of sales at KMIZ in Columbia, says that despite a substantial increase in Internet ad sales and commercial-skipping technologies, the broadcast advertising business is healthy as ever. This might seem a contradiction to national averages, but Hotchkiss explains: “I don’t see certain segments of the population as likely to get DVRs as others. The average amount of time a day Americans watch TV is (still) higher than ever before.”
Luke Daniel, Internet sales manager for KMIZ.com in Columbia, agrees with Hotchkiss’ assessment. He says viewers are able to enhance the effectiveness of advertisers’ dollars via Web sites. “Internet sales will continue to increase,” Daniel says, “but the dollars are not coming from advertisers cutting back on TV buys. Technology changes every day, which provides so much opportunity and challenges. iPhones and mobile delivery are the next generation, and advertisers have to be a part of it, or else they will get left out.”
Constant and rapid innovation in technology challenges advertisers to modernize their distribution tactics. However, partnerships being made, such as the one between TiVo and Amazon, can guarantee advertising a secure spot as a television viewer’s couch potato buddy.
