Advertisers Use DVR Data To Demand Lower Ad Prices

from the skipping-for-dollars dept

Tue, May 16th 2006 10:09am — Carlo Longino

While networks and advertisers have been trying to figure out how to accomodate the growing popularity of DVRs to their businesses, uptake of the devices has now reached a point where advertisers are using it to demand lower TV ad rates. They're saying they only want to pay for "live" viewers, not those who record the show, and presumably skip the ads when they play it back. Networks, of course, are resisting -- just one factor contributing to advertisers' reticence at following the traditional model of buying ad space for the whole seasons well in advance, and also helping a shift in ad dollars away from TV ads to new-media campaigns. Obviously the networks want to resist any moves to lower the prices they charge, but the bigger disruption is one they share with advertisers -- that they must make significant changes to their businesses. They must adapt their broadcast ads to make them more compelling, so people are more interested in watching them. But they must also take advantage of existing TV broadcast content, and adapt it to other platforms that can also make money by showing ads. It would be great, for both TV networks and advertisers, if things could just carry on like they have in terms of TV advertising. But as consumers' viewing habits and preferences change, so to must the companies' business models -- even if it is hard work.

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12 Comments

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Be Reasonable, 16 May 2006 @ 11:25am

Real Viewing habits
I tire of the constant binary type of dialog on this issue. I've used DVRs for all of my TV watching for five years now. Guess what, sometimes I don't skip commercials. Let's be realisitic, the number of people who watch exclusively recorded TV AND skip ALL commercials is a small percentage of the population.

I suspect that the behaviour I have observed in my family of four is closer to reality. When time is short, or the show is intense the commercials are skipped. Also, often if the show is highly desired, say "Grey's Anatomy", it is watched live. When time is plentiful, or interest is less sometimes commercials are played.

It is my contention that advertising is ignored regardless of the use of a DVR. The opportunity provided is the ability to measure that avoidance using the DVR data.
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- Flamsmark (profile), 16 May 2006 @ 12:25pm
  
  Re: Real Viewing habits
  i'm a brit, and i can only speak for my family.
  
  since getting sky plus, none of us have watched an ad. we never watch live tv, only recorded, and we always skip [fast-forward through] the ads. if we want to watch something 'live' we wait until half an hour after it has started, then watch the rocording ad-free.
  
  one type of ad still defeats us though: since we can only fast-forward at human precision, the adverts that are right before each segment of the show tend to get seen, if they're five seconds or less, becuase it's just not worth getting that accurate with the fast-forward buttons.
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cjay, 16 May 2006 @ 11:33am

Commercial Rewind
Come up with a better commercial, and I'll watch it a couple times on the ol' TiVo. Those PC/Mac commercials kill me, and if I spot one, I'll stop and watch it.
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Joe Snuffy, 16 May 2006 @ 11:38am

commercials
I thought commercials were just a way for us to take bathroom and snack breaks without missing our favorite shows.
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mmrtnt (profile), 16 May 2006 @ 11:41am

Past Experience

It should be a simple matter to sue people who refuse to sit through the ads and lobby Congress for stronger penalties for people who use technological means to strip ads from the content.
MjM
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Anonymous Coward, 16 May 2006 @ 11:51am

I only watch commericals and fast forward through the shows
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Anonymous Coward, 16 May 2006 @ 12:04pm

Simple then - consumer's don't want to watch a bunch of commercials - cut the commercials by a multiple of 10 - then jack the price up for a spot by a multiple of 10.

Advertisers should be careful for what they ask for... hehe
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Some IT Bastard, 16 May 2006 @ 12:45pm

I've Got it!
Can someone say, "product placement"?

It's easy to have a pepsi on a counter, or some actor driving a volvo. Make the Sprint logo on some characters cell phone visible, etc.

Less commercials, or better ones. I am one who believes I could easily get a job creating commercials. It seems some moron is pitching a crappy idea that a bunch of executives seem to think is a good one.

Take for example, the Super Bowl, most people look forward to those.
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- Anonymous Coward, 16 May 2006 @ 12:51pm
  
  Re: I've Got it!
  The superbowl is a great example however there is also a major flaw to that... it is the one time a year many compnay will create a new commercial.
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Bob, 16 May 2006 @ 1:04pm

DVR Data
How does a company know if I've scanned through a commercial break on my DVR? Does the cable company monitor this? I realize that VOD service knows when I pause, play, rewind. But how can Cox know if a show I have recorded is being played at all? The show is stored locally, accessed locally, and scanned locally. Are they watching me toggle between watching my LOST reruns or the Latest Jeopardy offering?
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eb, 17 May 2006 @ 8:05am

This is all ridiculous
How the heck do the advertisers know who watches their commercials anyway? Until they insist on some kind of physical contact between some part of our anatomy and the chair that faces the TV and they disable the mute function, there are going to be a respectable number of people who just refuse to pay any attention to commercials.
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Nobody you Know, 17 May 2006 @ 11:13am

Reverse That
Since a recorded show can be viewed over and over again, the Networks should charge the advertisers more since over time there is a greater chance of having a larger audience for the commercial, even if you take 'skipping' into account, since over several replays some commercials will not be skipped.
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