TiVo and the Future of Advertising - The revolution is coming, slowly but surely
Many years ago, well before the general public had ever heard of TiVo, there was a cover story in The New York Times Magazine about how TiVo and other similar technologies were going to allow consumers to "time-shift" their tv-watching, and in doing so completely revolutionize the advertising industry.
Much to my surprise, eight years later, the effects of TiVo and DVRs are only now just penetrating the advertising world, and there’s a lot of turmoil in the industry as the old precepts of television advertising are giving way. Yesterday I read this article about a study in the U.K., which shows that 79% of people who have the technology that gives them ability to skip through commercials actually do so. Presumably they do this manually, fast-forwarding through each commercial break. Now, I have a friend who is a bit of a self-taught programmer, and he has rigged his computer such that he can watch television on it and it automatically skips all the commercials. I figure won’t be long before this kind of technology becomes widespread.
The point of all this is that we’re still just seeing the very beginning of the revolution that’s coming to consumer advertising. Now that there’s research that shows that consumers will avoid the commercials that have been thrust in front them, advertisers are going to be forced to seek other ways to reach them.
My bet is that in the next few years, we’ll be reading headlines talking about a huge amount of transplanted advertising — moving from the relatively mass market of television, to the much more targeted arena of the Web. It’s already happening, but I think the press and the stock market have both greatly underestimated what’s coming. In the last week or so, Google’s stock price dipped over fears of lower advertising revenue. That’s very short-term thinking.
I think we’re just seeing the tip of the iceberg. In another few years, advertising will be increasingly targeted, and Web advertising will become the dominant form of advertising to consumers, and will be supported by traditional media, rather than the other way around.
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I remembered in 1990 when i lived in Belgium, i was impressed that TV stations put a watermark station logo in the lower right-hand corner of the screen. I enjoyed that it informed me what station i was watching, and i only found it intrusive the first couple of times i saw it. I was surprised that the US market didn’t do that.
Of course, the US eventually caught up, and put the logo on the screen. First we just saw NBC or ABC or HBO. Then it turned into ABC + an some call to action to watch an upcoming show. The size grew (and continues to grow). Now we see live animation popping up…most of it for the station’s upcomng shows…in one or two cases i saw advertising for a consumer product (I believe toothpaste). Sometimes the ad is displayed for a few seconds. Sometimes minutes. Sometimes it lasts for the entire whole show.
I believe we’re going to see increasing amounts of overt advertising like this directly on programming content. I believe that all “free” TV will become an on-going banner ad of some sort, which will probably drive up the demand for premium TV such as HBO and on-demand/pay-per-view channels. I do believe the days of pure programming content (i.e. sans advertising directly on or in the prgoramming itself) is now over.
Gene,
Just thought you might be interested in an NPR Science Friday show that I just heard about new studies in persuasive technology – researchers from MIT and Stanford are interviewed about where the technology is taking us with implications about advertising: http://www.sciencefriday.com/program/archives/200803075
I think that something else to think about is the use of the programming itself to sell products. “The perfectly held can of b**r displaying the label unobstructed” or “the laptop with the recognizable logo facing the camera just right” will become all the more prevalent. Major motion pictures are already becoming the two hour advertisements for the video game as that’s were the real money is.