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.