England’s late prime minister Benjamin Disraeli’s most memorable quote pertained to his definition of lies, which he broke down into three categories: "Lies, damn lies and statistics."
In that vein, consider this tale of two studies. Based on a phone survey of more than 900 personal digital video recorder (PVR) users, CNW Marketing Research found that people watching recorded TV shows on PVRs bypass commercials 72 percent of the time. According to CNW, the 72 percent spot rejection rate far exceeds that of viewers who fast-forward through commercials on videotape (15.6 percent of the time) and those who ignore ads on regular broadcast TV (44.6 percent of the time). For the latter, "ignoring" was defined by researchers as taking a bathroom break, leaving the room to get a snack or engaging in conversation. CNW surveyed 1,159 VCR users, and 8,146 viewers of broadcast TV.
However, during a panel discussion at last week’s BroadbandPlus trade show (formerly the Western Cable Show) in Anaheim, Calif., Comcast Cable Advertising president Charlie Thurston cited research with dramatically different findings. According to Thurston, only 23 percent of PVR users don’t watch ads—and 79 percent said they would be willing to look at spots if they were "interesting and relevant."
So much for empirical data. Whichever study you believe—or if you instead conjecture that the truth lies somewhere between the two conclusions—clearly a re-think is required of admakers as new media, such as the PVR, gain market penetration.
BroadbandPlus session panelist Laurie Coots, chief marketing officer of TBWA/Worldwide, suggested that advertisers could sponsor content designed for PVR households—for example, they could package the year’s Emmy-nominated sitcom episodes and deliver them directly to hard drives.
Panelist Michael Collette, CEO of Ucentric Systems, a software maker that sends targeted ads to DVR hard drives, said that there are tangible marketing opportunities in these new-media households. Ucentric distributes ads that can be interactive and yield measurable audiences, he related, noting that his company is even able to deliver spots to specific rooms in those households with multiple PVRs. He quipped that if a company sells dentures, Ucentric can connect it with millions of toothless people.
Thurston predicted that in 2005, assorted versions of commercials will be tailor-made for different consumers and distributed to the appropriate PVR users. For example, a campaign promoting a vacation in the Bahamas could have one spot showcasing recreational sports like golfing and surfing, another focusing on opportunities for singles to meet people and a third stressing the islands’ virtues as a family getaway destination.
While the marketplace penetration of PVRs is nominal at present (they’re found in about 1.5 percent of U.S. households), the technology’s impact on the advertising industry figures to be profound as the number of PVR users grows significantly in the years ahead. The Carmel Group, a media consulting and research firm, projects that by the end of ’05, U.S. cable operators will have an estimated 4.8 million PVR-based users, up from 300,000 this year. Also by the end of ’05, Direct Broadcast Satellite providers are projected to have 4.9 million PVR-based users, an increase from 1 million this year.
The Carmel Group estimates that in ’08, there will be 28.6 million PVR users in the U.S., which will account for about 25 percent of the country’s households.
