In 1981, MTV’s first music video was The Buggles’ “Video Killed The Radio Star”. The title of that song could be adapted to ask a more modern question. Is the DVR killing television advertising? Also, can brands successfully use television advertising in the era of the DVR?
I strongly believe that the DVR is not the death knell for TV advertising. Some studies have shown minimal impact. Nevertheless, that is not an excuse to pretend we are living in 1981. Those using television to advertise must take technological advances into consideration when devising plans for using video to promote their brands.
The DVR is not an entirely new paradigm. Rather, it is the evolution of pre-existing concepts. People who want to avoid television commercials will avoid them with or without DVRs. Without a DVR, a person that avoids commercials can mute a program, go to the bathroom during commercial breaks, change the channel to another channel not in commercial, or prepare a meal or snack. Additionally, people have had the ability to record TV shows and watch them at their convenience since circa the late 1970s. A 2001 episode of “That 70s Show” pokes fun at the early TV recording technology. Minutes 4:29-5:38, 8:52-9:45, 16:15-17:35 contain dialogues about early TV recording. However, programming a VCR to record live TV was far more difficult for most people than the DVR. This has made the DVR a bigger force to be reckoned with.
The DVR has grown tremendously in the last 5 years. There are varying estimates regarding what percentage of households own DVRs. One estimate from March 2010 states that 35% of households have a DVR. With technology, adoption can increase quickly and estimates lose usefulness. In November 2010, an estimate of 35-40% households having DVRs would be reasonable. In 2006, the estimate for DVR penetration would have been somewhere around 10%.
Even with increased DVR ownership, the majority of television is still watched live. Also, certain types of programming are more conducive to live viewing. For example, sports games tend to attract more of a live audience and less of a DVR audience than other types of programming. With sports, one can easily find out scores in progress or final scores of a game. Highlights of a game are readily available. These realities don’t necessarily exist for dramas, reality shows or scripted comedies, making these types of programming more conducive to time shifting. For brands that need live views of ads for their campaigns to be effective, advertising during sports games may make sense. The key question that brands would need to consider in this scenario would be type of viewers. Does the target market of this ad campaign watch sporting events?
When a program is time shifted for convenience, that doesn’t necessarily spell doom for advertisers. Two years ago, two professors from Boston College studied the effect of the DVR on viewing habits (here and here). First off, the researchers noticed that many people who time shift watch the commercials. It can’t be assumed that a DVR viewer will skip commercials. They made interesting observations about those that choose to skip commercials. In the research, they learned that when people are fast forwarding through ads on a DVR, they are paying more attention to the screen so as to know when to stop fast forwarding. During the fast forwarding process, our brains can still process brand related information. The study indicated that brand logos need to be in the center of the screen to be effective, as this is where fast forwarding viewers pay attention. There was also a chart included indicating that in the chocolate bar product category, consumer decision making about which brand to buy didn’t substantially differ between those who watched chocolate bar ads fast forwarded and at regular speed. The Wired article linked above also notes that networks and brand advertisers are collaborating on means to slow down fast forwarders. According to the article, FOX’s “Bones” is using a tactic where characters from the show are appearing during the middle of commercial breaks.
It is vital to point out that the DVR is not the sole means of time shifting program viewing. Hulu.com is another significant means of doing so. Instead of using a DVR, viewers can visit Hulu.com to watch many of their favorite programs. Also, some of the TV networks themselves enable you to watch their programs when you want on their websites. Bravo and CBS are examples of networks that do this.
With both Hulu and network websites, one is not able to fast forward through breaks. However, breaks are typically shorter. On CBS.com, if one watches “Two and a Half Men”, it will take approximately 23 minutes to watch an episode including commercials. Watching “Two and a Half Men” live on Monday nights would take 30 minutes. For many people, saving those 7 minutes is important. Brands can benefit from utilizing the non skippable ad space on sites like Hulu and network websites.
There is also another way for brands to successfully navigate the digital age. That is through exceptional creative work in their video ads. This is easier said than done. When a brand creates exceptional content, it can easily go viral online. YouTube is the place to post and share videos. Positive word of mouth on social media sites like Facebook and Twitter can drive traffic to YouTube videos and help a brand’s message spread rapidly. Social media gives brands unprecedented abilities to create brand awareness and positive brand beliefs that will induce purchase. Exceptional creative work placed on TV can easily be supplemented in the social media space, raising the possibility for enhanced ROI on advertising spending.
DVR is not going to destroy television advertising. The effect of the DVR is not as drastic as some believe. Even in DVR households, TV is still watched live in the majority of cases. Certain types of programming are less conducive to time shifting and certain individual programs have audiences that do not time shift. Social science has shown that branding messages can resonate even during the fast forwarding process. Exceptional creative work that is entertaining and induces purchase can create demand for viewing ads in the digital space. The video ad will remain a significant part of the product promotion mix for the foreseeable future.