PVRs will not eliminate TV advertising’s 30-second spot, experts say

The popularity of personal video recorders (PVRs) and the power of television viewers to fast-forward through ads is leading to new advertising strategies. Although experts say the PVR won’t kill the 30-second spot, it may make conventional advertising more sophisticated. PVR devices allow viewers to record television content and play it back with the option of fast-forwarding through commercials, and advertisers are modifying their ads to ensure audience impact, even when sped up. For example, advertisers are using fewer cuts, running larger, more static images, and maintaining consistent branding, Duncan Stewart, director of research for technology, media and telecom at Deloitte Canada, said in an interview. “Advertisers are able to modify their ads so that they are still visible and still have ad impact. The ad is not dead,” he said. “If you’re putting a tagline on , you hold the graphic up for longer so that even at eight times, or 16 times , it’s up long enough for the message to get across.” John Boland, vice-president of advertising systems at U.S. communications technology company Arris, said companies are also looking at ways to use PVR devices to store and forward targeted ads directly to viewers. “A lot of folks thought the PVR would spell the end of commercials as we know it, but they are trying to turn that model on its head by using the PVR as a vehicle with which to deliver the ads,” Boland said in an interview. He said new technologies can deliver “addressable,” or targeted ads, directly to viewers. “They store and forward addressable ads in the set-top box, and when a break comes up, the PVR sends an ad that is more relevant and targeted demographically and geographically,” he said. But a move in this direction will be largely dependent on the privacy rules that often govern access to demographic information. “Technology isn’t going to be the gating factor. It will be consumer acceptance and regulations,” Boland said. Stewart said that in many ways PVR playback can now work to an advertiser’s advantage. “If I am skipping the ads, I am holding down the little button. I have to pay attention to the screen so I know when the commercials are over. At some level, you are paying more attention than you might be if you were just walking away during a normal commercial break,” Stewart said. He said the PVR has also raised demand for the final spot in a commercial break. When viewers skip over the ads, they often go too far, rewind, and watch all or part of the final ad over again. “The impact of that final commercial spot is even higher in an ad-skipping world than it is in the average world of broadcast commercials,” he said. Stewart said he predicts that 2011 will be a tipping point for PVR penetration, with up to 40 per cent of Canadian households becoming equipped with the device by the end of the year. But he said the predicted jump should not worry advertisers because the majority of people who own PVRs continue to watch most programming in linear mode. “Given most PVR owners will continue to watch the majority of their television live (known as ‘appointment to watch’ television), TV advertising will be almost entirely unaffected in these markets,” Deloitte’s 2011 prediction report says. Theresa Treutler, president and CEO of the Television Bureau of Canada (TVB), said the organization predicts lower PVR adoption than Deloitte. “As of December 2010, PVR penetration is 23 per cent of households,” Treutler said, adding that the annual trend in PVR adoption has been slow but steady. According to the TVB’s 2010 study on PVR use, conducted by BBM Analytics, penetration will be approximately 26 per cent by the end of 2011. The TVB says that, according to its statistics, there remains high viewership and consumer awareness of commercials in Canada. Treutler added that almost all weekly television viewing is in real-time. BBM’s study says that adults aged 18 and over watch an average of 29.1 hours of television weekly. Of that, 28.2 hours, or 96.9 per cent, are spent watching real-time television, compared to 0.91 hours, or four per cent, on playback viewing. The study also reported that 45.4 per cent of viewers aged 18 and over said that, while fast-forwarding through commercials with their PVRs, they will stop to watch commercials that are of interest to them. Treutler said this shows that when people are fast-forwarding, they still gain a very high awareness of the commercials. Derek Baine, a senior analyst at U.S. firm SNL Kagan, said that in the United States advertisers are starting to refuse to pay for ads that are skipped. “Nielsen is now tracking who is watching the commercials, while historically, the ratings were just based on whether the TV was turned on or off.” Baine said the move has caused a battle between broadcasters and advertisers because the broadcasters maintained that, even before the PVR, people weren’t always watching all ads during a break. “From a programmer’s viewpoint, it was already built in that some people weren’t watching. But they ended up caving , and ads are now sold by the commercial-viewing unit.” Baine said he predicts the model will eventually move to Canada. He also predicted a shift towards advertisers’ use of set-top box data, which provides a more robust set of data than Nielsen and allows for targeted advertising opportunities. “We are going to see a migration to a sort of a system where we pool that data and we have the numbers of who’s watching what, when,” Baine said. Bob Reaume, vice-president of policy and research for the Association of Canadian Advertisers, acknowledged that PVR playback has been a challenge for advertisers, who have had to “put in some creative thought” into making ads “unskipable.” He said new PVR advertising strategies provide a coping mechanism, not a satisfactory solution. “When you are paying substantial amounts of money for advertising, you don’t want viewers to just catch a glimpse of a logo while they fast-forward,” he said. “If commercials are fast-forwarded, it’s really not considered value-for-money by the advertiser.” Reaume said product placement and branded entertainment are burgeoning platforms where advertisers can present advertising without concern about viewers skipping over it. Advertisers are also migrating towards content that is less likely to be watched in playback mode, such as news, sports, live events and awards shows, he said. asmith@thewirereport.ca

PVRs will not eliminate TV advertising’s 30-second spot, experts say

Broadcast | February 28, 2011

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