Looks like the DVR didn't kill ad sales

[HDTiVo]

The DVR hasn't killed TV ad sales yet, and never will. The Networks have done well increasing their upfront sales this year at a respectable rate.

Higher prices offset lower numbers because those lower numbers miss many viewers. But the reality that the viewers are still there, compounded by the ability to measure far more accurately the viewership across live and time-shifted makes advertising more valuable. Advertisers can be more confident in what they are really getting and TV networks can extract more value from them in selling ads.

[MickeS]

Yeah, I think the death of the current advertising model will take a while longer...

I guess the advertisers will just have to be smarter. Even though I use the 30 second skip, I often stop at a commercial that catches my eye.

[HDTiVo]

Yeah, I think the death of the current advertising model will take a while longer...

I guess the advertisers will just have to be smarter. Even though I use the 30 second skip, I often stop at a commercial that catches my eye.
While the form of ads may evolve, measurement technology is an offset to avoidance technology.

Even with 30 sec skip I still take about 1 sec between each jump and get some idea what's on...and sometimes go back and watch it. So avoidance is not absolute and in some ways may generate more efficient (ie. focused, etal.) ad viewership in the instances when the ads are viewed.

[HDTiVo]

http://www.latimes.com/business/la-fi-upfront19jun19,1,4227707.story?coll=la-headlines-business&ctrack=1&cset=true

A new system for measuring viewers also prompted advertisers to get in early.

The TV networks bowed this year to advertisers' demands and changed their nearly 50-year-old system for selling commercial time. No longer will the networks calculate their ad rates primarily on the size of the audience for individual programs. Instead, the networks are establishing their rates based on Nielsen Media Research estimates for the number of viewers who actually watch the commercials during the program.

The change in measurement systems was prompted by new technology, in particular the increased use of digital video recorders that allow viewers to fast-forward through the commercials

The networks, however, are offsetting any decline in advertising dollars that result from lower ratings, because for the first time they will be paid for viewers who digitally record a program and watch it later.

Last year advertisers refused to pay for those viewers. But that audience could no longer be ignored, as about 17% of homes with televisions in the U.S. are now equipped with digital recorders. Advertisers will now pay for viewers who watched a show within three days after it was recorded.

Allowing that audience to be counted is likely to bring in additional hundreds of millions of dollars to the networks. The most popular programs tend to have the highest rates of recording and playbacks, so networks with the top shows will benefit the most.

The concession made sense, Schwartz said.

"We're finding that a little more than a third of the people who delayed their viewing ended up watching the commercials," Schwartz said. "And we need to give value to the people who are watching the commercials."

Some network executives said the strong demand for network time could signal weakness in the cable television upfront market, which usually follows the broadcast sales. They said some of the extra money going to broadcast networks was likely to come at the expense of cable channels.

Many of the cable networks have not agreed to use the new system of measuring the audience for commercials. They are afraid the change will lead to substantially lower advertising prices. Not only that, but ad buyers are now more eager to put money on shows that deliver the most "impressions." And those are largely network shows, such as ABC's "Grey's Anatomy" and Fox's "House" and "American Idol."

One top buyer, Initiative's Tim Spengler, pointed out that network executives previously guaranteed advertisers an "equitable rotation" for their advertising spots. But now, he said, networks might be inclined to do business with certain advertisers that have the flashiest and most compelling ads, or give those spots better placement.

"Now, the networks are going to be making money off the ratings for the commercials — which the networks don't make — so it will be interesting to watch how they schedule the commercials," Spengler said. "That could become a real issue for advertisers."

http://www.cnbc.com/id/19351763

The big surprise that Nielsen found, is that commercial viewership fluctuates widely depending on when and how commercials are placed in a program. Longer "pods" (more commercials at once), or just short little commercial snippets, placed at the beginning of the middle of a show--these decisions entirely affect viewership. And this new information is sure to totally transform the way commercials are programmed.

So no, network TV isn't dying-- people are just consuming more entertainment in addition to it.

[HDTiVo]

http://www.adweek.com/aw/magazine/article_display.jsp?vnu_content_id=1003599880

For most shows, however, the commercial ratings in May, even with the live-plus-three data, were smaller than the audiences for the shows themselves. But surprisingly, not by much. Across the five networks, the overall gap was just a little more than 1 percent, according to the Nielsen data. Essentially, the audiences that tuned into ads in playback made up for most of those surfing and skipping ads during live viewing, when the audience shortfall is typically about 5 percent.

research shows that 40-50 percent of network prime-time viewing in DVR homes is time shifted. DVRs are in just 17 percent of U.S. homes currently

Gentner agrees that usage patterns will evolve. "Early adopters tend to use it more," he said. "The habits are probably different at 30 or 40 percent penetration. We'll be keeping a close eye on behavior as it proliferates."

Forrester Research estimates that DVR penetration may reach 50 percent of homes by 2010.

Agencies and networks estimate that over the next year, the number of U.S. households with DVRs will climb to the low- or mid-20-percent range. It's a key projection, because it affects the share estimates that buyers and sellers put on shows in order to calculate program mixes before entering upfront negotiations.

[atmuscarella]

I think I will state the obvious - how many people watch a commercial is irrelevant - what counts is how much the commercial increases sales. I might watch a dog food commercial but the fact I don't have a dog and will never buy any dog food makes it meaningless.

Tivo offers the promise of interactive and individualized commercials the should be able to drive larger increase sales with a much smaller/narrower viewership. This is where the future of add sponsored video is going to be.

Thanks,

[SleepyBob]

I'm thinking the broadcasters will start charging a premium for the first and last commercials in a break (if they don't already), since those are the ones that a DVR user will most likely see at least a part of.

[mattack]

I think I will state the obvious - how many people watch a commercial is irrelevant - what counts is how much the commercial increases sales. I might watch a dog food commercial but the fact I don't have a dog and will never buy any dog food makes it meaningless.

but you *might* have a dog someday, or you might go to the store with someone who has a dog and influence them to get dog food.

I think it's a stretch too, but that's the supposed rationale for a lot of brand marketing.

[oldnacl]

but you *might* have a dog someday, or you might go to the store with someone who has a dog and influence them to get dog food.

I think it's a stretch too, but that's the supposed rationale for a lot of brand marketing.
Many times (and it may be due to advancing age) I find that while I can recount the content of an interesting commercial to a friend, I'm frequently at a loss as to the exact brand/product they were advertising.

[ZeoTiVo]

Many times (and it may be due to advancing age) I find that while I can recount the content of an interesting commercial to a friend, I'm frequently at a loss as to the exact brand/product they were advertising.
well there are target audiences and so forth.


what I get from all this, if you like a show and are watching it within 3 days of broadcast then let the commercials play and do something else. That way the show books some revenues and you can alwasys back up to the show if you do not get right back.

Or maybe just set a show to play while you are not around and then watch it later while skipping the commercials. This stuff is new, guerilla revenue generation(GRG) for your shows can pay off for now. :)

[nhaigh]

The DVR hasn't killed TV ad sales yet, and never will. The Networks have done well increasing their upfront sales this year at a respectable rate.




Yes, I think whats died is Neilsens ability to report audience figures in line with how the market is evolving.

[BruceShultes]

If they really want us to watch commercials, stop showing the exact same one multiple times during the same show.

Of course, they can still force us to watch advertising with the pop-up adds that appear at the bottom of the screen during the show.