Category Archives: time-shifting

Article: The New Reality of TV Advertising

I have the cover story in the latest issue of The Advertiser magazine. The topic is interactive TV, specifically how a bunch of different players are hoping to make TV a lot more “web-like” in both functionality and measurability. The nut graf(s):

After years of fits and starts trying to turn the concept of interactive TV into a broadly based reality, a collection of service providers, technology companies, agencies, and marketers finally seems to be making some legitimate headway in transforming TV into a more addressable, more targetable, and more measurable advertising medium.

Sure, we’ve seen this dance before. For years, we’ve been hearing promises of two-way engagement, better buying and measurement systems, and addressable ads for TV viewers. But real milestones have been elusive in an industry known more for inertia than innovation.

Something feels different now, however.

Execs from Google, Unilever, Lenovo, Canoe Ventures and others weighed in on the topic.

The Decline and (Rapidly Approaching) Fall of the TV Empire

A new study from a research firm called Grunwald Associates indicates a significant shift in the media habits of children:

Sixty-four percent of kids go online while watching television, and nearly half of U.S. teens (49 percent) report that they do so frequently — anywhere from three times a week to several times a day. … The study reveals that 73 percent of TV-online multitasking kids are engaged in “active multitasking,” defined by Grunwald Associates as content in one medium influencing concurrent behavior in another. This trend represents a 33 percent increase in active multitasking since 2002. While kids are using more media, their attention primarily and overwhelmingly is focused on their online activities.

I don’t need stats to tell me about the decline of traditional TV among tomorrow’s generation; I see it daily in my own house, as my 17-year-old watches downloaded episodes of Degrassi on her iPod, as my 12-year-old focuses far more time IM’ing or fast-forwarding through DVR’d Celtic games than watching live TV, and as my 9-year-old runs around the house making videos and begging me to let him post something on YouTube, or as he surfs for PS2 cheats online, half-listening as Jimmy Neutron drones in the background.   

Sure, there are a few seminal TV events that the family feels obligated to watch live, like the Super Bowl or, to a lesser extent, American Idol. But today’s kids are edging – no, rushing – away from the passive TV experience. I do not envy network execs.

Upfront and Outdated

Honestly, I don’t understand the ongoing existence of the annual mating dance between the TV networks and advertisers known as the upfront. As far as I can figure, the upfront is a great excuse for TV execs and media buyers to throw lavish parties as they broker advertising to fund their upcoming fall TV lineups. There’s big money involved – around $9 billion was spent during last year’s upfront – but the process is anachronistic on so many levels.

In the old days, the ritual probably made sense: TV was the dominant advertising medium, the big three networks controlled the airwaves, and prime time shows followed an orderly schedule: premieres in the fall, reruns in the summer. Advertisers locked up the prime spots on the best shows in advance, paying premiums for the most-watched shows. It wasn’t ideal, but everyone grudgingly accepted the process. And the networks raked in big bucks.

Then cable came along, and the Internet, and TiVo, forever altering the universe around broadcast TV. Broadcast viewership continues to shrink. New shows debut on cable channels throughout the year, not just in the fall. DVRs have thrown ratings systems designed for live viewership for a loop. Internet video – and the ad model around it – is catching fire.

The changes have led to much discussion about the composition and even the relevance of the upfront. Why pay in May for shows that may last for a month in September? How does time-shifting and delayed viewing figure into the ratings (and the cost of the advertising spots)? What role does online play in the upfront? I’ve never bought or sold a TV spot, so I surely don’t have the answers to any of these questions. But as an outside observer, the upfront certainly strikes me as a concept that has outlived its usefulness. There has to be a better way.

How To Kill Video on Demand, Chapter 1

Stupid media tricks: MediaPost reports that ABC and ESPN have struck a deal with Cox in which the cable provider will disable the fast-forward feature for some of the on-demand content it offers from the two Disney properties.  That means Cox cable subscribers won’t be able to skip commercials and zoom through the programs they watch via Cox’s VOD (video on demand) service. (The agreement does not apply to programs that subscribers record on their own using Cox’s DVR box.)

This a classic horse-has-left-the-barn overreaction to the media companies’ ad-skipping angst. There are two main benefits of VOD: convenience (you can watch anytime you want) and control (you can pause, skip and rewind). Removing one of those elements will absolutely kill VOD. Disabling features that customers have already embraced is a surefire way to make them hate you.

The Shift Is On

I finally got a DVR cable box last week. Since I refused to buy any additional services from Adelphia, I waited until Comcast took over to take the plunge into time-shifting. Watching Sunday night’s football game on Monday morning took less than an hour.  No more TV timeouts! No more Subway ads!

I’m not alone. MediaPost reports today that nearly one-fourth of 18-to-49-year-old viewers are watching “The Office” on DVR.  That’s an amazing development involving such a key segment of the TV audience. The shift to delayed viewing raises all kinds of issues for advertisers who continue to shell out pretty significant coin for broadcast spots – Advertising Age says a 30-second spot on The Office goes for $219,000. The tug of war between the networks and advertisers over the next round of media buys will involve whether DVR viewers are zipping past commercials and how that much they can get buyers to pay for DVR ratings vs. live viewership.

They had best figure it out soon – the tipping point is near.