Will increased DVR use cut into TV advertising revenue?

 Ted Harbert, the chairman of NBC, expressed his distaste over using DVRs to skip commercials by stating, "This is an insult to our joint investment in programming, and I'm against it." This seems like a shortsighted view of the changing nature of broadcast media. Instead of railing against the advent and use of new technology broadcasters and advertisers should look at all the new and exciting ways they can use this technology to deliver their sales pitch for products. What gives a business longevity is adaptation to a changing consumer tastes and technological environment. In short adapt and survive.

One major factor that makes DVRs attractive to the viewing public is the ability to individualize the viewing experience. A viewer may not fall into the normal demographics that research has shown would most likely watch a certain show at a certain time. For example, a person who works during the day may be interested in daytime TV shows, but doesn't have the opportunity to watch their favorite show during its normal broadcast.

The point to be stressed is that broadcasters still have viewers for their popular shows through the use of DVRs and other delivery methods such as streamed internet video and smart TVs. The goal is to get the advertising for their clients to the viewing public.

Trends in internet usage and content show that individualized content is what the consumer wants. Google has capitalized on this fact by leveraging technology to customize ads to the users content. The question is: can advertisers get individualized product messages across in a non-interactive media such as broadcast television? I believe that the answer is yes. If one examines other static media such as print media, I believe the attainment of both goals is already available.

We have all flipped through magazines and, although we seldom stop and read each advertisement, we see them and they do send very strong messages. These ads are scattered among the content, and even though they may only be glanced for a second, their visual messages are highly motivating to the consumer. Copies of Vogue or Cosmopolitan are hugely successful at getting advertisers messages to the consuming public. Format and delivery system are where old and new advertising concepts diverge.

Currently, broadcast media uses the commercial break which is the equivalent of the print media’s back-to-back full page ad. This is a very easy format to ignore. With print media, one can simply tear out the page and not lose any of the content the reader purchased. The same practice is happening with broadcast media and DVRs- the viewers are ripping out whole blocks of advertisements by skipping past them.

A more difficult task involves skipping the quarter page ad or the endorsement that is nested in the content. Product placement within programming would have the same effect and could be used to replace the use of commercial breaks. This is already used in some motion pictures and programs. For instance, Tony Soprano in the “Sopranos” drove a Chevy Suburban, and Dana Scully in the “X-Files” drove an Avalon. One of the great trivia questions of all times is, what car did James Bond drive? The answer depends on which Bond or which movie. The point is these products associations are forever in the minds and culture of the consuming public.

A draw back involves contriving the storyline of programs to place adds. It would be hard for the viewer to believe that John Munch from “Law and Order; SVU” would consume a product from a big corporate brand like Starbucks, but might be seen making coffee with a lesser known free trade brand. However, Olivia from the same show may be a very believable consumer of Starbucks coffee. Any product placement has to be believable to the program and character shown using the product or viewers will lose interest in the program. The goal wouldn't be to have a few big name products but to incorporate a multitude of everyday products into hundreds of programs.

It is true that not all programming lends it's content and format to product placement. That is where the “Oprah Effect” could be used. On air endorsements by celebrities such as Dr. Oz or someone in a reality show saying, “I love Pepsi!”- this all works in the favor of advertisers. Followers of NASCAR don't stop shopping at Home Depot just because they don't like the driver of the Home Depot's car. They see both the Home Depot's and Lowe's logo on competing cars for hours on end. The reason for liking one driver over another is deeply personal to the viewer. Each offer of a product or service is of equal value to the broadcaster concerning revenue with exclusivity being the dinosaur in the marketers strategy. The goal should not be to have five sponsors to a program by 25 strategically placed within the program. Major sponsors could purchase a floating logo in the title bar at the bottom of the screen.

The possibilities for placing advertisements within programming content are endless, and make obsolete the idea that commercial breaks are the only effective way of reaching the consumer. In the process the broadcaster and advertiser render the DVR's abilities to skip advertising a mute point.