By Jamie Turner with The 60 Second Marketer
In this article, you will learn:
1. That TiVo is effectively changing the way we watch TV (through time-shifting) and the way we interact with commercials (by fast-forwarding through them);
2. That TiVo has introduced a new partnership with Amazon that links consumers to products available online;
3. That the sophisticated marketer is exploring ways to use TV sets as direct response sales devices in addition to marketing communications devices.
TiVo is out to change the world. Everybody knows that. But the question remains, have they really been able to change television and commercial viewing habits?
The short answer is, yes, the majority of those who own one of the 3 million+ TiVos use them to skip television commercials as much as they use them to time-shift their viewing habits. But does that mean the end of the 30 second commercial? Or does it simply mean that TiVo will evolve into something bigger and better than it already is?
According to Brad Adgate, SVP Research at Horizon Media, the 30 second commercial is safe, for now. "Based upon the recently concluded television upfront, which was stronger than anticipated, the thirty-second commercial appears safe for the foreseeable future. The emergence of DVR's has resulted in the change in currency from live programming to an overall average of commercial ratings within each program (which are still predominantly thirty-second spots), rather than the demise of thirty-second commercials."
In a nutshell, Mr. Adgate and others believe that, so far, TiVo has simply forced the networks to change the way they track the viewership of TV shows. He continues by saying, "I think the shift away from thirty-second commercials will start first with online video, which are already of varying lengths and their effectiveness can be measured more easily and usage is growing rapidly. Second-by-second data from digital set top boxes and DVR's are more likely to have an impact in measuring the effectiveness of varying commercial lengths (finding out who is surfing and zapping). The information however, may have more to do with such variables as the creative execution, pod position/length and how interested the viewer is in the ad message instead of just commercial length."
TiVo recently announced a partnership with Amazon that will continue to morph the device into a tool that links consumers to the products they see on television. TiVo users will see links to buy products like CDs, DVDs and books that guests are promoting on talk shows. The move highlights TiVo's attempt to shift from being a creator of DVRs to being an advertising innovator.
The evolution of TiVo is important -- for all the hype surrounding the device, the company still loses millions of dollars each year. Will this new partnership with Amazon change the landscape for the company? Probably.
"Just a few years ago, we were viewed with great paranoia as the disruptor," said Thomas Rogers, Chief Executive of TiVo in a recent International Herald Tribune article. "Our goal now is to work with the media industry to come up with ways to resist the downward pressure of less advertising viewing and create a way for advertising on TV to become more effective, more engaging and closer to the sale."
"The majority of commercials in home will be fast-forwarded through," continued Rogers. "It is critical that there be a form of advertising and a transactional solution that underpins the DVR, or the economics of television are going to be substantially undermined.
What does this mean for marketers?