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Drew McLellan Drew McLellan   Bio
08.28.07

Will We Spend Less or Differently on TV Advertising?

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The IBM Institute for Business Value recently released the results of their survey of more than 2,400 households in the United States, the United Kingdom, Germany, Japan and Australia. The survey covered global usage and adoption of new multimedia devices and media and entertainment consumption on PCs, mobile phones, portable media players and more.

The results will be part of a report called "The End of Advertising As We Know It" scheduled for release this fall. You can download the full survey results here. And a summary version is available here.

There were many fascinating findings but the one that really caught my eye was focused on the impact of owning a DVR. While general statistics are showing TV consumption down, apparently owning a DVR holds off that trend.

ibm-media-entertainment-dvr-tv-viewing.jpg

91% of DVR owners reported watching as much or more television than they used to. In the US, DVR owners report watching more than 50% of television programming on replay. Not only that, but 33% report watching more TV as result of their DVR.

We all know that TV advertising is changing. But that doesn't necessarily mean the dollars will change. Advertisers might just buy something different. So here's what I'm left wondering:

How do you think this graph will change in 5 years?

2007-may-ad-spending-share-by-medium-nielsen-netratings-adacross.gif

Will TV spending drop? Increase? And what will they be spending their TV advertising money on?



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Comments

I think DVRs will create a slight overall increase in TV viewing.

For many people, it's not so much about watching specifi9c programs, but about just watching TV as something to do. DVRs will enable people to record shows they like, to watch at their convenience, or when there's nothing on that they like. So instead of turning the TV off, they'll watch a show they've recorded. Result: more hours of TV viewing time.

The way we happen to use the DVR at home is to make "appointment viewing" adhere to our schedule. Now, instead of making an effort to be home to watch a certain show, we just DVR it and watch it whenever we like -- later that night, a day later, a few weeks later. Of course, we zip past the ads with the DVR.

Posted by: David Reich "my 2 cents" | 08.28.07

David,

You watch TV the way we do. It's incredibly freeing not to be tied to a TV schedule.

But...from a professional point of view, I think the interesting question is how will this change how advertising and programming are woven together?

Will it further blur the line between the two? How does it impact you, from a PR point of view?

Drew

Posted by: Drew McLellan | 08.29.07

I'm not an ad man, so I can't give you an experty answer, other than to say we all know this is a major challenge advertisers now face. They've tried product placement with varying degrees of success. The nets are offering some options to the standard commercial pod, to try to keep viewers from switching or zipping. Possibly an answer is making commercials more watchable. But after you've seen a spot a few times, what are the chances you'll continue to sit through it if you have the ability to zip or switch?

From a p.r. point of view, in many ways it's still business as usual for getting exposure for clients on the tube. There are still the news and magazine shows, and tons of talk show opportunities. The key is, for p.r. it's all content and not ads, so more people will watch rather than zip. Of course, is the subject just isn't of interest to them, they'll switch. But those may not be your targets anyway, if they're switching.

Posted by: David Reich "my 2 cents" | 08.29.07

Product Placement is an obvious solution. But as tv becomes commoditized by the web we are going to see video advertising on the web (a la Google, Blinxx) soar exponentially leaving the traditional model in the dust.

At least the old skool advertisers still have sports, eh? No one wants to watch sports on a DVR.

Posted by: Andy Brudtkuhl | 08.29.07

In my world, advertising on the web for doctors and lawyers, I most notably see advertising dollars switching from yellow page ads to the web. Some are see better ROI pound-for-pound with the web than TV, and they don't have to spend as much. Interesting that yellow page ads aren't on that pie chart...

Posted by: Jonathan Fashbaugh | 08.30.07

I was just thinking about this the other day. Is it called product placing when they have a character in a TV show using an ipod, drinking a Coke or wearing Nikes? I think that might be the wave of the future... more subtle ads placed within the TV shows we are watching.

Posted by: Sally Kuhlman | 09.01.07

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