WORLD: Digital video recorder a threat to TV ads

Over half of U.S. DVR owners fast forward through prime-time television commercials -- which means advertisers and TV stations need to adjust

Straits Times
Tuesday, June 5, 2007

By Ng Sook Zhen

Owning a digital video recorder (DVR) may be a blessing for many consumers but new United States figures show that these devices are more of a curse to advertisers and TV stations.

The research by Nielsen Media Research has confirmed what many have long suspected -- that DVR owners simply fast forward through ads when they watch recorded TV shows.

A total of 1,750 US households with DVRs were surveyed in the first week of last month, Associated Press reported.

Although viewership of a typical prime-time show shot up by 73 per cent, when people watching it on a DVR within three days were included, the number watching the ads rose by a much smaller 32 per cent.

This means that more than half of the DVR viewers surveyed had hit the fast-forward button when commercials came on the screen

"I'm not surprised at all," said Mr Gan Boon Guan, chief executive of Starcom, a leading media agency in Singapore. "If you watch DVRs, obviously you have the power to fast forward and save time."

However, the trend has yet to become worrying to ad agencies in Singapore.

"Right now, the figure is not big, but it will continue to grow," said Mr Tay Guan Hin, regional executive creative director of media agency JWT.

"Yet, this is something we have been talking about for many years. It's not that big here yet, but when it grows, we definitely have to worry about it."

Mr Tay concurred with that view: "Everyone saw it coming a long time ago. It's not here yet, but if it does come, clients will see it differently, positively."

And industry sources say advertisers have a "back-up plan."

"Now, agencies are looking at brand content, like branding campaigns, sponsorship -- not just that 30 seconds of airtime," said Mr Gan.

Indeed, with the rise of new media such as bluetooth advertising and online advertising, ads are slowly moving away from traditional media.

At JWT, for instance, Mr Tay estimated that about half of the work done is for non-traditional media advertisements. "In Japan, mobile and digital media make up almost 70 per cent," he said.

"As technology becomes better, there will be more touch points for media to be placed," he added.

"I don't think ad agencies will lose out, but TV companies may lose out if they don't find a new way of finding revenue."

Date Posted: 6/5/2007