On Tivo and Advertising…

There’s an article up at BusinessWeek about how Tivo is now tracking (in an aggregate, non-personally identifiable way) what commercials people watch, and the results are pretty disheartening for advertisers. Tivo allows you to fast forward through commercials or skip 30 seconds into the future at the touch of a button. And guess what: people are doing it.
The number of people watching commercials is pretty low, which I’m sure that networks will blame on the fact that the Tivo lets you skip commercials in the first place. There are some indications that commercials are watched, even with the ability to skip them. After the Super Bowl Tivo Inc. flexes its nuts by announcing what the most watched (and rewatched) commercial was, clearly an indication that some commercials are watched. But the Super Bowl is an outlier – unlike most Tivo viewing it usually watched “live” which means there’s no way to skip the commercials.
Tivo users are not unique in their disinterest for commercials. For years the mute button and the bathroom have been utilized to skip commercials, or at least put them out of our attention. What is unique about this is that Tivo can know exactly what commercials aren’t watched, and this scares the shit out of the networks.
In ancient times, advertisers figured that if a show had 2 million viewers then their ad had 2 million viewers. The networks were happy to sell ad space with this assumption, and television flourished at the hands (and pockets) of the advertiser. It wasn’t even that new business model for the industry; at the birth of television newspapers had been offsetting costs on advertisers for over a century. What’s new is hard data.
Tivo’s numbers shine like the sun burning away the fog of advertising science and they scare the shit out of people who sell ads. Jamie Kellner, the CEO of Turner, feels so threatened by commercial skipping that he accused commercial skippers of theft. What then of the muters, the bathroom breakers, the sandwich makers? “Your contract with the network when you get the show is you’re going to watch the spots. Otherwise you couldn’t get the show on an ad-supported basis.”
Until they install a device in the television that monitors your brainwaves to make sure you’re really paying attention, and not thinking about whether that belch tasted more like breakfast or lunch, the total numbers will still be soft. Tivo is a growing company with a solid product that’s being imitated all over, which means that the people these numbers represent will keep growing. So what happens when advertisers realize that no one is paying attention?
Ironically, the “old media” can look at the history of the Internet to see how it might play out. When the dotcom (a word so ingrained in our culture by now that my spell checker accepts it without problem) era was inflating that bubble, getting eyeballs was on the forefront of everyone’s business plan. Give away the content, sell things below cost, do whatever it takes to get people on your site. How did the sites plan to pay for everything once the VC money dried up? Advertising.
If advertising was so great, why did the money dry up? There are a number of reasons – the abundance of sites on the Internet with which to advertise or the VC cash inflating a bubble that burst, spreading the money in the wind – but advertising is certainly not paying out what it used to. Any webmaster (I thought that was an awkward term until I heard “blog”) today knows that impressions don’t pay the bills, click-throughs do. Why? Suddenly advertisers had cold, hard numbers saying explicitly how effective their advertising was, and they couldn’t justify a 1% return on investment.
Now the same numbers are coming to television, and if the advertisers don’t like them we could see the same dotcom crash come to the vast landscape of television. Can advertisers really justify airing a commercial that no one watches? Already there’s talk about commercial skipping devices leading to more sponsorship and product placement, which will lead more to fuzzier numbers than click-throughs. Is that better though? Are we better off receiving gifts from advertisers who don’t realize we have absolutely no attention span left for them? We’re a nation of girls at a bar called Television accepting drinks from advertising guys we have no interest in, and someone’s about to tell the advertisers that we’re out of their league.
What do you think will happen?

One thought on “On Tivo and Advertising…

  1. I have the Tivo unit and i think it’s one of the best things i ever bought. I hate watching comercials over and over again. They drive me nuts! Plus the comercials today are so dumb… I have a 40hr hard drive and boy do i load it up with shows too, so i can skip every comercial i can! It helps me keep my sanity. That remote is in hand the whole time i watch Tivo. I never watch regular tv anymore. Thanks to Tivo i watch what i want when i want. To be honest. Most of the comercials that come on don’t intrest me in the least. Why should i be made to watch them! Every where you go today, someone is trying to stick something in your face to buy. All i can say is thanks Tivo for helping me keep my sanity. I call Tivo my computer for the telivision because realy, thats what it is. It enhances my cable to get more out of it.

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