June 2009 – Marketing Methods

TiVo Countering Ad Skipping

By Peter Koeppel

TiVo, the company that created ad zapping, is now trying to develop ways to offset this trend. In the last 18 months, interactive TV offerings designed to counter ad skipping by consumers have increased, according to an April 23 article in The New York Times. In addition to TiVo, Cablevision, Cox Communications, Time Warner, Navic Networks, Dish Network and DirecTV are all offering interactive options that cut down on ad skipping and create more engagement with consumers.

A MYRIAD OF CHOICES
Last year, TiVo started offering ads that appear in a text format when a viewer pauses a TV show. The company also offers ads that pop up when a consumer fast-forwards through shows. If consumers choose, they can view a product video, obtain additional information or a coupon. They even have an application where a car manufacturer allows consumers to pick out various colors options.

Cable companies offer a range of interactive options. For example, Cox sells interactive ads that appear on top of commercials in certain markets. Viewers are given the option to access more information about a product or service, utilizing their remote. Cablevision in New York is now offering video-on-demand. Disney is using this format to advertise its amusement parks and the consumer can elect to be called back immediately by a Disney agent.

Delivering ads based on household demographics. Time Warner, in conjunction with Navic, offers advertisers the ability to deliver different ads to households based on the demographics of the household. This technology employs a banner ad on top of the commercial, which enables viewers to use their remote to gain access to more information about an advertiser’s product. This approach allows for customized, more highly targeted ads that have a better chance of engaging the targeted customer. Combining this technology with the tracking and measurement tools available to DRTV advertisers seems like a particularly appealing tactic.

National interactivity is expanding. Currently, both Dish Network and DirecTV are offering national interactive ads. However, most of the interactive cable ad options are being offered only in local markets. A group of the six largest cable companies plan on rolling out an interactive consumer-request-for-information program nationally by the end of this year.

Opportunity for DRTV marketers. Since the national interactive advertising options are limited at this time, not many large brands are testing out the format yet. This creates an opportunity for DRTV advertisers seeking new ways to improve their ROI. It may involve piecing together various networks and technologies, but those willing to test out interactivity, while the marketplace is developing, are likely to benefit the most as these options become more widespread.

Peter Koeppel is a Wharton MBA and president of Koeppel Direct, a full-service media buying agency based in Dallas. Koeppel also serves on Electronic Retailer’s Magazine Advisory Board. He can be reached at (972) 732-6110, or pkoeppel@koeppelinc.com.