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How Advertisers Can Learn To Love the DVR

OMD’s DeSocio tells CAB panel his agency has a plan 5/29/2005 08:00:00 PM Eastern

What is happening in television now is nothing less than “a personal-media revolution,” says David DeSocio, director of strategic marketing for the U.S. division of OMD New York, the world’s largest media-buying agency. And OMD, he made clear at the Cabletelevision Advertising Bureau’s local ad sales conference in Chicago last week, wants to be one of the revolutionaries.

OMD is now embracing digital video recorders (DVRs) and asking a provocative question: What if the commercials played over TiVo-like units were designed to deal with consumers’ fast-forward tendencies?

While he declined to be specific, DeSocio said that, over the next few weeks, OMD will begin testing a new type of media buy that would deliver what he termed “fast-forward commercials,” or ads that would appear in conventional speed while DVR users are zipping through those scheduled in the recorded TV programming.

“EMBRACE FRAGMENTATION”

“We’re telling [advertisers] to embrace fragmentation,” DeSocio says, something they and the agencies have been struggling to work around in years past.

OMD’s DVR mellowness is especially remarkable considering that, by OMD’s own math, DVRs are now in about 10% of U.S. households and that DVR users tend to skip through most of the commercials they are exposed to.

As much as that is challenging the way media agencies like OMD operate, DeSocio said, it also is creating new opportunities to think “beyond the 30 [-second commercial]” and develop new ways of engaging consumers. The best way, he said, was by delivering the kind of relevant advertising messages that DVRs and VOD can afford, aligning the content of advertising messages with the content individual consumers are accessing.

DeSocio wouldn’t give details on how OMD is developing the means to deliver ads to consumers who are “in the avoidance mode,” as DeSocio refers to viewers who fast-forward their DVRs through commercials.

But he alluded to techniques being developed by TiVo that would run audio ad messages, superimpose a “billboard” ad or run commercials in a picture-in-picture screen while viewers are in fast-forward mode.

Otherwise, the CAB crowd was clearly just enjoying the sheer force of ideas behind what cable advertising can do that broadcast can’t. “It’s the Internet on steroids,” proclaimed Larry Fischer, president of media sales at Time Warner Cable, during a particularly enthusiastic session in which the industry’s top local cable sales executives spoke not just about how they were managing the sales of local cable advertising avails, but also about their migration into “new media.”

MADISON AVENUE QUESTIONS ITSELF

“It’s the new Internet,” chimed in Anne Ragsdale, VP of advertising, Bright House Networks Group.

What Fischer, Ragsdale and their colleagues were touting during the CAB conference’s President’s Panel wasn’t so much their ability to deliver local advertising messages to viewers of conventional cable programming, as it was about new ways they are exploiting their set-tops to deliver digital, consumer-controlled media, including DVRs, video-on-demand (VOD) and broadband access to the Web.

Those emerging technologies, they suggested, are transforming the way cable operators think of their relationships with both consumers and advertisers, at a time when Madison Avenue is also readdressing its own fundamental business model. Things are changing as consumers gain control over the programming and commercial content they are exposed to via the Internet, DVRs and VOD.

Even though the OMD still spends 66% of its clients’ advertising budgets on conventional TV advertising, and only 3% on new digital media, DeSocio said, the agency has radically shifted its approach to media planning.

NOT A THREAT

There was more news about DVRs during the three-day cable sales conference: During the opening session, Ed Gordon, director of local and affiliate research at ESPN, revealed findings of a study that indicated that DVRs are not nearly the threat the industry’s “Chicken Littles” have been making it out to be.

Among other things, Gordon said, the study found that so-called late adopters—people who have not yet acquired a DVR—may not be interested in the devices in any case. More than half (57%) of the households that were given DVRs as part of ESPN’s study returned their DVRs before the research was completed, citing reasons ranging from installation hassles to such problems as the DVR’s clashing with their home furnishings.

But Madison Avenue is taking it for granted that devices like DVRs and technologies like VOD and broadband access are fundamentally altering the way consumers access and control media content.

Indeed, DeSocio says, OMD has a name for these new hubs for content: The ad agency dubs them the 21st century “media concierges.”

 

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