NBC Universal’s agreement with DISH Network to enable ad-triggering capabilities for the satellite provider’s DVR customers, which follows a similar deal late last year with TiVo subscribers, is one more salvo in the ongoing battle to keep viewers engaged with commercial messages.
The DVR—which is estimated by Nielsen to be in 20% of households and growing rapidly—is a bane for advertisers and programmers ever more desperate to connect with viewers in a rapidly fractionalizing media market.
Interactive triggers let satellite customers with DVRs use their remote control to request more information or access special discounts from an advertisement. Viewers select an icon displayed during a commercial that takes them to a separate page. Once finished, they’re conveniently returned to their program at the exact place they exited. Put simply, it is the interactive Internet advertising model adapted for television.
The DISH and TiVo deals include the full suite of NBC Universal television networks (NBC, USA, Sci Fi, Bravo) and 10 NBC owned-and-operated TV stations (including WNBC New York and KNBC Los Angeles).
“I think that advertisers are clearly seeking more ROI [return on investment] in their advertising on a traditional TV model,” says Ed Swindler, executive VP and COO of ad sales at NBC Universal.
Trigger capabilities, he adds, “enable [advertisers] to focus more on the viewer response. Ultimately, advertisers over time are really buying the response of the viewer, not just the number of viewers. And there has been no way to accomplish that goal on television.”
The deal will also give NBC the ability to provide detailed reports about viewer participation with DISH Network’s interactive products. And the more information advertisers have about consumers, conventional wisdom implies, the better they will be able to sell to them.
“Every client we have is under substantial pressure to improve the efficiency of their marketing buy,” Swindler says, “and that’s particularly true when the economy begins to sag. Fractionalization and technology and time shifting are simply a fact of life, and if we don’t get our arms around how to monetize television by increasing the effectiveness of advertising, it will affect our business adversely.”
To that end, the fourth-place network has stressed a collaborative approach to the upfront selling season, when networks unload about 75% of their seasonal primetime inventory. Last year, the broadcast networks’ upfront haul came in at $8.9 billion. But the writers’ strike and the foundering American economy combined to dampen the upfront and have some Wall Street analysts predicting as much as a 14% dip this season.
At the recently concluded upfront week in New York, NBC Universal jettisoned the traditional Radio City Music Hall dog-and-pony show for an interactive “experience” at Rockefeller Center designed to highlight the broad range of advertising opportunities—cable, film, digital, theme parks. The takeaway: more bang for precious advertising bucks.
But old business models change slowly. “There’s one great truth: We are not changing the advertising model fast enough,” Swindler concedes. “I do believe the ad model will evolve over time. It will be a fast evolution rather than a revolution. But it will evolve. And I think that if we don’t help move it along, then we are not managing our business properly.”