More and more people are purchasing personal video recorders; users of the technology have the ability to fast forward through commercials.
Posted Sep 23, 2003
The traditional television-advertising model may be about to change dramatically, according to a new report by research firm Yankee Group.
As more and more people purchase personal video recorders (PVRs) like Tivo and on-demand digital-cable set-top boxes, the 30-second commercial spot may become a thing of the past, because users of the technology have the ability to fast forward through commercials.
The current penetration of PVRs remains at just 2 percent, or about 2.5 million households, says Adi Kishore, Yankee Group Media & Entertainment Strategies analyst and author of the report, "The Death of the 30 Second Commercial." However, by 2006 that number could jump to as high as 19 million, he says.
Kishore says that companies and advertising agencies will have to resort to multichannel, guerilla marketing efforts to connect with customers who are zipping through traditional ads. Promotional items like interactive DVDs and product sponsorships can help extend brand awareness in a commercial-free age.
"Marketers will need to work closely with television programmers or devise content that promotes the brand in such a way that the purpose is not solely advertising, but also entertainment," he says.
Currently, product placement seems to be the most popular alternative to the traditional commercial, since it requires no knowledge of technology, Kishore says. "Enhanced TV and targeted advertising have tech components that some agencies may not [at this time] be savvy enough to see the potential benefits," he says.
Overall, Kishore says that brand marketers have to be opportunistic when reaching out to their customers. "You have to ask, 'What's going on that I can put my brand into? What events are taking place that I can take part in an get the word out?' " he says.
Marketing executives need not panic, Kishore says, since the 30-second commercial will most likely remain the most widely used advertising medium for at least the next five years, according to the report's findings. The impact will begin to be felt in mid-2005, when the PVR user base hits 10 million, Kishore says in the report.
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