Who's Afraid of the Big Bad DVR? - Millward Brown examine the implications of DVRs (PVRs) for advertisers and advertising agencies
The advent of the Digital Video Recorder (DVR) — known as the Personal Video Recorder or PVR in many countries — has caused a significant stir in the world of marketing. Increased consumer control over the traditional advertising medium of choice will have significant implications for both media planning and creative execution. How will TV advertisers need to adjust to deal with time-shifting and fast-forwarding?
What Makes the DVR Different?
Time-shifting and fast-forwarding have been with us for many years. What makes the DVR or PVR different from the traditional VCR is ease of recording, navigation and the degree of control over content — particularly the ability to time-shift and the amount of content that can be saved. Time-shifting is a major advantage to viewers — either to view programs automatically pre-recorded, or pause live TV and rejoin the action where they left off. An additional viewer advantage, however, is the ability to fast-forward through advertising. This does not mean that the viewer will see none of the ad. It takes a few seconds to fast-forward through a 30-second commercial, and while there is no sound, you do see a rapid sequence of images. So, while ad avoidance is not completely achieved, fast-forwarding poses a distinct threat to TV advertising as we know it.
If Not Now, When?
Anecdotal evidence suggests that the penetration of DVRs in the marketing community far exceeds that in the world as a whole. In the U.S., among the entire population, penetration has yet to exceed 10%, and actual penetration has consistently fallen short of forecasts. Why has this supposedly attractive innovation not gained more ground?
To understand this, we need to consider the practical and emotional needs of viewers. Not all of us are Type A go-getters, who need to be in the know all the time. For these people, busy schedules mean that the DVR’s time-shifting capabilities are a real boon. They can schedule their viewing just like they do their business agenda. For the rest of the population, however, the TV remains a sanctuary from a scheduled agenda. The TV offers a time to relax, take their minds off the hook and let someone else make the decisions for a while.
That not everyone wishes to actively control entertainment should come as no surprise. Most people prefer to buy or rent movies and music rather than record them for themselves. This would account for the fact that, although introduced at about the same time, DVD players have now achieved a U.S. penetration eight times higher than DVRs.
So when will DVRs become a significant factor in TV viewing? The wild card to this forecast is that cable and satellite companies will likely push Video On Demand and interactive technology as a means of competitive advantage, and may bundle them into the basic package in spite of lower-than-expected consumer interest. Our expectation, based on the available data, is that penetration may achieve 40% by 2010.
The Impact of Fast-Forwarding
In early 2005 Millward Brown conducted some research into DVR, DVD and VCR usage. The findings confirm that DVRs are not necessarily bad for TV advertising. DVR users were more likely to record lots of TV programs (43% versus 27% for owners of DVD recorders and 22% for owners of VCRs) but they are no more likely to fastforward than VCR owners.
In fact, fast-forwarding may not be such a bad thing since the viewer is engaged, not out making the coffee or surfing the Web. While fast-forwarding, people will be attending to the content because they might see something of interest. This is borne out by the survey results. While there was little difference in the proportion of DVR owners claiming to fast-forward through ads, they are more likely than VCR owners to claim to stop and look at the ads (42% versus 23% of VCR owners). The DVR technology actually facilitates people watching the ads, unlike VCRs, because people can see the fast-forwarded images and can easily stop and replay the ad.
Interestingly, there is evidence from experimental research conducted in the United Kingdom that fast-forward exposure also has an impact. DUCKFoOT Research and Development conducted a controlled experiment of fast-forward viewing where ads were viewed at 30 times normal speed and concluded "x30 fast-forward ads induced a positive emotional response." Critically, however, this response was only observed for ads that had previously run on United Kingdom prime-time TV. There was no emotional response to a set of international ads to which respondents would not have been exposed, suggesting that prior exposure primes the mind to respond positively even to a subsequent, fleeting exposure.
Implications for Creative Development
High-interest product categories and high-affinity brands will have an innate advantage in a DVR world
In 2005 we added questions to 59 Link pre-tests on U.S. and U.K. ads. In spite of 63% of people saying that they would fastforward ads if given the opportunity, an average of 17% said they would stop and watch the specific ad tested. The range of response was wide, from a low of 2% to a high of 30%. Likelihood of stopping and watching a specific ad was strongly influenced by having an interest in the brand and product category, suggesting that high-interest product categories and high-affinity brands will have an innate advantage in a DVR world. Fortunately for other brands, however, the findings also suggest that enjoyable ads have the ability to stop people from fast-forwarding, overriding the effects of low category and brand interest. A qualitative assessment of the test ads confirmed that ads featuring attractive, empathetic characters, and motivating imagery, and which were intriguing or featured something out of the ordinary, were likely to perform better.
Of course, this research was based on what people said they would do. While not supported by the findings, we might also expect strong visual icons and compelling campaign themes to perform better in a fast-forward world. When actually fast-forwarding, all the viewers see is a sequence of images. In order to decide whether to stop and watch an ad, people must be able to identify — albeit at a nonconscious level — whether the ad is going to be of interest to them. This implies that strong visual icons related to the category, brand, prior ads in a campaign or target audience need to be featured in the ad, preferably near the beginning, to ensure that viewers have not fast-forwarded onto a new ad by the time they consciously decide to stop and watch.
A fundamental conclusion of our research to date is that interactive TV shares many of the same characteristics as magazine advertising. Traditionally, TV has been a “lean-back” medium, with viewers happy to follow along with the content, like tourists following a guide in a museum. In the fastforward future, the viewer will be actively engaged with the content, leaning forward and searching for items of interest, like someone following signs to a destination. This has implications for creative development when it comes to creating a desire to stop and watch, but we believe it also has implications for media planning.
Implications for Media Planning
Work conducted in the 1990's by Millward Brown demonstrated that magazine advertising had more initial impact per exposure than TV advertising but that, unlike TV, the impact decayed after three opportunities to see the ad. The conclusion was that, while interest in the product category may have caused people to stop and read an ad once, they had little reason to do so again, DVRs make the remote an even greater threat to advertising High-interest product categories and high-affinity brands will have an innate advantage in a DVR world and on subsequent encounters with the same ad, simply turned the page. This does not mean the ad was ineffective. Ignoring the ad on subsequent exposure was a sign that the ad had already done its job and delivered an impression. DVR users will have the same opportunity to consume and then ignore TV ads that rely on product category interest. This will have important implications for media planning, requiring agencies to limit frequency of exposure to a single ad in favor of exposing viewers to multiple, complementary ads, with just enough frequency to ensure that they are all viewed once.
Of course, this finding may not apply to ads that are enjoyable or intriguing enough to get people to watch them multiple times, but even here there are some interesting media implications. In order to get people to stop and watch ads in real-time, or to stimulate the emotional response identified by DUCKFOOT, people will need to have seen the ads before, or to have seen ones like them. The media challenge will become to expose people in a live viewing environment before the ad is viewed in fast-forward mode.
Not the End of TV Advertising as We Know It
Even when programming is recorded and played back, not all ads will be skipped
Based on this analysis we do not believe that DVRs are the end of TV advertising as we know it. Rather, DVR usage will slowly change the nature of TV viewing for some people, some of the time.
Not all people wish to control their viewing of TV the way early adopters do. While most people will be willing to consume TV in a lean-forward mode on occasion, we believe that most viewing will still continue to be lean-back viewing of live TV. Even when programming is recorded and played back, not all ads will be skipped, because they offer something of interest, either relevant information or enjoyable content. If we assume a DVR penetration of 40% by 2010, with 33% viewing pre-recorded content, and 80% of ad exposures being avoided, then only 10% of potential exposure will be lost to DVR usage. While it may be one more cut in the effectiveness of TV advertising, it is hardly the catastrophe that many have made it out to be. It would take a far more aggressive scenario, such as 60% penetration, 50% pre-recorded viewing, and 80% avoidance to lower ad exposure by 25%. Even under that scenario, there is reason to believe that fast-forward exposure is not without benefit. There is little doubt, however, that for TV advertisers to be successful in the future, advertisers and agencies will have to become more sophisticated when it comes to developing and targeting copy to maximize its effectiveness.