Monday, July 16, 2007

Is TiVo Missing The Point?

TiVo recently released some new data that indicates which kinds of commercials stop people from zapping through ads. What the TiVo data indicates is that the bare-bones, direct-response model works well, as does the high-production value approach, also known as movie trailers.

Two opposite ends of the spectrum, indeed.

According to Todd Juenger, VP-General Manager of TiVo Audience Research and Management, "there are no obvious winning strategies."

I'm afraid to ask, Todd, but does this mean that there are only losing strategies? Not a good selling point if what one is trying to sell is advertising space.

But what I found to be the most interesting quote from the TiVo camp was this - "I'm sure creative has an important role, but it's the relevance of the message to the audience that could be the deciding factor".

Relevance, huh?

So what if the most irrelevant (and irritating) thing about advertising is the way that it interrupts the programming that we are watching?

Could we make advertising more relevant by making it less intrusive?

What if we placed commercials adjacent to the programming, waiting to be activated only by those viewers who find the product or category to be relevant to their particular needs?

Once viewers click-in to a commercial that they have determined to be relevant, then something very interesting happens. The creative becomes a greater factor, if not the only factor, that determines time-spent with the commercial.

This user-activated way of watching commercials appears to be the way the web is going. A few cable operators, Insight, in particular, are also treating their viewers with more respect by letting them determine relevance.

The problem with user-activated advertising is that only the interested will click-in, which will require a new way to buy and sell advertising.

The CPM model will not work effectively. After all, CPM is based on waste. Allowing viewers to click-in to commercials of interest means that waste only occurs when the viewer clicks-out before watching the entire spot.

What does become a more valuable metric with user-activated advertising is time-spent with the message. Fortunately, time-spent data is available not just through TiVo, but also through many online platforms today.

There are many in the industry who feel that second-by-second data will lead to a complete breakdown in the way that advertising is bought and sold.

And, I would have to agree.

But it won't break down in the way that most are expecting. As everyone seems to be trying to determine what will replace CPM from a media perspective, I feel a bigger MindChange, or perspective-shift is needed.

One that can understand and accept that time-spent with the message is not a media issue at all, but rather, a creative one.

And that in the Digital Marketplace, the ad agencies that can create more time-spent will make more money than those that create less time-spent.

Yes, the role of the media agency will still be to target relevance.

But, by no means, should they be accountable for creating it.

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