Is TiVo A Media Company Or An Accountability Company?

In today's New York Times, Tom Rogers, the chief executive of TiVo, said in an interview, "We are very much a technology company. At the same time, in the last year and a half we've substantially moved in the direction of becoming a media company."

I would challenge Mr. Rogers on that. Because what TiVo has actually become in the last year and a half is an accountability company.

NBC Universal has figured this out and has signed on to receive TiVo's second-by-second viewership data. As has Carat, Starcom, Interpublic and Crispin, Porter & Bogusky. According to the New York Times article, the other networks are also following suit.

The reason is that second-by-second data is truly the Holy Grail when it comes to accountability. And since TiVo offers a second-by-second sample size of 20,000 subscribers versus Nielsen's 3,000 DVR homes, they look to be the holiest of all.

Which is quite a turn-around for the one-time pariah of the ad world. Allowing viewers to skip advertising they didn't want to see made TiVo the devil-incarnate when they first came on the scene.

But, back then, no one looked beyond what TiVo was really offering. Yes, TiVo allowed viewers to skip advertising they didn't want to see. But, at the same time, TiVo also allowed viewers to click-in to advertising that they did want to see.

Of course, back then, we all just wished this viewer-control thing would go away. And with it, TiVo.

No such luck.

So, as it's now becoming obvious that user-initiated advertising will become the format of the future, a few of the more forward-thinking companies are signing on with TiVo early, trying to figure out how they'll make money when reach and frequency are no longer the end all and be all.

One way they could do it is through accountability, which just so happens to the number one priority of advertisers today. If NBC, or a media agency, or even the ad agency, has the data that shows how long viewers watched the actual commercial, they will be able to turn that data into dollars by being paid based on how "engaging" the commercial turned out to be.

In other words, by monetizing viewer time spent.

You would think smart advertisers would go right to TiVo and subscribe to the data themselves. This way they would know exactly how well, or not well, their commercials worked in the marketplace. And then they could start establishing the models that would allow them to pay their marketing partners based on this performance.

The networks, media agencies and ad agencies are all trying to build the models before the advertisers do. They want to make sure that the models are built to their specs, based on what they do best.

This may, or may not be what the advertiser actually wants or needs. But the longer advertisers sit on the sidelines, the greater the possibility that this is what they will get.

TiVo is, in many ways, a microcosm of what a viewer-controlled ad industry will be like in the future. Each commercial will be viewed only by the interested. Because this number will be much smaller than what the industry deals with today, time spent with the message will become more important than the number that see it.

Measuring time spent requires second-by-second data. TiVo has it. Their gold mine isn't in trying to scale out their technology. Their gold mine is in the fact that they were the first to give the viewer control. And now they have the data that shows what happens when the viewer decides to use it.

If I were Mr. Rogers, I'd sell TiVo as an accountability platform and stop worrying about scale. Nielsen, after all, has done quite well with only 3,000 homes.

I think, Tom, you can do quite well with 20,000.

An Argument For The Elimination Of Media Agencies

Over the last two weeks, I've been invited to sit in a handful of meetings between an online publisher and a variety of different ad networks.

The publisher was talking to the ad networks about how best to incorporate some out-of-the-box thinking in different RFPs that he was receiving. In each case, the representative from the ad network listened politely, nodding and agreeing that the thinking, even though different, was terrific.

And that it would never get past the media agencies.

Not that brand marketers wouldn't like the thinking, mind you. But rather that the media agencies wouldn't buy it. And since marketers basically buy their media agency's recommendation, it's the media agencies where out-of-the-box thinking goes to die.

"The problem," one of the ad network people said, "is that media buyers all have these little boxes that they need to check off. The boxes are all based on filling so many impressions for so much money. When the boxes are checked off, their job is done and they get to go home."

In other words, their objective is really to fill in the boxes, not to think out of the boxes.

"Out-of-the-box thinking," this person continued, "needs to be approved from someone in the C-Level Suites. The problem is that the C-Level people are all out on the lecture circuit talking about how the industry needs to incorporate out-of-the-box thinking."

"Yet their people back home are all rewarded for staying within the little boxes on the RFP and filling them in as quickly as possible."

What I've been able to garner from these meetings with the ad networks is that when a marketer asks for out-of-the-box thinking, the media agencies say that the ad networks and/or publishers aren't supplying any. Or, that it's too hard to scale out-of-the-box thinking.

And, they're right about the latter.

Out-of-the-box thinking is non-scalable thinking, at least to start with, as it is a new way of thinking.

And any new way of thinking, if it's truly any good, always starts in a much smaller box.

Fortunately, we know that good things often come in small packages. And perhaps if media agencies continue to be remunerated based on delivering big audiences rather than big thinking, the best option is to use less of their thinking.

At least, that's what this publisher is thinking. To go directly to the marketers themselves, have them buy into his idea, and then deal with the ad networks directly as distribution partners.

After all, media agencies, are for the most part, impression brokers, buying and selling eyeballs. What this publisher wants to sell is interest, not exposure. Involvement, not impressions.

He has a way that works.

And he's tired of having the media agencies say it won't.