Monday, October 20, 2008

Why Behavioral Targeting And Addressability Aren’t The Answer

I remember when TiVo used to be more circumspect.

From the very start they were well aware that when viewers time-shift programming, the commercials were fast-forwarded through in mass. But TiVo was less then willing to share that information with advertisers as they didn’t yet have a solution to the problem.

That has apparently changed. While I’m still not sure whether they have THE solution to the problem, they are certainly more forthcoming in letting the TV industry know that a major meltdown to the system is on the horizon.

Tom Rodgers, head of TiVo, was a breakfast speaker at last weekend's ANA conference in Florida. In no uncertain terms, he reminded the audience that in the next two to three years, the TV industry will face a crisis more serve to it, than the current financial crisis is to the economy.

The reason? In the next two to three years, 50 to 60 million households will have DVRs. The most prevalent behavior with a DVR? Fast-forwarding through commercials. In other words, about two-thirds of the homes that advertisers care about reaching will be fast-forwarding through those advertisers’ ads.

What’s worse, according to Mr Rodgers, fast-forwarding is a given, regardless of the type of advertising. Which means supplying a more demo-relevant version of a commercial to a viewer has little affect on their desire to fast-forward.

Ouch.

Reading between the lines, what Mr Rodgers said without saying is that behavioral targeting and addressability will have little impact on people skipping ads. And he’s 100% correct. Because behavioral targeting and addressability are solutions to the wrong problem.

The problem isn’t that people are skipping commercials because the commercials are not relevant. People are skipping commercials because the commercials are interrupting their programming.

Or, to put it more simply, people are skipping interruptions. Not commercials.

Which is why the solution lies in finding a way to present advertising in a non-intrusive manner. And, more importantly, since this will decimate the reach and frequency pillars upon which the linear model of advertising has been built, finding a way to monetize this non-intrusive model.

Which, at least in our opinion, is where time-spent comes in to play.

The linear, mass media model of advertising was based on how many people saw the message. The digital, viewer-controlled model will be based on how long people choose to spend with the message.

Viewer time spent is where value will be found in the future. Both for advertisers. And, for those agencies that can create it.

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