Source : Globe & Mail

Recorders that let viewers bypass ads gaining popularity

The spread of programmable video-recording devices will trigger a period of enormous uncertainty for television advertisers, who are already reeling from high costs and massive changes in the industry, a conference of Canadian advertising professionals was told yesterday.

Peter Sealey, chief executive officer of California marketing firm Los Altos Group Inc., said the development of the digital video recorder (DVR) will bring about a sea change not unlike that caused by the widespread use of the remote control in the late 1970s, which ended the era where people had to get up from the couch to change television channels.

Up to that point advertisers were in control, Mr. Sealey told the Association of Canadian Advertisers in Toronto. "You could irritate yourself into awareness." After that, the proliferation of cable channels and the advent of "channel surfing" meant advertisers had to work harder to entice and entertain viewers, he said.

Now, devices such as the TiVo digital recorder that allow users to bypass commercials are propelling television into the "skip and omit" era, he told the advertisers. Essentially, "consumers will have the power, if they choose, not to watch your television commercials."

Canadian advertisers currently spend about $2.6-billion a year on television commercials.

DVRs will eventually be as common as remote controls, Mr. Sealey predicted, and will force advertisers to take new approaches to get the attention of an audience. Increasingly, advertisers will resort to "product placement" on television shows, and the sponsorship of entire shows, to make sure their products are seen, he predicted.

At the same time as the widespread use of DVR technology looms on the horizon, television advertisers have been hit with escalating costs and a splintering of audiences, Mr. Sealey said. And the means of measuring the impact of advertisements have not kept pace.

That situation "is not sustainable," he said.

Mr. Sealey praised a new system, being developed by the Association of National Advertisers in the United States, that will create a unique identifying code for each piece of advertising, in television, print, radio, or other media.

This, when used in conjunction with an advanced bar-coding system being developed for retail goods, and new digital techniques for delivering media content, will eventually help the industry gear specific ads to individual viewers, he said.

In a panel discussion after Mr. Sealey's speech, Peter Swain, chairman of media buyer MediaCom Worldwide (Canada) Ltd., told the audience that using this kind of technology to target ads is crucial to the advertising industry's future.

Gathering data from bar codes at retail checkouts, and combining them with information from the advertising database, will let advertisers target toothpaste ads to a specific individual, for example, Mr. Swain said.

There may be a backlash from consumers because of privacy issues, he acknowledged, so the advertising industry must do an effective selling job on the benefits of the technology. The main benefit for consumers of individually targeted advertising is that it can help cut the clutter of advertising they are now subjected to, he said.

The current intrusion of unwanted ads is in itself an invasion of privacy, he told reporters after the panel discussion. "People will be thrilled to know [that] finally the junk mail will stop."

A secondary benefit is that the price of some products may decrease, if wasted advertising spending is reduced, Mr. Swain said.

People have been willing to accept limitations on their privacy in the past when they understood the benefits, he insisted. "The advertisers' message has to be that privacy is an evolving thing, much as anything else."

In the panel discussion, Bell Globemedia CEO Ivan Fecan expressed a note of caution about the changes television advertising may face because of technology. He said DVR technology so far has been embraced mainly by a small group of people who watch a lot of television, and its effects on advertising might not be as devastating as Mr. Sealey predicted.

"Just because technology makes something possible, doesn't mean people will want it," he said.

Mr. Fecan noted that television itself was once touted as the death knell for movies, that the remote control was supposed to kill off all television advertising, and that some people expected the Internet to eliminate conventional television. None of these dire predictions came to pass, he said.

Still, he said, CTV (which is part of the Bell Globemedia group, along with The Globe and Mail) is making sure it carries a lot of live events such as sports programming, which are less likely to be recorded and watched at a later time while bypassing the commercials.

© Globe Information Services