Nielsen Unveils DVR Stats - Time To Rethink Ads

by: Davis Freeberg

For avid TV watchers, May is one of the best times of the year. The networks strut out their best quality stuff, there are plenty of cliff hangers, NBA finals (Go Lakers ) and don’t even get me started on the season/series finales.

It’d be nicer if we could just have fresh content all year round, but for whatever reason the networks want to make consumers gorge on television, just to take it all in for one month. At least there will be time for sunlight during summer reruns.

For advertisers and the studios though, May marks the start of a vicious frenzy of negotiations, where fortunes can be won and lost in a bizarre game of chicken, that I’m not sure I’ll ever understand. Every year, we see the same dance, the studios unveil their A list stuff and the marketing agencies come drooling with their blank checkbooks.

Last year though, things didn’t go as smoothly as planned. Issues like DVR usage and streaming internet video started to creep into the negotiations. The marketing agencies demanded that they only pay for live viewers and the studios tried to convince them that DVRs were somehow actually good for them.

The truth was though, that the studios had lost control and eventually the ad agencies were able to negotiate rates on their terms, instead of having to cave to last minute pressure. With May sweeps about to start up all over again, you can bet that both sides are positioning themselves for how they plan on dealing with these irritating DVR owners.

To make matters worse, before the feeding frenzy can even start, Nielsen has added blood to the water by publishing their first guesstimates on the actual size of the DVR market.

Before this, it had been thought that DVRs were in 15.8% of households, but Nielsen thinks that the actual DVR market penetration rate is closer to 17.2%.

As a huge fan of DVR technology, I can’t say that I’m surprised. The technology really is that powerful. Somehow I don’t see DVRs becoming any less popular, so I think it’s safe to say, that at least within the near future, 1 out of 5 households is going to have the power to take back control of its television experience. The studios will try argue that not everyone wants to be a power ad zapper, but let's not kid ourselves, these are just negotiation tactics, the real value of the 30 second spot is no longer close to what it once was.

I’m sure that the studios aren’t happy about DVR users, but I am glad that it is forcing them to innovate. I know that creative content owners can figure out a way to make good content and advertise even without 30 second ads. It’s time for the ad agencies to do what they do best and that is get creative so that they can make product placement a viable alternative to spastic interruptions during our programming.

Pretty soon the bidding war will begin, but if I was a marketing executive, I’m not sure that I’d be even buying 30 second spots to begin with, let alone paying for the 1 out of 5, who are just going to blast through your ads anyway. Negotiations will be tough this year, but as a bystander, they will be fun to watch.

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