Study Says DVR Hasn’t Changed Ad Effectiveness

May 10, 2010

95% STILL WATCH PROGRAMMING LIVE 

According to a Duke University researcher, DVRs have not hurt television advertising or changed consumers’ buying behavior. 

Some predicted earlier this decade that technology like TiVo and other digital video recorders – because they enable viewers to easily fast-forward through ads – would (eventually) kill television commercials.

However, Carl Mela, a professor in Duke’s Fuqua School of Business, says that the ability to skip through the ads has had no effect on buying behavior and that not as many people fast-forward through television commercials as originally feared.

“Companies are afraid of a ‘TiVo effect’ and are changing their media spending as a result.” said Mela. “But we find no change in people’s shopping patterns when we compare a group that has TiVo with a group that doesn’t. The manufacturers’ fears seem to be overstated.”

Mela credits the lack of impact to several factors: 

  • About 95% of people still watch television live and, as a result, cannot fast forward through the commercials.
  • Even those without a DVR can skip commercials by using the breaks to go to the kitchen or flip to another channel.
  • While viewers fast-forwarded through about 70% of the commercials in shows they recorded, they still watch the screen to know where to resume play, meaning they are still being exposed to the advertisements.
  • Ability to record a show and watch it later means consumers are watching more television.

 The study included households with and without DVRs.

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It’s the Creative Stupid!

April 29, 2010

That’s exactly what I want to tell advertisers who continually complain about how television has lost its effectiveness.

You won’t see Progressive Insurance complaining. The company recently blew away analysts’ expectations with a 27% jump in quarterly profit. They also noted the fifth straight quarter in which their auto policy counts have been up. 

It appears the television commercials featuring “Flo” are winning over more than a few new customers for Progressive. The quirky cashier’s appeal is grabbing market share faster than she can fire off another zinger. 

Now back to the problem with TV advertising?

It’s pretty basic. It always has been. Engage viewers with something compelling, add in a relevant, unique selling message and stay consistent with it. And most of all, keep an open mind.

How many Insurance company executives would have thrown their agency out the front door if they presented them with commercials featuring a talking gecko … or a bunch of cavemen stuck in the ‘80s … or a sarcastic cashier sporting a tricked-out name tag with “Flo” emblazoned on it?

What would your reaction be?  

Remember, pedestrian creative produces pedestrian results. 

TV will continue to deliver excellent ROI, but only for those retailers willing to step out of their comfort zones.

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TV Advertising Pays Dividends NOW

April 20, 2010

After 27 years in the advertising business, I have been exposed to all kinds of propaganda, and I’m sure I have been guilty of propagating some myself.  But, I have always tried to base mine on logic.  So when I hear the social media people tell me that television is fast becoming a thing of the past, I must question the logic in which they base this claim.

 Are they unaware that in 2009 the average American home had 2.86 TV sets; 18% higher than 2000 and 40% higher than in 1990? 

Or that Americans spent over 36 hours a week watching TV last year compared to 4-hours a week using the Internet?

Perhaps they also forgot that 35% of all advertising dollars will be directed to TV advertising in 2010.

Even if they were aware of these facts, I’m sure it remains a mystery to them “why” television remains so popular.

So, let me clear up this mystery as succinctly as possible. Consumers continue to purchase TV sets, at a record pace, because they simply enjoy watching what’s on them. It’s passive entertainment. It requires them to do absolutely nothing, but switch it on. A comforting concept in today’s overly active world.

TV receives 35 cents of every ad dollar spent because it works for its advertisers. Despite the debate over Push vs. Pull marketing; there’s apparently more than enough consumers who are still happy to be “pushed” into stores all across America. 

While building online communities, cultivating dialog and adding twitter followers may eventually pay dividends.

TV pays those dividends NOW. 

And from a retailer’s standpoint, coming off the worst recession in 70 years, I can’t think of a better reason “why.”

 

Source:  Nielsen Television Audience Report, 2009

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America Speaks Out on Nike’s Latest TV Commercial

April 14, 2010

While many Madison Avenue executives are slobbering  praise over Nike’s latest controversial commercial featuring a somber Tiger Woods as he is reprimanded by the voice of his deceased father – main street America’s is responding much differently.

An online poll of 600 Americans by Flemington-based HCD Research shows that the favorable opinion of the Nike Brand dropped from 92% to 79% after watching the commercial.  With 29% of the viewers saying they were less likely to buy products endorsed by Woods after viewing the creepy commercial.

I’m not surprised with these poll results.  It is Nike’s pathetic attempt to capitalize on the reprehensible behavior of another athlete pitch man gone bad. 

A Nike spokesman, reading from a statement, said “The ad addresses his (Tigers) time away from the game, using the powerful words of his father.”  Really?

He neglected to say that those “powerful words” were carefully taken out of context from a 2004 interview that had absolutely nothing to do with the current situation.

A well-crafted, edgy commercial … too bad it didn’t fool the people who really count – the consumers.  

After a series of controversial commercials over the years, I think Nike may come to regret this one.  I know I have.

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TV Advertising – Stronger Than Ever

February 25, 2010

Everyone is selling something.  As soon as you realize this simple fact, the sooner you’ll be able to see through the “TV is Dead” smoke screen perpetrated by those who are, yes “selling” digital services.

Most new media folks are like the partisan politician who is unwavering in his position even when the facts prove otherwise. It’s the classic “if I say it long enough … it must be true” approach.

 Well, they can stick to their “TV is so yesterday” talking points, but the facts just don’t add up. 

TV is stronger than ever. This, according to the largest privately-owned, full-service direct response media agency in the country. And TV is not losing its luster.

The Senior Director, Research & Analytics at Mercury Media, Michael Goodman says, “Rather than cannibalize traditional television, emerging video platforms, like Hulu, cable VOD and FLO TV, are supplementing viewership and creating new revenue streams for programmers.”

“Television advertising is not dying,” said Goodman.

Rather than fragmenting the marketplace, emerging video platforms like broadband and mobile TV are acting as audience multipliers.” Goodman points to innovations like Addressable TV, TV Everywhere and Interactive TV as leading the evolution toward “a harmonious video delivery ecosystem.”

Among Goodman’s top findings are: TV is still the #1 screen. Television viewership remains at hundreds of hours per month, while viewership of broadband and mobile video remains in the low single digits.

“It is reckless to proclaim that any great revolution is taking place”, says Mercury.

In 2Q 2009, watching TV in the home accounted for 77% of screen time among consumers age 2+, up 1.5% year-over-year.

So there you have it. Yet more information that dispels what the new media folks would have you to believe on the state of television.  But it won’t stop them though … they’re armed with one heck of a sales pitch, just not the facts.

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Americans Spending Even More Time with TV

December 16, 2009

TV Remains “Most Influential Ad Medium for 2009”

A year dramatically impacted by the economic recession has influenced consumers to return to watching television over other types of entertainment. Deloitte’s 2009 “State of the Media Democracy” survey reveals a 26% increase in the number of Americans choosing the TV as their favorite type of media as compared to the previous year.

More than 70% of survey respondents rank TV their top three favorite media activities. Additionally, when ranked alongside other activities like surfing the Web, listening to music or reading, 34% of consumers still place TV at the top. This is a substantial increase from last year and more than double the percent of the number two choice, which is the Internet that came in at 14%.

When watching their favorite TV programming, 86% of survey respondents prefer watching on their television set, enjoying the programming either live, via a DVR/TiVo or using an “On Demand” feature. While less than 10% of Americans say they prefer watching the same content online, it is a growing trend.

Hours Spent with TV:

  • Nearly 18 hours of television programming is spent on TV in a typical seven day week – up notably from less than 16 hours last year.
  • Millennials (ages 14-26) had the largest increase, to almost 15 hours from 10.5 hours.
  • 72% of Americans say they have been forced to reduce their purchases of other entertainment products including movies, concerts, sporting events, DVDs, CDs and videogames.

Besides TV viewing, the survey supports the culmination of the game console as a stand-alone media platform and the mobile phone’s rapid decoupling of the Internet from the desktop and the rise of tribal marketing.

But, nevertheless, television continues to reign as the most influential advertising medium, with 83% of consumers identifying TV advertising as one of the top three media with the most impact on their buying decisions. Online advertising ranks much lower in impact than television.

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TV Advertising Helps 3 Auto Brands Stand Out!

November 11, 2009

Picture for Post #39

 

What do Hyundai/Kia, Subaru and Volkswagen all have in common?

1) They spent considerably more on television advertising for the first 6 months of 2009, as a percentage of their ad budgets, than the auto industry average.  

Brand

% of ad budget spent on TV Advertising

Hyundai/Kia 

78.4%

Subaru 

90.0% 

Volkswagen 

80.7%

Industry Avg. 

62.5%

2) All three auto makers saw their market share increase substantially over the same period a year ago.

Brand  Market Share Increase 
Hyundai/Kia  39.7%
Subaru  52.9%
Volkswagen 28.8%

3) All three posted year-over-year unit sales decreases (every single manufacturer suffered decreases in sales during this period) that were considerably less than the industry average.

Brand  Unit Sales Decreases 
Hyundai/Kia  -9.4% 
Subaru -0.8%
Volkswagen -16.4%
Industry Avg. – 35.1%

4) All three brands allocated a smaller percentage of their ad budgets to Internet advertising than the industry average:

Brand  % of ad budget spent on U.S. Internet Advertising
Hyundai/Kia 3.7%
Subaru 5.4%
Volkswagen 4.0% 
Industry Avg. 7.5%

What do I think?

First of all, I think all three auto makers have done a great job bringing products to market that people actually want to buy. That’s most important to remember.

I also think it’s hard to refute what the data above says about their advertising decisions. There’s no denying, I’ve seen a ton of compelling television commercials for Hyundai, Subaru and Volkswagen this past year … and it would appear I was not the only one. 

I don’t care how the new media crowd spins it, when a brand like Subaru spends 90% of their total ad budget on television and is able to increase market share by 53% — it makes a compelling case for the power of television advertising. Short and simple.

And when you add in the impressive sales performances by Hyundai and Volkswagen, it’s even harder to ignore that television played more than just a casual role in success of all three auto makers.  Wouldn’t you agree?

Source:  TNS Media Intelligence/Automotive News

 

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