The numbers are in, and it looks like digital video recorder (DVR) owners are watching some ads after all.
Nielsen Media Research studied viewership of primetime broadcast commercials among viewers ages 18-49 in households with DVRs. The study found a total increase of 22% after seven days — almost a quarter of the ads recorded by DVRs get watched.
This is good news for advertisers who have been worried that the DVR boom would kill TV ads completely.
DVRs are gaining in popularity. eMarketer estimates that over a third of US households will have the devices by 2010.
Despite the lack of evidence that DVRs and video-on-demand (VOD) are killing the traditional TV model, there nevertheless has been a widespread perception that this is the case.
A March 2006 survey by Forrester Research of the members of the Association of National Advertisers indicated that almost 70% of them believed DVRs and VOD would reduce or destroy the effectiveness of the traditional 30-second commercial and, furthermore, that when DVRs were in 30 million homes the majority of the advertisers would reduce their spending on TV advertising.
That sentiment is likely born more of fear than reality. What it does mean is that many advertisers are reassessing their strategies to reach DVR users.
The fact is that advertisers want to reach the people who have DVRs. According to the Nielsen study, DVR owners are younger and better educated, and they have higher incomes than the average US household.
The question is whether TV is the best way to reach them.
Visa's CMO said that the card company used brighter colors in its "Life Takes Visa" ads specifically to lure fast-forwarders into watching them, according to an interview conducted by The New York Times.
On the flip side, Visa's Signature card is aimed at affluent customers (the ones who are more likely to have DVRs), so the firm cut TV ads completely out of the media mix for that campaign.
There are some types of programs that people tend to watch from start to finish which would seem to be sounder bets for ads: soap operas, shopping channel shows and local TV news.
eMarketer senior analyst Ben Macklin thinks that ad skipping is unlikely to shrink the overall ad spending pie.
"Many analysts and journalists like to draw a direct link between DVR ad skipping now and billions of dollars worth of lost TV advertising spending in the future," said Mr. Macklin. "This is misguided. One cannot lose something one never had. DVRs and VOD usage will merely assist in the redistribution of those dollars to where the content is accessed."