Are DVRs Good for TV Ads?

Are digital video recorders - DVRs - (like Tivo) the death of television advertising? As you probably know, DVRs allow users to store fav shows on a hard drive and replay them later, zipping past the commercials. Users can also pause and fast forward live TV. The conventional wisdom is that as more of us use DVRs, commercials will have a dwindling audience and impact. But, a report in this week's (Aug. 9) Marketing magazine provides an interesting breakdown. Based on the adoption rates of other technologies like VCRs and DVDs, the report's author assumes that by 2008, 25% of North Americans will have DVRs. Only about one per cent do now. The report assumes that in DVR households, about half of all future watched shows will be digitally recorded and half of those will be watched with the commercials zipped through (this is based on surveyed DVR user behaviour). If all that is true, then the report states, "there is a theoretical loss in ad viewing of just over one per cent over the next five years." But, the report also points out that DVR users watch 20 per cent more TV than non-DVRs users, so the net impact of DVRs could be good for TV advertising. Whew, there's a counterintutive conclusion that should make traditional ad agencies sleep easy. But, I think the report naively extrapolates early adopter behaviour (and more importantly early technology) into the future. Certainly DVRs will get easier to use. As well, the users will be more attuned to controlling their media. Another story in the same issue focusses on tweens. According to that feature, Canada's 2.5 million tweens influence $20 billion in household purchases. Thirty seven per cent of them log onto the Web every day. How long do you think they'll put up with commercials they have no interest in?