New Ad Campaign Aimed at TiVo Owners

A new breed of interactive TV commercial debuts today, aimed at the people most likely to skip them.

Electronics retailer Best Buy Co.’s new campaign on MTV targets the 400,000 consumers who own TiVo Inc. personal video recorders. Such devices make skipping television commercials as easy as changing a channel, but they also give advertisers new ways to get their messages through to viewers.

In particular, Best Buy’s commercials will be linked to a series of exclusive promotional videos that TiVo is loading onto its subscribers’ recorders. Those videos also can be seen by TiVo owners who don’t watch the commercial.

That is one of several approaches advertisers are experimenting with as they gird for the day viewers watch what they want, when they want. Although relatively few TV viewers have personal video recorders or cable TV video-on-demand services that can fast-forward through commercials, that segment is expected to mushroom in just a few years.

“That ceding of control to consumers, that is something that neither networks nor advertisers have ever had to deal with before,” said Tim Hanlon, a vice president at Starcom MediaVest Group, a division of advertising giant Bcom3 Group.

Personal video recorders, or PVRs, record programs onto hard drives, not tapes, enabling viewers to pause, rewind and fast-forward through programs as they are broadcast. They make it so simple to record, owners quickly start watching about half of their favorite shows “time shifted” instead of live, said Manu Mehta, chief executive of Metabyte Networks Inc., which makes PVR software.

PVRs and video-on-demand services, which also let viewers rewind and fast-forward programs, threaten the existing form of advertising by letting consumers delete or delay commercials. But they also enable new advertising approaches that aren’t sandwiched into 30- to 60-second gaps between scenes.

For Eden Prairie, Minn.-based Best Buy, TiVo is quietly programming its subscribers’ boxes to receive and store a series of exclusive videos that pitch gadgets or burnish the chain’s image. Those videos will be linked electronically to Best Buy commercials that air on MTV.

If TiVo owners click on their remote controls during the commercial, the device will put the broadcast on hold and bring up a menu of the Best Buy-sponsored footage. The promotions vary in length because “they don’t need to fit into 30 seconds on TiVo,” said Brodie Keast, a senior vice president at TiVo.

Alternatively, TiVo owners can go directly to the Best Buy material from a main on-screen menu. Either way, those who view the extra footage will have the chance to win CDs from Best Buy, which hopes the freebie will curry favor with viewers.

“Advertisers today are going to be challenged to brand their messaging in a much more entertaining, much more meaningful way,” said Mollie Weston, manager of image advertising production for Best Buy Advertising. The company is trying to figure out how it’s going to talk to consumers in five or 10 years, she said, because “it’s not going to be the way we do it today.”

PVRs have a more revolutionary capability that advertisers have yet to deploy: They can deliver promotional messages targeted at individual users.

Each recorder could develop an electronic profile of its owner by combining census data about the local community with any personal information the owner was willing to submit, then use the profile to identify the types of commercials the viewer would be most likely to watch.

TiVo tested this sort of targeting with General Motors Corp., using the profiles to determine which model of car to pitch to different homes. If the profile called for a luxury car, for example, the box could electronically insert a Cadillac ad in place of a Chevy truck commercial.

That capability hasn’t made it out of the testing phase, however. Nor have most of the other advertising-oriented features of the new boxes, largely because few advertisers see much to be gained from experimenting with nascent on- demand technologies.

“The whole advertising market is crummy,” said Steve Shannon, a marketing vice president at Sonicblue Inc., maker of the ReplayTV PVRs. “The experimental stuff gets creamed in a downturn.”

The TV industry has been conflicted about PVRs since their arrival three years ago. Many of the major networks and studios were early investors in TiVo and ReplayTV, but they also created a trade group that threatened PVR manufacturers over the commercial-skipping feature.

They ultimately sued Sonicblue over a new version of the device that can be set to play back recordings with all commercials removed.

Only about 3 million homes are equipped for video on demand, and only 1 million have PVRs. Those numbers are barely a blip on the TV radar screen, so most advertisers “need to be cajoled or scared” into considering what happens when those capabilities spread to most homes, Hanlon said.

“The first [response] is abject horror and apoplectic disbelief that the sacrosanct 30-second spot that they’ve lovingly crafted, put a significant amount of money behind ... is essentially rendered mute,” Hanlon said. “The second step is: ‘How do we ensure that our spot isn’t skipped through? How do we fight this?’--that sort of thing.”

Neither advertisers nor technology companies have figured out yet how to proceed with each other, said Mitch Oscar, senior vice president and director of media futures at Universal McCann, an arm of advertising powerhouse Interpublic Group of Cos.

His firm formed a special group to collaborate with companies like TiVo on applications that will appeal to advertisers and consumers alike.

One example: a deal with TiVo to promote “Mr. Deeds,” a new Sony Pictures film starring Adam Sandler, by delivering trailers, behind-the-scenes footage and other special fare directly to subscribers.

It’s also exploring what to do with video-on-demand systems. Oscar said cable network Discovery Communications, which has several on-demand projects in development, wants to make sure viewers accept commercials as part of the video-on-demand experience.

“If you train people to expect no commercials, that’s all people will want to watch,” Oscar said.

TiVo users may often skip commercials, Keast said, but they don’t do it all the time.

During this year’s Super Bowl, viewers hit the “replay” button on the Britney Spears Pepsi ad more than any segment other than the winning field goal, Keast said.

“It really is not that consumers don’t like advertising,” he said. “They don’t like advertising that is not relevant to them or, worse, is not entertaining.”