TV advertising's DVR challenge

Networks, advertisers look for creative ways to mix content and commercials--and combat the commercial-skipping epidemic. Images: Networks, advertisers get creative

This September, AOL and Mark Burnett Productions will launch "Gold Rush," an interactive game that asks players to monitor CBS television programs and commercials for clues to find $2 million in gold.

The game will last for approximately the first two months of the fall television schedule, according to a CBS representative. Clues will be scattered throughout CBS television programs, commercials, the AOL Web site and other media properties, AOL said.

The game could be a sign of a new tactic in the television advertising battle. As TV show downloads and ad-skipping DVRs pull viewers away from live advertising, the networks must find new ways to draw them in. The solution may be low-tech creativity: constructing new blends of advertising with content viewers are compelled to watch.

CBS isn't alone. Since May 3, ABC has featured fictitious ads for the mysterious "Hanso Foundation" during commercial breaks of "Lost." Viewers who stayed tuned during commercial breaks were rewarded with "ads" featuring phone numbers and Web sites leading to clues about the show.

The clues are part of the "Lost Experience," an alternate-reality game deployed globally in various languages via TV, the Internet, print media and phone. The game's breadth of distribution forces fans to translate for one another and share clues in order to advance discovery. The story line comes strictly from the writers of the show. But the idea for the game was a creative and commercial endeavor that came from a collaboration between ABC Marketing and "Lost" executive producers Carlton Cuse and Damon Lindelof, according to an ABC representative.

"Over the next 12 months, we'll continue to see experiments (in content placement) like this," said Todd Chanko, a JupiterResearch analyst who recently released a report on television advertising. "This is about consumer re-education. We are re-educating people on how to watch TV with their DVR, if you fast-forward without paying attention, you will miss some juicy content, or a possible coupon as in the case of (a recent KFC commercial). More and more commercials will be loaded with features."

Broadcast networks, which base their advertising revenue on ratings, among other things, have been closely monitoring the situation as more and more households buy DVRs or switch to on-demand content for entertainment. As this happens, advertisers are looking for other ways to place their bets.

Undermining the 30-second spot
About 60 percent of advertisers said they plan to decrease their budget for conventional commercial spots as DVRs increasingly become standard accessories in households, according to preliminary research findings released in March by the Association of National Advertisers and Forrester Research.

Images: Networks, Advertisers get creative

"Almost 70 percent of advertisers think that DVRs and video-on-demand will reduce or destroy effectiveness of traditional 30-second commercials," the report said.

Networks have been experimenting with online sales of downloadable shows, both with and without commercials, with some degree of success. But even those offerings have to be marketed. While some downloadable shows attract an audience without conventional network television exposure, most rely on standard TV promotion to spark interest. Networks also still need a way to hold on to television advertisers, the revenue model on which the networks' local, affiliate stations depend.

Of course, not every show lends itself to clue-spottings and contests, so networks are experimenting with still other types of content placement.

NBC's popular sitcom "The Office," for example, put together fake public-service announcements that mimic NBC's own "The More You Know," a series of PSAs featuring actors, writers and directors delivering the messages. Because "The Office" PSAs so closely resembled actual PSAs, viewers did not realize they were fake until the announcement series took a bizarre, humorous turn. The fake PSAs also can be viewed for free on "The Office" Web site. An ad streams silently next to the video while you watch it.

In this case, an advertiser who places a spot next to the online version of the PSA can claim at least one advantage over the advertisers flanking the same PSA on television. Thanks to online tracking software, it's relatively easy to obtain demographic information on the viewers who click on the online PSA video, while the television advertisers flanking the same PSA during a commercial break have much less precise information about who was reached. The ANA/Forrester report found that 97 percent of advertisers wanted better measurement of audience viewership for actual commercials, not just a TV program ratings system.

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