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AGENCIES WORK WITH TIVO TO FIGURE OUT AD ON-DEMAND MODEL

Many Are Interested In New Service, But Many Unanswered Questions

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NEW YORK (AdAge.com) -- By next spring, TiVo wants to be able to offer consumers the ability to view ads on demand. How that will happen and what kind of ad content will work are all under discussion with the four agencies working with the DVR service to make the proposed service a reality.

The service will use existing technology, essentially putting the same capabilities that allow TiVo’s 4 million subscribers to search for specific TV shows and movies to work sniffing out commercials containing particular content.

But just what product or service categories will cause consumers to seek out information in a TV format? That’s one of the key questions the group is trying to answer. Also to be determined is the design and function of TiVo’s user interface; the service’s pricing; and what sort of data viewers are willing to divulge to marketers from whom they’ve received content.

“The new product is important to helping us figure out the future,” said Larry Spiegel, principal at Dallas-based agency The Richards Group, one of the companies partnering with TiVo to develop the service. The others are Publicis’ Starcom USA; Omnicom’s OMD; Interpublic’s Magna, Initiative and Universal McCann; as well as Comcast’s Comcast Spotlight unit.

Each partner is brainstorming with clients on how the service should operate. One Richards Group client, GoRVing, a coalition of recreational-vehicle manufacturers, is committing part of its budget allocated for experimentation toward the project, Mr. Spiegel said.

Starcom USA’s 16 account directors are meeting with TiVo’s researchers to discuss advertisers’ concerns and desires from the service. “We all know that consumers with TiVo are skipping commercials,” said Tracey Scheppach, VP-video innovations director. “My hypothesis is that consumers don’t hate advertising, they hate irrelevant disruption. What I like about this is that we’re working to ensure that advertisers’ needs are being met.”

From a marketers’ viewpoint, on-demand advertising’s benefit is its trackability and measurability. “You know how many people watch, and for how long, and their demographic details,” Ms. Scheppach said.

The ad-search service’s pricing model, though, is not yet determined. “It could be based on a keyword search or pay-per-click,” said Davina Kent, VP-national advertising sales, TiVo. Added Ms. Scheppach, of Starcom USA, “I hope there’s a performance component, so that if your advertising is viewed, it will cost more, like Google. There’ll likely be an ability to buy up a search, also like Google.”

One of the biggest hurdles TiVo and its partners have to clear in developing this is creating something that will change viewer behavior. TV is essentially a passive medium, notes Allen Banks, exec VP-North American media director at Saatchi & Saatchi. “Are viewers going to use it to seek out information when they can go to magazines or newspapers? I’m interested to find out whether people will take action to watch TV commercials.”

Paul Woidke, VP-technology at Comcast Spotlight, agrees: “The biggest part of our challenge is going to be adjusting to a new environment. How are we going to teach people that now the things they’ve searched for are not an interruption in their lives? [Agency] creatives, for so long, constrained to work within the confines of the 30-second spot, now are going to think about what they’re saying in a whole new way.”

The potential for TiVo is the creation of a source of advertising revenue beyond what it generates from its Showcases, which are media options for long-form ads sold by TiVo to marketers in one-week increments. Three different Showcases are available at any time; subscribers select one by clicking an option on the main menu of their TiVo screen. The long-form ads are available seven days a week, 24 hours a day for the buy’s duration.

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