"A year ago, we never would have done a deal with ads which would have introduced into our programming the opportunity for the viewers to leave the live program and enter into the world of time-shifted viewing. That would have worked against" the old model of TV consumption, said Mike Pilot, NBC Universal's president-sales and marketing. But with a recent shift to paying for TV ads based on commercial ratings, not those of TV programs, he said, networks are paying more attention to new ad formats that can entice viewers who have more control over their TV-watching experience.
Such a deal allows not only new ad formats but also measurement of consumer reaction -- whether viewers who opt in are more engaged in ads they choose to see, Mr. Pilot said.
Details of the deal
As part of the agreement, NBC Universal's 14 TV networks and 10 NBC-owned and -operated TV stations will be able to sell TiVo's interactive "tags," or onscreen icons viewers can click to see longer-form commercials, in combination with other NBC products. NBC Universal also will subscribe to TiVo's StopWatch commercial-ratings service, which gathers second-by-second information on how TiVo viewers watch programs. Under the partnership, TiVo and NBC Universal will work together to develop additional advertising products and will share revenue where appropriate.
Ad firms including Publicis Groupe's Starcom USA, Interpublic Group of Cos. and MDC Partners' Crispin Porter & Bogusky use TiVo's second-by-second data, but NBC Universal is the first group of TV networks to do so.
Even though many networks agree that about 60% consumers who use TiVo or other DVRs to watch TV skip the ads, NBC Universal has been vocal in recent months about getting credit for the viewers who do stick around. In recent months, NBC and a company called Innerscope tested a vest that monitored a viewer's sweat, heartbeat and movement in an effort to show that consumers react to sped-up ads.
Proving ad effectiveness
The deal with TiVo also comes as more advertisers are looking for hard data to prove that TV advertising is effective. Once content to post 30-second spots on air, marketers have been forced to quantify the results of TV commercials, as technology allows viewers to watch programming on demand. NBC recently has experimented with the positioning of ads in its commercial breaks, and Mr. Pilot said the TiVo agreement "is another experiment we are doing for research, for learning, for insight into what kinds of ad formats are going to be most effective in the future."
Mr. Pilot said NBC Universal would begin offering new ad formats to existing clients, use the TiVo pact to drive new business and make the TiVo capabilities part of packages in next year's upfront market.
For TiVo, the pact is part of a larger effort to make the company more attractive to advertisers, who are horrified by the way its popular machine allows consumers to blow past commercials that are expensive to create and place in media outlets.
James Hibberd is a reporter for TV Week.