Study Finds Mixed DVR Effects

About 20% of Brands Experience Lower Sales in Ad-Skipping Households

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BATAVIA, Ohio (AdAge.com) -- Results of three-plus years of research by Information Resources Inc. into DVR vs. non-DVR households show purchase of new package-goods products in DVR households was about 5% lower than in non-DVR households for IRI's industry bestselling "Pacesetter" brands and that about 20% of all brands in the study lost statistically significant volume in households with DVRs.

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Source: Information Resources Inc., TiVo
Yet the results -- the first detailed findings released publicly under an agreement with a consortium of 25 marketers -- were far from disastrous for everyone. Some brands actually saw slight sales increases among DVR households, which, while not large enough to be statistically significant, at least suggest ad-skipping and widespread DVR penetration won't hurt all brands.

The data also suggests that even modest diversification of media plans away from TV can minimize or eliminate the impact of ad-skipping. Brands that spent 20% or more of their media budgets outside TV had no significantly lower volume in TiVo households than non-DVR households.

Largely as a testament to their more diversified media plans, non-food brands among IRI's top-selling Pacesetters saw no impact on new-product trial from DVR ownership. All of the impact was on food brands, which allocated more of their budgets to TV and saw new-product trial volume decline 7.5% in TiVo vs. non-DVR households.

Print pays
In one case, a marketer that made a mid-course correction during the study to shift funds from TV to magazines saw a near instantaneous improvement in results among the TiVo group, said J.P. Beauchamp, senior VP-panel and testing services for IRI.

While the data analyzed covered 18-22 months, Mr. Beauchamp said the period essentially captures the full impact of DVR usage. He said ad-skipping in a household tends to reach its peak and level off before 18 months.

Beyond shifting money to print or other media, the study suggests the TiVo effect can be blunted significantly just by shifting funds within TV. Marketers with fewer than 25% of their gross ratings points in daytime or more than 45% of their GRPs in cable had significantly less volume impact among the TiVo households.

Overall, IRI panelists watched 42% of the programming on CBS time-shifted, compared to only 10% on the Food Network and 18% on Lifetime. While 34% of programming originally airing on Fridays was time-shifted, only 15% of Sunday shows were.

As network executives have suspected, the study showed people were far less likely to fast-forward through network promos than ads– indicating that creative appeal does make a difference. More than 60% of viewers, for example, watched network promos in the first pod position at normal speed vs. fewer than 45% who watched other ads.

Direct-response loophole
As seen in other research, TiVo households did watch more TV shows than non-DVR households. But that still wasn't enough to eliminate the negative impact on sales from ad skipping.

Time shifting isn't necessarily a bad thing for programs, Mr. Juenger noted, because it can mean people are engaged enough to watch later. One reason direct-response ads get fast-forwarded less than others is that they air on low-rated programs where people are channel surfing, he said, not recording to view later when they can skip ads.

On the other hand, research has shown that when ads mesh with a program's subject matter, e.g., do-it-yourself fare on HGTV, they tend to get fast-forwarded less often.
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