Odd coupling: PVR, ad biz

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Personal video recorders: Madison Avenue's best friend or worst enemy? The advertising world isn't taking chances with these watch-TV-your-way set-top devices. As Ad Age reported last week, makers of these "time-shift" appliances are trying to play nice by embracing an ad-supported business model after taking on advertisers and agencies as investors. The result could well be a crippling product benefit muddle.

As an ad-delivery vehicle, PVRs, which record programming on a hard drive and track individuals' viewing preferences, hold enormous appeal for marketers seeking more effective ways to target consumers. What marketer wouldn't want in on the action when Forrester Research projects 14 million people will own PVRs by the year 2004? That's fine for advertisers, but what about likely PVR customers who see the PVR as a high-tech ad zapping tool?

That the folks behind ad-zapping devices are proposing ways to zap ad messages back into programming is no surprise. Their financial backers now include ad-supported media companies such as Walt Disney Co., CBS Corp. and NBC (backing TiVo) and ad agency holding companies such as Grey Global Group, Interpublic Group of Cos. and Omnicom Group (among a dozen companies, including major media owners, that recently invested $84.9 million in TiVo rival ReplayTV).

TiVo says it will announce several options shortly, including an ad-switching process that will allow charter sponsors to zap out TV spots carried in the original TV broadcast and zap in targeted ones to PVR-equipped home TV sets. A list of participating sponsors is forthcoming. And start-up Jovio says it will insert 60 seconds of advertising for every 30 minutes of programming. The twist: broadcast ads purchased in specific programs would be stripped out and replaced with advertising sold by Jovio. Expect plenty of static over copyright issues.

So what kind of bedfellows will advertisers, agencies and PVR marketers really make in the long run? True, PVRs may pave the way for a truly personalized and interactive experience--for consumers and advertisers alike. And time-shift viewing, with or without the ad-zapping, could develop a mass appeal that one day exceeds that of the videocassette recorder's.

On the other hand, in their zeal to be all things to ad haters and advertisers alike, PVRs could find themselves becoming about as useful as a VCR in a world without videotape.

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