TiVo Criticizes Their Remarks as 'Misperception'

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ORLANDO (AdAge.com) -- Two industry executives told the American Association of Advertising Agencies' Media Conference
Photo: TiVo
About 280,000 homes now have ad-zapping TiVo TV units.
today that TiVo's efforts to broaden distribution of its ad-zapping personal digital recorder (PVR) have been thwarted by poorly conceived marketing efforts.

TiVo strikes back
In response later in the day, a TiVo spokeswoman disagreed and said the speaker's assessments were based on "misperception."

TiVo is the 5-year-old maker of a digital video recorder that allows TV viewers to fast-forward through commercials. In order to succeed, the company must persuade large numbers of consumers to purchase and use the new technology in their homes.

Speaking as part of a 4As' panel today, Marc Favaro, vice president for national ad sales at cable giant AT&T Broadband, and Mark McLaughlin, a partner in Fuel North America, suggested that TiVo fumbled in its recent marketing efforts. Fuel is the integrated marketing unit of Havas Advertising's Messner Vetere Berger McNamee Schmetterer Euro RSCG.

Bad campaign?
The two panelists

Photo: TiVo
One panelist said you have to use the simple, commercial-skipping device to truly appreciate its potential impact.
said TiVo missed an opportunity when it launched a 2000 national TV campaign from Omnicom Group's Goodby, Silverstein & Partners, San Francisco, that focused more on humor than on explaining what the device can do and how it can simplify one's life.

"I think TiVo's messages to the consumer have been a little confusing," said Mr. Favaro, whose company is marketing a TiVo version to some of its customers. "They went out with 30-second spots that really didn't tell the consumer what they were about."

Ad money 'was wasted'
Mr. McLaughlin, who harbors both concern that the commercial-skippers could hurt the ad industry as well as optimism that they might lead to new forms of marketing, said of TiVo's outreach efforts: "The advertising money spent to explain it, in my opinion, was wasted."

However, TiVo spokeswoman Rebecca Baer said Messrs. Favara and McLaughlin are wrong.

"If you think about the fact that when people talk about PVRs, they talk about TiVo,

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then [the campaign] was a success. TiVo is the leader in the category," she said. "It's a judgement call but certainly, in terms of building brand and name recognition, [the campaign] was successful."

Advertising Age previously reported TiVo intended to spend $50 million on the campaign.

'TiVo' as generic term
Most observers agree that TiVo has become somewhat of a generic word to describe the group of PVR devices that allow consumers to skip ads, tape shows and thus replay them and even pause live TV. (A direct competitor, ReplayTV, is marketed by Sonicblue and the two have sued each other.)

"TiVo had to define a category and brand themselves at the same time," said Ken Ripley, an ex-TiVo executive, now vice president of Discovery Kids and Digital Networks at Discovery Communications.

TiVo, which has several media companies such as Discovery and NBC as investors, allows viewers to easily fast-forward through commercials; ReplayTV allows for them to be nixed entirely plus possibly swap content on the Internet, generating litigation by major media companies such as Viacom and AOL Time Warner.

280,000 homes are TiVoed
Estimates vary on the distribution of PVRs. TiVo has a subscriber base of some 280,000, a blip against

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the 105 million American TV households.

TiVo has recently altered its strategy to focus less on sales at electronics retailers and more on joint agreements with cable companies such as AT&T Broadband, which may soon merge with Comcast, and other technology vendors such as Sony and DirecTV. AT&T Broadband offers a dual TiVo/AT&T branded version to some of its customers.

Threat to advertisers
From the beginning, the devices have been a looming threat to advertisers. And the more that are sold, the more advertisers will have to grapple with the fact that their ads could be skipped, though previous devices such as the remote control and the VCR have also given viewers that option, though at a less-advanced level.

"My clients that don't have a PVR in their house are not worried," said Mr. McLaughlin, the agency executive. "My clients that do have it are very worried."

But there is hope that a sort of creative Darwinism will emerge in which viewers will want to watch appealing or informtive ads. TiVo said the part of the recent Super Bowl that its users replayed the most was the 90-second multi-generational Pepsi spot with Britney Spears. The ad was rewound more than the winning field goal in the final seconds.

With interactive capabilities, TiVo could offer viewers more promotional content if they request it. For example, a person shopping for a new car could be offered the chance to view a 30-minute, heavily detailed pitch.

Britney Spears example
TiVo also offers marketers, as the Britney Spears example illustrates, the chance to better gauge ad effectiveness -- which sparks viewer privacy issues. TiVo said it provides only aggregated, not individual, data.

In response, the Advertising Research Foundation's publications editor, Denman Maroney, said today that the group is beginning to draft a privacy policy detailing various aspects of data collected from the devices. He said six of the seven major cable companies have agreed to participate, though he declined to name the holdout.

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