US Study Reveals Ad Agencies Lack Key Information on DVRs

4May09

Digital Video Recorders seen as biggest threat to TV advertising effectiveness

According to a recent study, Advertising in the DVR Age (available on www.DVRresearch.com), advertising executives believe DVRs represent the greatest challenge for TV advertising in the next three years. The study was conducted by the DVR Research Institute and was be released on May 1.

Surprisingly, these research results indicate that neither the advertisers nor their ad agencies are confident they have the information they need to make adjustments in advertising strategy to address the impact of DVRs. This is despite agencies identifying DVR’s as the biggest threat to the effectiveness of TV advertising, ahead of the Internet

Nearly 75 percent of the respondents “somewhat” or “completely disagree” that they have all the relevant information about DVRs and their impact on TV advertising.

What may be surprising is that all the respondents manage aspects of TV advertising and about 90 percent of respondents are directly involved in media planning or buying decisions.

What is most interesting, though, is that while – overwhelmingly – neither advertisers nor agencies think they have the information they need, a majority of both groups believe the other group is better informed than they are!

About 77 percent of the advertisers “somewhat” or “strongly disagree” they have the relevant information about DVRs to make strategy adjustments. Yet, more than half of the advertisers “somewhat” or “totally” agree with the statement that their advertising agency is well informed about DVRs and the impact they have on TV advertising.

Ad agency responses mirror those of advertisers. More than 68 percent of the ad agencies do not believe that they have the information needed to adapt their advertising strategy to the new DVR reality. Yet, almost 60 percent of the ad agencies think their clients are well informed about DVRs and the impact they have on TV advertising.

KEY FINDINGS INCLUDE:

Ad executives see DVRs as the biggest threat to the effectiveness of TV advertising, ahead of the Internet

Nearly half of the respondents have not made any changes to their advertising strategies because of DVRs over the past three years, but about 90 percent expect to make changes in the next three years

The number of skipped ads is expected to almost triple in the coming three years. Some programs (in particular some primetime broadcast programs) may see up to half of their ads skipped in DVR households

While brand managers consider their advertising agencies to be better informed than they are, advertising agencies think the same about their clients.

Advertising executives expect to reduce spending for TV advertising by 10 percent in the coming three years; however, not all formats are equally affected.

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