The Critical 'I'

Read. React. Repeat.

Thursday, January 29, 2004

Should advertisers be fretting over the effectiveness of their message penetration in the age of ad-skipping digital video recorders and popup blockers? According to Forrester Research, they should indeed, with analyst Chris Charron characterizing the climate as an "advertising backlash". Pertinent highlights:

- Sixty million US households have signed up for the Do Not Call Registry.
- Fifty-four percent of online households have spam blockers;
- 20% have ad blockers.
- Personal video recorder households skip 59% of ads.
- Multitasking, especially among younger consumers, is sapping consumer attention away from advertising.

My own observations, item-by-item:

Do Not Call Registry - No shocker; I'm surprised the number isn't higher. The telemarketing industry's scorched-earth approach over the years--by alternately ignoring consumer requests to not contact, to insisting that they had a right to call households at will--not only made governmental intervention in this area inevitable, it also ensured a successful implementation. Telemarketers are now doomed to engage in petty court challenges until their business model totally dries up (at least, in the familiar telephone-call form).

Spam Blockers - I'd be interested to learn what sort of spam blockers they're talking about: Are these blocking methods the endusers manage themselves? Or are they built-in preventive measures that originate with their ISPs (and if so, was that feature a major inticement for choosing that Internet service)? In any case, it's obvious that spam has killed off the potential of email to be an effective advertising medium, outside of the porn- and pill-peddling professions.

Ad Blockers - That 20 percent seems about right, and will only increase as popup blocking becomes integrated into more browsers (notably Internet Explorer, probably by the end of this year). Like spam, popups are rapidly on their way out. I wonder if this includes other, more obscure programs that block ads that are actually part of Web pages.

Personal (or Digital) Video Recorders - This high percentage reflects just how big a selling point the ability to easily skip commercials is for acquiring a DVR. However, I'm not convinced this will continue to be the case as these boxes spread. To date, DVR users tend to be hard-core television and technology junkies; they enjoy spending time with this technology and actively using it. But the average, more casual television viewer is much more passive when watching TV; s/he is not going to actively hold the remote and take the effort (however slight) to forward through commercials every few minutes. As is now the case, the average household views television as something that provides background media that requires little to no interaction from viewers (most of the time). The bigger mainstream appeal of the DVR will be the ability to record programs and time-shift their viewing periods; skipping commercials will be a secondary concern.

Multitasking - There've always been multiple channels vying for the media consumer's attention; I'm not sure what the solution is other than spreading your advertising dollars to as many of those channels as necessary to reach your audience. Of course, multitasking doesn't necessarily mean that every task involves an advertising medium. But in cases where someone is watching television while Web surfing (as I'm doing right now with my notebook computer, and do on a regular basis), the best advertisers can do is to make sure their bases are covered, in broadcast, print, online and anywhere else.

Overall, I think the declaration of a "backlash" is an attempt at igniting some decisive action from the advertising industry. A lot of these factors have been around for a long time, albiet in different forms (for example, the remote control by itself is a long-established form of ad-skipping technology), and have been shown to have minimal impact.

One other thing jumped out at me: The built-in resistance within the industry to making lemonade out of these seeming lemons:

Cable operators, media companies, and marketers aren't ready to embrace dis-aggregation of audiences. Media buyers and sellers still value reach over relevancy.

This is the perpetuation of the idea that media consumption is a volume business: The bigger the audience, the better, regardless of the makeup of that audience. It makes a certain amount of sense, as mass market events like the Super Bowl rightfully pull in huge ad rates due to their broad reach. But this approach clouds the effectiveness of more precise demo targeting than previously possible. This is why the industry still clings to Nielsen's ratings, even while disputing the most recent shifts in them.