Commentary

TiVo Data Services: Better, Quicker, Cheaper, Doomed

I wish TiVo well with its new television ratings research service, but I find the trade press's coverage of the new service hopelessly naïve. "Coming Soon: A Horror Show for TV Ads" reads the BusnessWeek headline, correctly pointing out that the technology - a major improvement from the current (and infamous) survey methodologies - reveals that a great deal of ad spending is wasted on placements that never get seen.

But this new awareness of what placements would be in the best interests of marketers would be a "horror show" to TV media sellers only if the media buyers decided to use it. And liberal trade magazines tend to wax optimistic on the rationality of the markets. In point of fact, ad buyers remain unlikely to use the better TiVo numbers because they suffer from laziness, a blind self-interest and indolence.

TiVo does, in fact, provide data that would greatly help marketers make their media buys much more efficient. In the least, the data can act as a price bludgeon to be wielded against sales representatives all aquiver about how "valuable" their inventory is.

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But, more realistically, the media buyers do not get paid nor evaluated based on the efficiency of their purchases. Personally, there is little to gain from switching from Nielsen to TiVo. In fact, personally, there might be much to lose:

  • Negotiations with sellers will take much longer when sellers argue their case based on one set of numbers (presumably the happy, happy Nielsen numbers) and the buyers argue off of another set.

  • If they were to vastly increase their efficiency via new numbers, their previous deals would then appear incompetently managed. However you might think clients would approve of this, in the face of better efficiency, buyers almost always lose out, the new performance perceived as proof of previous guilt rather than improved work.

  • The simplistic data that current television buyers tolerate has the blessing of providing for simplistic analysis, which is cheap and easy for agencies to do.

  • The big data players have given the largest agencies, controlling the vast bulk of media spending, sweat heart contracts that give them a competitive price advantage over smaller agencies. Even though these deals do not give a great advantage, the agencies misperceive the deals to be even more special than they actually are, exaggerating the desire to protect their importance.

    Precedent tells us that the current market leaders in the media metrics field will find some small foible in the TiVo process - perhaps a narrow part of the data on which their methodology is weaker - and make that mole hill of a problem into a perceived mountain. A good candidate for this sort of market propaganda has already surfaced. It appears that the TiVo data reveals that certain types of shows (regular sitcoms, for instance) tend to suffer from a higher rate of audience ad skipping. This could well be a TiVo-introduced phenomenon, whereby those shows that are most likely to be TiVo recorded for delayed viewing would naturally be more likely to be viewed whilst skipping commercials.

    The final line of the old guard's defense will be suing TiVo for patent infringement. There are lots of silly patents in this space. With an average patent litigation legal bill exceeding $500,000, it matters little whether or not TiVo actually infringes on anyone.

    In the halls of the major ad firm media research departments, the analyses of which methodology proves most useful will be about as fair as a French figure skating competition. TiVo is the new American skater, too new and too naïve to have already bribed the judges. It might have technical merit, but the big agencies will stick with Nielsen for its je ne sais quois.

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