The PVR problem was highlighted early in the day, when it was mentioned that one million TiVo and Replay systems will be in use by next year and they will be in 42 million homes by 2006, according to Forrester Research figures. It was said that if the systems eliminate commercials from regular viewing, they could eliminate commercial TV, too, since the shows are ad-supported.
In the meantime, "advertisers are terrified by the deep penetration of PVRs," according to Garth Ancier, executive vice president of Turner Broadcasting System, who spoke at a morning session. Carole Black, president/CEO of Lifetime Entertainment Services, said, "advertisers will be up to the challenge, since advertising is always ahead."
The ways advertisers are ahead were displayed in an afternoon session, "Television's New Frontiers," when advertiser and agency executives described some of their latest innovations. Johnson & Johnson is using Gemstar interactive program guides and enhanced advertising from Wink. The program guides, which have been used for Neutrogena, have been instrumental in allowing J&J to target the iTV market. Gemstar has 15 million users. Wink's 4.5 million users see ads that can be clicked like a website for immediate action. J&J received requests for 15,000 samples of Immodium Advanced after playing a spot on Wink last month.
J. Walter Thompson also used Wink in the No Boundaries campaign for Ford Explorer. The enhanced spot achieved "greater efficiencies compared with traditional media," according to Christine Toth, J. Walter's emerging media manager. A Wink spot that ran for a month was rated 130% higher than traditional media, she said.
The problem with Gemstar and Wink is low distribution. David Adelman, J&J's director of media futures and innovation, said they need more impressions to sell and a better way of measuring the value of the responses to make them more valuable for advertisers. But he, too, said they achieve greater efficiencies than traditional media.
BMW is dealing with the problems of traditional TV advertising by moving away from it altogether. It uses short ads to promote a website, Bmwfilms.com, where short films by famous directors that feature BMW cars are shown. Tom Stepanchak, BMW's marketing communications manager, showed an exhilarating film by Guy Ritchie that starred Madonna, who rode in back of a BMW and was ultimately thrown from it after the driver sped through city streets in an action film sequence. "The idea is to entertain, not advertise," Stepanchak said, but the films deliver a strong branding message, like TV commercials do.
Another way advertisers are overcoming the PVR problem is through product placement, where their products are shown in a variety of places outside traditional ads. The fragmentation of TV, the clutter of ads, the increased costs and the intrusion of PVRs prompt companies to use product placement, said Christopher J. Gagen, Coca-Cola's director of media services. Coke has used product placement in a number of TV shows, including NBC’s reality show Lost last fall; Young Americans on WB in the summer of 2000, and Santa, Baby, a holiday show for African Americans that ran last year and will again this year.
Telecom advertisers are major product placement users. Karen Milke, media director at AT&T, cited a few examples, the best being ABC's Millionaire, where contestants place lifeline calls with AT&T. AT&T receives a mention and its logo is shown on the show. Meanwhile, Verizon, one of its competitors, uses product placement frequently to show the Test Man, who continuously asks, "Can you hear me now?" with his Verizon cell phone in commercials. He appears during brief promos for TV shows that run during commercial breaks.
Early in the day, Dan Jaffe, executive vice president of the ANA, discussed the situation in Washington, where the industry is threatened by pending legislation that would restrict pharmaceutical advertising in a variety of ways: requiring Medicare patients to pay more for advertised drugs, providing incentives for generics and requiring more health disclosures in the ads. Jaffe called the proposed legislation a "censorship regime" and vowed to fight it. He also warned of coming legislation directed at food advertising that promotes unhealthy products like fast food and soft drinks. Proposed legislation is at the state level now, but federal may follow, he said.
Keynote speakers Aaron Brown and Peter Jennings, anchors at CNN and ABC, spoke about their experiences covering Sept. 11, which were interesting, but unfortunately had little to do with television advertising.