• by July 5, 2001

A recent cover story by Michael McCarthy in USA TODAY reported that digital video recorders (DVRs) such as TiVo may let consumers watch a show seamlessly without seeing ads. Some advertisers are embedding ad messages into, rather than around, TV shows to reach the consumer.

"The 30-second commercial as we currently know it is an endangered species," warns David Verklin, CEO of Carat North America. McCarthy says that this would be a good time for new ideas in the ad business. "Anywhere from 50% to 80% of TiVo subscribers skip over most of the ads," TiVo's Rebecca Baer reports.

Zenith Media's forecast of global media spending growth for 2001 was lowered this month to about 3% for $358 billion -- zero growth after inflation. Robert Coen, director of forecasting for Universal McCann, says the U.S. media market this year will have its weakest growth since 1991, with media spending up only 2.5% to $250 billion. As recently as December, Coen had seen 5.8% U.S. growth.

Seriously considered alternatives to TV ads, direct mail, public relations, database marketing and sales promotion are growing fast. Advertisers now spend an estimated 56% of their budgets on these "below-the-line" activities, says Amy Blankenship of the Direct Marketing Association. And Warren Weideman of Park Avenue Productions, Los Angeles, says, ''Product placement is a way to combat the threat of consumers not watching commercials." Some advertisers want to create T-commerce, where TV viewers buy products while watching interactive shows. Revenue from interactive TV sales will total $4.3 billion by 2005, Jupiter Media Metrix predicts.

But Bob Isherwood, Cannes jury president for both Film and Press & Poster, concludes that "TV is still the most effective advertising medium we have, by far."

Read the whole article here.