McKinsey Urges Cooperation With TiVo

If you can't beat them - and you can't - then join them.

That's part of the advice from a recently published McKinsey & Co. report on advertising and marketing in a post-TiVo world, a special edition of The McKinsey & Co. Quarterly. It's no surprise that TiVo and other technologies could change the way TV advertising is viewed and delivered. The change is happening slower than expected but commercial-zapping technology could be in half of U.S. households in five years. McKinsey principal Michael Zeisser says advertisers should put all their eggs into the TV basket and start branching out into the technology that they fear so much in an effort to stimulate sales.

"Companies must find a way to use interactive media - TiVo-like technology, the long-awaited interactive TV, and the Web - to rethink their on- and off-line interactions with consumers and thereby devise more effective ways of reaching target audiences," Zeisser says.

The focus on interaction reflects today's (and tomorrow's) realities, Zeisser says. To reach today's consumers who have unprecedented control over their media, advertisers have to give them more for their time. But that type of advertising - such as the advertorial blend of content and selling that's becoming popular among personal video recording services - costs a lot of money. He counsels clients to know their goals and use different tools to reach those goals in ways that reduce inefficiencies and redundancies.

Interactive media like the Web and interactive TV may work better, he says. Zeisser says too many advertisers expect the 30-second TV spot to achieve their goals. "Is it really effective to use 30-second commercials to remind shoppers that they should buy spaghetti sauce on their next trip to the supermarket? Wouldn't a banner ad served up at the office at the end of the working day fufill that goal more effectively and cheaply," Zeisser asks.

Zeisser also counsels the use of a new paradigm, integrating advertising, call centers and retail outlets in an effort to maximize spending. "These innovations must be built around finding the right tool for the right interaction with the right customer at the right time," he advises.

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