• by Joe Mandese  @mp_joemandese, August 27, 2003

In a surprise finding, media researchers are discovering it is the DVD player, not the dreaded DVR (digital video recorder) that is proving to have the greater impact on advertising. And so far, it looks like it will mainly be a positive one, at least for entertainment marketers.

More than half (55%) of consumers who rent or buy DVDs say they watch ads - usually movie trailers or promos - on their DVD players, finds the new study from Knowledge Networks, How People Use VCRs, DVRs and DVDs. David Tice, director of Knowledge Networks Home Technology Monitor, from which the report was derived, suspects the behavior is a "carry over" from most consumers' movie theater experience, but the finding suggests the rapidly growing base of DVD users may be ripe for other forms of advertising.

How much so remains unknown, but at least one of the study's subscribers believes the potential for advertising on DVDs is very limited.

"The big caveat is that people are looking at movie ads. Transferring that and saying, 'Gee, I could put a Coca-Cola spot on their and it will work just as well, probably isn't going to happen," says Jon Swallen, senior VP- director of media knowledge at Universal McCann.

In the end, Swallen says consumer acceptance of ads on DVDs will depend on how relevant they find the advertising content. In movie theaters or on DVDs, movies logically would be relevant, but even the mix of movie titles could be problematic, he says, noting, "You don't put a Disney G-rated movie on an X- rated DVD."

As for the acceptance of other consumer product ads, Swallen says more research needs to be done, but that intuition suggests their relevance may also be extremely limited.

"The consumer is the final arbiter in terms of relevance. Outside of movie related, or very closely related entertainment content, I don't think that consumers would give their implicit permission to do it. By implicit permission, I mean keeping their finger off the fast forward button," predicts Swallen.

Meanwhile, Swallen says there is a potential downside to the burgeoning DVD universe, which now commands 47% of U.S. households.

"If people are watching DVDs, then by definition, they are not watching advertising content," he notes.

But entertainment marketers, including TV networks, may have found a new best friend in DVDs.

"Like any media company we are paying close attention to the emergence of any on demand technology. I think this does take you by surprise," says Artie Bulgrin, senior VP-research and sales development at ESPN, referring to the DVD's "implications for advertising."