• by December 7, 2004

IT'S TOO BAD NO ONE HAS FOUND A WAY TO RECORD THE NEXT EPISODE OF THE DIGITAL VIDEO RECORDER BUSINESS -- Because then we could fast-forward to find out which of the many predictions about their impact on advertising prove to be most accurate. Meanwhile, two very different pieces of research released this week suggest that despite all the dire predictions about the impact of DVRs, marketers apparently have little to fret about, at least not in the near term.

One of the studies, a survey of national marketers conducted by the equities research team at Madison Avenue savvy Wall Street firm Merrill Lynch, found that only 19 percent of ad executives are making changes to their marketing plans or are testing new marketing initiatives as a result of DVRs. Despite such seeming complacency, the Merrill Lynch team predicted, "We would expect this to increase as [DVRs] gain market share over time."

But the second piece of research, results of an ongoing tracking study of DVR households by CBS research czar David Poltrack, suggests there may in fact be a need for marketers to change the way they think about DVRs. But that change should be a in a positive direction.

The research, based on a day-after recall study of 734 DVR households, found that they tend to watch considerably more TV - especially prime-time TV - than non-DVR households. On average, the DVR households reported viewing 1.58 hours of prime-time programming per night vs. the only 0.9 hours Nielsen estimates the average U.S. household watches prime-time.

While Poltrack acknowledged the study wasn't scientific enough to treat those statistics as gospel, he said, "It is clear that DVR owners are watching a lot of programming."

As it turns out, he said, they are watching a lot more of some of the top-rated prime-time shows, such as "CSI" and "Desperate Housewives," but also some lower-rated programs, including "Gilmore Girls," "Star Trek: Enterprise" and "The Daily Show."

This higher propensity to view TV would be a very encouraging finding, except for the fear that some marketers have that, no matter how much people may be watching TV, they likely are not watching their commercials when they play the shows back on DVRs. At least, that's been the conventional wisdom. The really significant part of the research revealed by Poltrack this week is that it shows significant recall levels for ads the DVR users fast-forwarded through. According to Poltrack, the recall levels were "comparable" to what people have when they watch commercials via conventional TV broadcasts.

"To fast-forward through an ad a viewer must be attentive to the screen," noted Poltrack, adding, "The actual ad impact could be enhanced." At the very least, he said, "There is unquestionably some value."

Poltrack noted that these findings are consistent with a "growing body of research," including a study conducted recently by InsightExpress and MediaPost that found viewers do pay attention to ads when they are fast-forwarding through them.

In the end, Poltrack said he believed the net effect of DVRs would be to create "substantially more advertising value," not to diminish it.