• by Douglas Quenqua , October 2, 2007

TiVo on Monday unveiled its latest attempt to endear itself to the advertising industry: the Interactive Direct Response Advertising Group, a unit that will help direct marketers better reach TiVo customers.

According to the DVR pioneer, consumers who can fast-forward past commercials are less likely to channel-surf. That means less viewing time for infomercials and other forms of direct-response TV, which owe a significant portion of their audience to viewers killing time during commercial breaks.

The new group will consult with direct marketing agencies to help them reach viewers in other ways. Carat, Mercury Media and Basco are listed as launch clients for the group.

"A major paradigm shift is underway in the television viewing habits of households with DVRs," said Karen Bressner, senior vice president of advertising sales at TiVo. "As viewers increasingly embrace TiVo to record, time-shift and fast-forward ... the amount of time spent channel-surfing has significantly diminished, directly impacting viewership numbers for infomercials and other direct response advertisements. We believe that our Interactive Direct Response Ad Group presents valuable, timely solutions for the direct response market."

Robert Barnett, former senior marketing consultant to Guthy-Renker, is joining TiVo to spearhead the new group. He will report directly to Bressner.

TiVo first reached out to the direct marketing community in 2005 with its Interactive Advertising Platform, which offers several tools that allow advertisers to engage viewers via the remote control and track their interactions. The platform won an Emmy award in 2007 for Outstanding Innovation and Achievement in Advanced Media Technology.

However, as TiVo faces declining market share among DVR users, it remains to be seen just how valuable the direct marketing industry will consider such offers. According to the Carmel Group, an industry research firm, while the number of DVR households in the U.S. continues to climb, TiVo and other third-party DVR manufacturers will see their combined market share shrink from 4% in 2007 to just 2% by 2010.

TiVo has taken numerous steps in recent years to build bridges to the advertising community in general, which has long viewed the company's ad-skipping service as a threat. In May 2006 Tivo launched Product Watch, a service that offered viewers long-form ads, like product demos or branded entertainment, from marketers including Kraft, Lending Tree and General Motors. Shortly after, TiVo debuted Product Placement, which lets advertisers place commercials at the end of recorded shows.

In February of this year, TiVo launched Stop||Watch, a ratings system that provides second-by-second program and commercial ratings for both live and time-shifted viewing. The Interpublic Group was an initial customer of the service, and others such as MDC Partners' Crsipin Porter + Bogusky and Publicis' Starcom USA have followed.