DVRs vs Online Video: Which Will Win the Battle for Consumer Viewing Time?

Jim Nail

Since the introduction of the DVR more than a decade ago, consumers have learned they don't have to conform their lives to broadcast programmers' schedules in order to watch their favorite TV shows.

Along come online sources like HuluPlus, or the network's own websites promise even more convenience: Get any episode of any show with no need to remember to record it. But adoption is hampered by the awkward viewing experience of the cramped screens of laptops, tablets, and smartphones.

Welcome to TV viewing in the Age of the Customer. Consumers want their favorite shows when they want them, on their preferred device, with little or no effort on their part.

Linear TV, DVRs and today's online viewing experience all fail on at least one of these dimensions. Viewers increasingly cobble together a mix of sources and devices to create this level of convenience, and each of these players vies to capture more of viewers' time by improving its offering.

In my new report, "How Online Video Will Challenge DVRs' Role," I delve into how these two sources of video entertainment vie to meet consumers' increasing expectations. DVRs have the advantage of incumbency, while online viewing offers greater flexibility.

Let the battle begin!

TV Advertising Goes Cross-Channel: Threat or Opportunity?

Jim Nail

I just wrapped up my report on the future of television: “Digital Disruption Rattles the TV Ad Market.” And, while I was interviewing and exchanging views with advertisers and senior TV industry executives, a clear and surprising find emerged…

I wasn’t surprised to hear visions of dynamically targeted ads to deliver the right message to the right household. Neither was I surprised by the dream of synching messaging on the living room screen to the screen in people’s hands. Nor was I surprised that many in the industry still want to shoehorn these new ad opportunities into the old Nielsen rating model of the TV ad market.

What surprised me was the general optimistic outlook that these new developments will bring even more dollars to the TV ad market.

For decades, talk of the impact of cable television, VCRs, DVRs, online advertising, etc. has usually predicted the end of TV’s reign as marketing’s most powerful medium. New technologies would sap advertising effectiveness and splinter the audience. New advertising opportunities would be more engaging and measureable than the soft branding of TV.

But the fact is, the opposite happened: TV is stronger and more important than ever. Even as prime time TV audiences have shrunk, fragmenting across hundreds of channels on the cable spectrum, the rest of the media landscape has fragmented and faded even faster.

But perhaps I should amend my statement that TV is more important than ever: something like “video entertainment content originally created to be broadcast on television networks is stronger and more important than ever.” As these programs find new audiences, on new devices, at new times in viewers’ lives, it creates opportunities for video advertising to draw more dollars and more advertisers to it.

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Digital Disruption Can Make TV Ads More, Not Less, Relevant

James McQuivey

Every few years we marketers think we have digital figured out. First it was websites, then it was about eBusiness strategy, then came social, and more recently, we're all about mobile. These are all good things, to be sure, but conquering any one of these – or all of them together – still misses the larger point: Digital disruption is bigger than any of them on their own, and it is nowhere near finished turning the marketing and advertising world upside down.

Consider the Super Bowl. Every year the big game captures more eyeballs and, along with them, more ad dollars. Some point to continued TV spend as evidence that people are in denial about the role of digital, as Adobe did with its clever spoof on Super Bowl ads this year. But note that some of the most prominent ads in Super Bowl 2013 encouraged an expressly digital component – from Budweiser's name-the-pony campaign to Oreo's crowd-pleasing Cream or Cookie campaign, tagged with "Choose your side on Instagram @OREO." The most elaborate of these was the Coke Chase, a Twitter-based real-time voting campaign that earned @cocacola nearly a thousand more Twitter followers on game day, according to Twittercounter.com.

These are worthy – and relatively cheap – forays into making TV ads more, rather than less, relevant in a digitally disruptive era. But these all miss the broader point about the power of digital. Digital won't just disrupt the way brands communicate with consumers, it will afford those brands the chance to build a direct digital relationship with those consumers. If they don't blow it, standing idle while someone else grabs that relationship first.

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Four Reasons Interactive Marketing Is Ready To Lead Your Brand

Nate Elliott

Brand marketers don’t spend much online. It’s been a long-time frustration for me, but it’s undeniably true: According to our most recent interactive marketing forecast, marketers in brand categories spend less than half as much of their marketing budgets online as marketers in direct response categories. Brand marketers also continue to spend a huge portion of their marketing budgets on TV.

I’ll be honest: Five or 10 years ago, this made sense. Although lot of us were shouting from the rooftops back in 2000 about the scale and power of the Internet, the truth is back then its scale and power were relatively limited. The majority of the population still wasn’t online, Internet usage averaged only a few hours per week, and the brand stories we could tell online were constrained by both tiny banner ads (anyone remember "half banners"?) and tiny bandwidth (broadband access, and with it online video and other rich creative, was years away from the mainstream).

In that environment, it made sense that TV was by far marketers’ most important channel for building brand. After all, it offered brand marketers by far the largest media opportunity (more total users, and way more total hours, than any other media channel) and by far the richest brand impact of any platform. Marketers would have had little choice even if they wanted it: 30-second TV spots were the be-all and end-all of how they explained the meaning of the brands, and all other channels — online, radio, print, outdoor, and everything else — were simply a chance to reinforce the messaging in the TV spots.

But the conditions that made TV the de facto heart of our brand messaging no longer exist. Today, interactive marketing is ready to lead your brand campaigns, for four key reasons:

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Guest Post: Michael Greene on How to Source Video Ad Creative

Nate Elliott

You may not know the name Michael Greene, but if you're a Forrester client or you read this blog regularly then you've certainly seen his work. As a researcher on our team, Michael produces some great research -- most notably on the topics of sponsorships and video advertising. Below, Michael shares his thoughts on one of our latest research topics, sourcing video creative:

Mgreene [Posted by Michael Greene.]

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Would You Buy Pre-Rolls For $1 Per Thousand?

Nate Elliott

Nate Elliott[Posted by Nate Elliott]

Ad Age ran a fascinating piece this week about how CPG giant Reckitt Benckiser shifted $20 million of their TV budget to pre-roll ads, and then relentlessly hammered publishers on price. According to Ad Age, Reckitt bought some pre-rolls for as little as $1 per thousand.

Granted, the economy is clearly taking its toll on in-stream ad prices. And big budgets always earn marketers volume discounts. But when you realize that even in this market most high-quality pre-roll inventory costs upwards of $30 per thousand, the prices Reckitt paid look incredibly low.

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Interactive Marketing Nears $55 Billion; Advertising Overall Declines

Shar VanBoskirk

I'm pleased to announce that Forrester's five year forecast is now complete and live on Forrester's site. It feels like this has been a long time in coming from my side too! Please see the full report for detailed explanations of the trends affecting overall marketing budgets and the growth of the channel in the forecast.

You may remember we previewed our forecast at Forrester's Marketing Forum at the end of April. If you cross reference this post to the one we posted as follow up to the forum, you will notice that the "% of all advertising spend" has changed. The absolute forecast is still the same, we just changed this calculation to make sure it was done in the same way as in years past. See below for the most recent release:

0,1590,144759,00

This research will certainly help marketers plan their channel strategies.

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NBC Universal Finds Olympic Investment Was Well Worth It

Shar VanBoskirk

I'm back with some details from those cases presented at the BIMA event I went to last week.

Nick Johnson the VP of Multimedia Sales for NBC Universal shared some great data and lessons learned from NBC's "ownership" of the Beijing Olympics.

He called the Olympics a cultural phenomenon -- and for more reasons than their presence in China and all of the political hullaballoo that brought about.  From a media perspective, the games brought about significant behavior change among American consumers:

76% stayed up late to watch events
48% changed their routine in order to watch events when they were on
36% delayed doing things in order to watch events

On top of the high volume of television watchers:
56 million unique users came to NBC's site to watch events, get content, see replays
NBC saw 12.3 million video downloads, AND it saw 16.4 million unique mobile users

Johnson's conclusions from the research NBC conducted following the Olympics:

1) Television can still be king.  The Olympics were hugely successful at driving a mass audience for NBC

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Is "Lost" class teaching students to avoid ads?

Shar VanBoskirk

WBUR, Boston's NPR news station ran a story this past Tuesday about a new Tufts University class studying the phenomenon of ABC's hit series Lost.  The class -- "The Future is Lost: The TV Series as Cultural Phenomenon" -- is part of Tuft's Experimental College, an undergraduate forum focused on pioneering innovations in education and faculty/student collaboration within the Arts and Sciences (which in addition to the "Lost" class also offers courses like: "Sabermetrics: The Objective Analysis of Baseball," "Ethical Leadership in Business," "Obesity and Children" and "Television in the Age of YouTube,").  The Lost course meets every Tuesday and Thursday evening this semester and is taught by a current Tufts Senior.

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Consumers As Media: How Far Will This Go?

Shar VanBoskirk

AdAge just announced Gino Bona, a sales exec out of Portsmouth, NH as the winner of the NFL's "create your own Super Bowl commercial" contest.  And the NFL is not the only sponsor of viewer-created commercials.  Chevy and Frito-Lay sponsored similar contests for their own Super Bowl spots.

Then last week the news broke about the entrepreneurial "J.P" who was seeking corporate sponsors to pay him to propose to his girlfriend during a Super Bowl commercial.  The notion of using consumers to create ads isn't new and clearly consumers are actively creating their own media.  But these last few stories got me to thinking:  What happens now that not only are consumers creating media, but consumer actually are media?  Reality TV is huge.  And I would bet most of us have some fairly close connection with someone who has been on a reality TV show (my ex-boyfriend was fraternity brothers with the guy who "won" ABC's second season of "The Bachelorette."). 

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