Digital video recorders do not change shopping behavior

Dec 09, 2010

Watching a television show from a digital video recorder (DVR) gives viewers a chance to skip commercials, but new research finds that owning a DVR does not influence the demand for advertised products despite its ad-skipping feature.

In fact, only a small percentage of ads were fast-forwarded by DVR users who participated in the study, and even that did not have an adverse effect on sales.

The research was conducted by Jean-Pierre Dube from the University of Chicago Booth School of Business, Bart Bronnenberg from Tilburg University in The Netherlands and Carl Mela from Duke University.

Previous reports have found and predicted significant ad skipping by DVR users, which led many to question the future of advertising on U.S. network television. "Contrary to conventional wisdom, DVRs may not present a threat to network advertising," the authors said.

The research, in the December issue of the , analyzed the results of a large study conducted by Information Resources, Inc. and a group of consumer packaged goods manufacturers. Participating households were given a , which is a popular DVR in the market, and a subscription to use the service. TiVo provided the data on how households used the recording device. This data was then matched with each household's products did not significantly change two years after receiving a DVR. Households did not shift to store brand alternatives, even among the most intensive DVR users. Moreover, there was no effect on sales of recently launched brands, which typically gain the most from television advertising.

A potential explanation for the lack of a DVR effect is that households do not watch most of the shows they record. Even if ad skipping rates are reportedly very high, a relatively low rate of watching recorded shows means that there is effectively only a small reduction in exposure to ads, perhaps too small to make a difference in households' shopping behavior. Indeed, the authors found that only five percent of the shows that watched were viewed after they were recorded.

There are additional possible explanations for the lack of a DVR effect. It is quite easy for viewers without a DVR to avoid watching a commercial by channel surfing or leaving the room, so those who watch a live program do not necessarily watch more commercials. Moreover, because DVRs allow people to watch their favorite shows in their free time they can potentially see more ads than otherwise, which further offsets any adverse effects of DVRs.

Another possible explanation for the lack of a TiVo effect, the authors say, is that television advertising may not have a discernible impact on sales in the first place.

Previous studies also have noted that DVR users tend to be more attentive to commercials when they are fast-forwarded even if viewers cannot hear what is being said, which suggests that the impact of fast-forwarding ads on sales may not be equivalent to commercials that are not seen at all.

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User comments : 5

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wiyosaya
not rated yet Dec 09, 2010
"Another possible explanation for the lack of a TiVo effect, the authors say, is that television advertising may not have a discernible impact on sales in the first place."

That fits my wife and I perfectly. We have a DVR, and we do skip commercials.

That said, we would buy nothing of what is advertised in the first place. Most of it simply does not fit our lifestyle, and much of it is "advertising." That is, my wife and I see most of it as marketing glitz selling bling that is not likely to meet marketing induced expectations. I am probably more likely to shy away from a manufacturer who advertises in that manner than I am likely to buy any of their products.

IMHO - the whole ratings/marketing/advertising game is something about which the industry has no clue. I used to watch quite a bit of Canadian TV, and when I did, I always found their advertising significantly less pandering than US advertising. Perhaps, US marketers could learn a lesson from the Canadians.
alq131
not rated yet Dec 09, 2010
Moreover, there was no effect on sales of recently launched brands, which typically gain the most from television advertising.
Another possible explanation for the lack of a TiVo effect, the authors say, is that television advertising may not have a discernible impact on sales in the first place.

My thoughts exactly...somehow advertisers are willing to pay, and TV willing to charge for a service that has little or no discernible value. Wish I could market a product like that.
lebooo
not rated yet Dec 09, 2010
ads are annoying to me so I avoid buying things that are advertised on tv... also, I never see ads for anything that someone might "need," only luxuries and impulse buys.
CSharpner
not rated yet Dec 09, 2010
only a small percentage of ads were fast-forwarded by DVR users who participated in the study

WOW! Since I've had a DVR (about 2 or 3 years now), I see almost no ads. I hit the "skip forward 30 seconds" button about 6 to 8 times and don't see but a frame or two of the ads. I find the next segment of the show in about 4 seconds or so. I recently started noticing that I really don't see ads as people have been talking about new shows and products that I'm completely unaware of. I almost never watch anything "live" anymore because commercial breaks are so long they literally induce pain and before the show comes back on, I've usually forgotten what was going on, and in some cases, what show I was watching. I can't watch TV without a DVR anymore.

I believe the theory about the ads not having much of an impact is probably the most likely cause of the effect. When I shop, I only go when I need something and only buy what I need. Almost never do I look for something I saw on TV.
Quantum_Conundrum
5 / 5 (1) Dec 09, 2010
Yeah, I virtually never buy anything based on whether it was advertised on television, and just like some others here, the fact that somethine was advertised on television is actually likely to make me suspicious of it's quality.

I almost never watch anything "live" anymore because commercial breaks are so long they literally induce pain and before the show comes back on, I've usually forgotten what was going on, and in some cases, what show I was watching


Absolutely true. I've experienced this too often. It's why I hardly ever watch television any more. I'd rather just fool around on the internet, or play a video game or something, instead of being completely brainwashed or else aggitated by the propaganda engine on television.