September 01, 2007

The Sky Is Not Falling

The popular press and the ad trades would have you believe that tv viewing is in steep decline, and that this steep decline is exacerbated by heavy DVR usage (TiVo, etc.) disrupting the traditional effectiveness of tv advertising.

The facts tell a different story.

If you read Nailed you saw how TAC used Nielsen data from November, 2006 to report that about 1.6% of total tv commercials are skipped because of TiVo-ing. Now there is new data from Leichtman Research Group confirming these numbers.

Leichtman reports in its research that about 20% of households have DVR’s and that they time-shift about 16% of the time. This means that 3.2% of total viewing is time-shifted (16 percent of 20 percent.) Several sources, including The New York Times, tell us that when time-shifting, viewers skip commercials about 50-60% of the time.

This means that about 1.6 to 1.9 percent of commercials are being missed because of time-shifting -- right in line with the numbers TAC developed from Nielsen’s figures.

Marketers also keep misinterpreting what is happening with viewing patterns. Because individual shows are getting lower ratings, they think that tv viewing is down. In fact, household tv viewing has increased 7% in the past 5 years. What’s happening is that there is a growing pie and the networks are getting smaller slices.

When it comes to viewing tv commercials, in the past 5 years the positive effect of more tv viewing is 3 to 4 times the negative effect of TiVo-ing.


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