TiVo Adds Features to Make Advertising More Interactive
WALL STREET JOURNAL ONLINE NEWS
July 18, 2005 10:02 a.m.
http://online.wsj.com/article/0,,SB112168702272488208,00.html?mod=home_whats_news_us
Digital video-recording company TiVo Inc., famous for helping customers
skip commercials on their favorite television programs, is taking steps to
encourage viewers to watch them.
TiVo, based in Alviso, Calif., announced plans to insert symbols that
identify advertisers during commercial breaks, making them more visible
even when a customer is fast forwarding through them. Advertisers who
sponsor TiVo's "ad tags" can include additional graphics, such as their
corporate logos, to the pop-ups. Moreover, the pop-up tags now will be able
to lead viewers to additional content, such as infomercials, movie trailers
and even mailings.
The company said General Motors Corp. and the WB Television Network will be
the first to use the new features. Starting this week, TiVo users who see
GM's commercials for OnStar, GMC, Chevrolet or Saturn will see a branded
pop-up tag that leads them to special promotional footage or lets them
request additional information directly from GM. Viewers who want to follow
through won't need to press more than a few buttons or type in their
addresses or phone numbers since TiVo already has them on file and can
supply them to GM.
But encouraging TiVo customers to download ads could be a tough sell,
analysts have predicted. People subscribe to TiVo's service, which allows
customers to make video recordings of their favorite TV shows, precisely to
avoid commercials.
The new commercial strategy is the latest attempt by TiVo to generate ad
revenue for the company, which has yet to turn a profit since its founding
in 1997. TiVo said it developed the new features in response to feedback
from advertisers. "This is an important growth area for TiVo. These sorts
of products are what will get us there," said Kimber Sterling, TiVo's
director of advertising and research sales. TiVo's enhanced advertising
functions will let it accommodate more advertisers, he added.
The company hasn't divulged how much it has made from advertising, but has
emphasized its growing importance. TiVo's focus on advertising is in stark
contrast with earlier fears that the company's technology -- which lets
viewers skip over commercials -- would make traditional TV advertising
irrelevant. TiVo has capitalized on its interactive abilities to create
advertising that's more targeted. It also has highlighted its ability to
track viewer response to commercials and programs in more detail than
traditional TV ads. The company can combine user data as detailed as how
often viewers rewind or fast-forward through a particular scene in a show
or commercial. These functions make it easier for advertisers to see how
their investment is paying off, TiVo says.
Despite the company's loyal following of 3.3 million subscribers, TiVo has
labored to increase its subscriber base. In its first-quarter report in
May, TiVo reported a loss of $857,000. The company has said it expects to
reach profitability in the fourth quarter.
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George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923 Fax: 713-743-3927
antunes at uh dot edu
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