You Can’t TiVo a Banner Ad

TiVo is changing the way people watch television. More precisely, it’s changing the way people watch—or don’t watch—television commercials.

According to a recent story in the Los Angeles Times,¹ approximately 6.5 million TiVo-like devices, called digital video recorders (DVRs), are currently in use in the U.S. And 70% of them are “routinely used for ... commercial avoidance.” Furthermore, the number of DVRs is expected to grow tenfold over the next five years. By 2010, “half the U.S. households with TV sets are expected to also have digital recorders.”

With figures like those, the advent of TiVo has serious implications for anyone who advertises on television. In fact, according to the Times, “the devices are threatening to bring the $60-billion-a-year TV advertising business to its knees.”

While no one expects to see the Budweiser Clydesdales retire any time soon, a number of surveys indicate that many national advertisers are planning to cut their TV ad spending by 10-20% over the next several years. And smaller, local advertisers, such as law firms, can be expected to follow suit. In fact, the smaller advertisers, whose ads are created with lower budgets and more modest production values, are even more vulnerable to ad-skipping than the slick, expensive ads of large corporations.

As advertisers, large and small, search for TiVo-proof places to spread their marketing budgets, a substantial portion of those advertising dollars are expected to find their way to the Internet.

Internet advertising has seen a steady rebound since the dot-com bust of 2000-2002. A special report in Business Week² magazine noted that Internet advertising was “galloping ahead” at an annual growth rate of 28.8%, compared to 7.7% for the ad industry overall.

What makes the Internet so attractive to advertisers, in addition to its audience, which grows steadily year after year, is the ability to target portions of that audience with much greater precision and measure the results of campaigns more accurately than with traditional media. Online advertising in FindLaw.com, for example, can be dynamically generated to reach Web users in a given geographical area while they are engaged in research on a specific legal topic. Users enter a postal ZIP code or metropolitan area when they begin their research, and ad placements appropriate to the location and legal topic appear automatically as the user pages through the site.

This type of targeted marketing enables law firms to reach exactly the type of clients they seek. It also enables clients to easily find the names of attorneys in their locality who practice in the area of law that they are interested in. Clients can then click directly from the ad into the law firm’s Web site.

The law firm can subsequently monitor traffic to its Web site to identify where visitors are coming from and determine which marketing efforts are yielding the best results. That kind of precision is available as a matter of course on the Web, but is virtually unknown for TV advertising.

If television advertising consumes a major portion of your law firm’s marketing budget, consider how technology could be affecting your return on investment. And consider devoting more of your resources to the Web, where your advertising is out of the reach of ad-skipping gadgets like TiVo.

¹Meg James, ”Looking for New Ways to Make Viewers Pay; The growth of ad-skipping devices such as TiVo has networks and advertisers scrambling for strategies to hang on to their revenue,” Los Angeles Times, January 18, 2005, pg. C.1

²Stephen Baker, “The Online Ad Surge,” Business Week, November 22, 2004