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November 06, 2006

Blog 9 - Will DVRs Eliminate Political Advertising?

The upcoming mid-term elections have caused candidates to spend record sums of money on spreading their messages. Their most popular tool is TV ads; however, the recent technological breakthrough of DVRs might eliminate these commercials in the future ( click here ).

Advertisers are aware that most people dislike these ads; furthermore, most people find them annoying and uninformative. Why are they still used? The answer is simple: they are still economical. Although, bothersome and irritating these ads still increase candidates popularity in a manner that is worth the large amounts of money that is spent on them, at least that is what analysts say.

According to market penetration surveys only 10 million out of 110 million households own some sort of DVR, where TIVO is the most popular brand. Currently, marketers regard this segment group as a niche and insignificant in relations to the upcoming elections. However, this new technology has been increasing fear for the near future among marketers.

Surveys(click here) show that three-quarters of advertising leaders believe that the digital video recorder (DVR) ad skipping technology will have a dramatic effect on the landscape of TV advertising. Furthermore, they believe that this might eliminate the traditional 30 spot ads.

Figure – Tivo is the DVR market leader with market share of 30%-40%.

Marketers regard product-placement as the next revolution in advertising. TV producers will incorporate ads within the show itself. This will allow marketers a more subtle way of pushing their products to consumers. However, how will political campaigns be advertised if the conventional ads will disappear?

There are many speculations regarding the next generation of political campaigns. Some people believe TV shows and movies will be sponsored by politicians. Others consider this change as the end of political ads on television.

We believe only time will tell what will be the faith of political advertising on television. The only way, to our perception, of political ads remaining on TV is a change in their essence. People are not interested in political bickering or bashing. Moreover, people are interested in clear concise and straightforward messages. If politicians will continue using spin tactic and refrain from dealing with serious issues then people will fast forward their ads. However, if they will change their tactics and send messages that people would like to listen to, there is chance for these ads to remain economical.

As for products placement for political campaigns, we do not think it will happen. If it does, it will hurt Hollywood's credibility in the eyes of the public. The thin line between entertainment and politics should be kept and is beneficial to both sides. The combination of the two will only hurt TV shows and the politicians themselves.

Posted by orshotan at November 6, 2006 03:55 PM


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