5. Ads will start working for you
A few months ago, according to Advertising Age, Bob Jeffrey, the CEO of J. Walter Thompson, "predicted that companies that today spend 70 percent to 80 percent of their advertising dollars on network TV will allocate just half that much five years from now."
Ouch.
The panic among advertisers and the broadcasters, as it sinks in that millions of folks are using DVRs to ignore the $60 billion worth of ads on TV, is palpable. "There's still time to head off Armageddon," counseled one typically cheery article in a recent issue of the trade magazine Broadcasting & Cable.
But not all the news is bleak. CBS' research, Poltrack says, shows that people who use their DVRs to fast-forward through ads are still able to recall some of the ads they sped through.
"In the process of fast-forwarding, they were committing their attention to the screen, and they do see the commercials go by," he says.
Viewers are already seeing a wave of ads that address the DVR fast-forwarding crowd: There are more ads now that feature large logos that stay on the screen for several seconds. And there are ads that are so bizarre and disjunctive ("Monkeys? In an office? What?") that even the most committed of fast-forwarders have to go back and take a second look.
But for the most part, advertisers realize they have to change their game. The days of blanketing the three biggest networks with a blizzard of ads and thereby reaching the majority of sentient adults are over.
And, oddly enough, the DVR may end up being the advertiser's friend.
"The advertising industry is increasingly interested" in using DVR technology to better reach consumers, Ramsay says. "They're looking to the DVR to take advertising to the next level. [With DVRs,] you get much more flexibility in the kind of promotions you can do -- you can send specific promotions to specific areas, it's targetable, it's also measurable. You can tell the advertiser how many people" clicked through an on-screen button to get more information about a product.
Bartos says the new ad technology that will arrive in the next couple of years will be a boon to both advertisers and consumers. Consumers might be able to watch a cooking show sponsored by Kraft and have a chance to click certain buttons to get coupons or recipes. Interested in that Ford truck? Hit a button and watch a short film about it. Even if you're fast-forwarding through an ad, you'll still be able to click the button advertising extra stuff.
Getting consumers to opt in voluntarily is the key, ad execs say; the future of TV advertising is in providing a gateway to more comprehensive information.
"It's about getting people's attention -- to the point that you can direct them to other information about a product" via a Web site, a phone number or a short film, according to Paul Rand, a managing director at Ketchum, a public relations firm that consults with various blue-chip advertisers and marketers.
But in the near term, two big changes are coming to the television networks. First, broadcast networks may start charging cable and satellite providers to carry their content in order to offset the decline in advertising. Second, shows themselves are going to contain ever-increasing amounts of product placement.
"ABC had an episode of `According to Jim' where the whole thing took place in an Olive Garden," Bartos notes. And advertisers are getting involved earlier and earlier in the process, and might, as in days of old, be the sole sponsor of individual programs.
"It's not just, `Hey, let's throw a Coke can in there.' The characters are going to be sipping Coke and it'll be a big part of the story line," Bartos says.
In other words, advertising dollars won't dry up completely. And for the few event broadcasts that remain -- the Super Bowl, the Academy Awards, the end of "Everybody Loves Raymond" and things like that -- ad rates will go higher than ever.
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