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TiVo ad service launches with 70 US advertisers

Product Watch is about to hit your screens

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We knew that TiVo was on to something when it began the idea of opt-in, voluntary viewing of advertising two and a half years ago, when it said that 65 per cent of its audience had volunteered to watch an advert it had placed on its Digital Video Recorders, on behalf of Universal Pictures, to advertise the film Bruce Almighty.

Back then Tivo had only one million subscribers, but since many of them went on to view the film, it was a surefire winner for Universal and TiVo has since been trying to bring the concept to market as a fully fledged, rounded ad concept.

Now though, TiVo has 4.4m subscribers.

Back in November, TiVo said it had now merged the concept with search advertising, rather like Google for a DVR. TiVo has now launched this service as Product Watch (Geddit – if you want a product, watch it on TV).

There are plus and minuses to this type of advertising. Right now if someone "knows" they are "in the market" to buy a new car, they will actively seek out adverts on the internet, on the TV and in magazines about cars, and they will go to car showrooms. To a certain extent each car manufacturer should expect that this type of buyer will examine its proposition and decide if they want to be their brand of car.

Often advertisers would rather reach people that don't yet realise they are "in the market"and then can guide them onto an advert on impulse and be the "only brand considered". This is especially true for say job advertisers, that always say they are looking for someone that doesn't know that he or she wants a new job. The people that are already aware they are about to move have already put their CV out to everyone.

But in a way, search advertising that sits on a DVR attracts both "in the market" and "not in the market" viewers. Some just want to dream about a new car, and opt to view the car ads, even if they can't afford one, and others are genuinely seeking guidance on which one to buy.

The new TiVo service then delivers long form advertising between one minute and up to an hour, always under the control of the viewer, broken into five sub-markets - automotive, entertainment, financial, lifestyles, and travel and leisure.

TiVo Product Watch launches with relevant advertising content from more than 70 advertisers, supporting over 100 leading brands. The idea is that TiVo subscribers can search, and the selected videos that meet the criteria of the search, will be moved to the Now Playing section of the TiVo service.

TiVo viewers can also search based on their favorite brands and even subscribe to a brand and opt-in to receive video content directly from that company on an ongoing basis.

Although TiVo has only announced this for TiVo customers, TiVo is also under contract to build new advertising formats around the DVR for Comcast over the next year or so, and these capabilities are likely to be retrofitted to each of the Motorola and Scientific Atlanta set tops that Comcast has out there which have DVR capability and which can be upgraded via software. TiVo is also contracted to share its ideas on advertising with DirecTV.

Most advertising that runs on cable is sold by the cable operator's suppliers, the cable networks, but here the cable operator could suddenly take on delivery of a whole new source of advertising, which would not relate to any specific piece of programming. The revenue would be additional to what it gets from in-program advertising.

If TiVo has negotiated continuing licenses to this technology, or better still a percentage of revenue for using it, it could shortly have this rolled out across most DVRs in the US, some 40 per cent of pay TV homes by 2010. And assuming that TiVo is patenting each idea as it goes, there could be a windfall down the road, when these patents are licensed to the big consumer electronics companies overseas, as in many case, the original DVR patents were licensed.

At launch, General Motors, Sony Pictures, Lending Tree and Kraft Foods will be included as the premium advertisers for their respective advertising search categories. Examples of content range from cooking demonstrations from Kraft Foods, to understanding the impact of different types of mortgages from Lending Tree, to behind the scenes movie trailers from Sony Pictures, and new automotive features and options from General Motors.

Starcom MediaVest Group, MindShare, Cmedia, BrightLine Partners, Interpublic Group, OMD, and The Richards Group all partnered with TiVo to help recruit advertisers and develop pricing. These agencies, along with Comcast Spotlight, the advertising sales division of Comcast Cable, provided advice concerning the product and its pricing model, which will be based on a cost per advert downloaded, plus an initial set-up fee to put the video adverts into the network.

This week the Wall Street Journal also said that TiVo had partnered with online video technology service Brightcove, which will enable TiVo users to download videos from the internet and watch them on their TV set by June.

Copyright © 2006, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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