When a small Canadian toy maker, Spin Master Ltd., launched its new television campaign in the United States recently, the company didn't exactly set out to turn the global ad world on its head.
But the modest 30-second spot has unexpectedly thwarted a major problem facing advertisers today as technology makes it easier and faster to zip past commercial breaks with personal video recorders (PVRs).
For reasons even the company is struggling to explain, its commercial appears to be fast-forward-proof.
A new kind of data made public this week by California-based TiVo Inc. — one of the world's biggest sellers of PVRs, which digitally record programs on internal hard drives — pegs Toronto-based Spin Master's ad as one of the least-skipped commercials on U.S. television. Such information was once impossible to track and is highly coveted by advertising agencies since there are more than 20 million PVR users in North America — and the number is growing.
But the advent of smarter PVRs that are connected to central networks, such as TiVo devices, is starting to allow viewing habits to be watched closely (and anonymously) by the companies, including second-by-second ratings for recorded shows after they air.
With audiences increasingly eschewing scheduled viewing to watch TV on their own terms, figuring out accurate numbers for recorded shows is a gold mine for the industry. Networks argue that they are losing millions in ad dollars as PVRs — which are really just the evolution of the old videocassette recorder — dilute prime-time ratings.
TiVo's devices, sold mostly in the U.S., are in 4.3 million homes in the U.S. and Canada. Each night, the company gathers data from 20,000 randomly selected machines and the information is sent anonymously to its headquarters via their phone or Internet hookups.
The company is now using the data to become a purveyor of ratings, particularly for individual commercials, said Todd Juenger, TiVo's vice-president of audience research and management. "We're going to do this every month and, over time, as we get a bigger database built up, maybe some definitive patterns will emerge," he said.
The information can be packaged, spliced and sold, much like traditional TV ratings. All PVRs could be used this way in the future, assuming they have two-way cable or Internet hookups, but TiVo is the furthest along in developing the technology.
Only a few months in, the data are already challenging conventional wisdom that big-budget ads will keep people watching. The numbers show that Spin Master's ad for a toy called Air Hogs has the fourth-lowest rate of fast-forwarding during a recorded program.
That puts Spin Master behind other low-budget ads for golf gear and exercise equipment, and among companies with massive marketing budgets like Microsoft Corp. and General Motors' Hummer division. One theory on why the toy commercials do so well is that they are aired during children's shows and the audience is more targeted. Another is that kids are entertained by toy commercials and may be less inclined to avoid them.
The company admits it was stunned by the ratings. "It's one of those pieces of information where it was like: 'Wow, I didn't even know they were tracking that,'" said Anton Rabie, co-chief executive officer of Spin Master.
TiVo's new ratings sent ripples through the ad community this week. It is one of the few glimpses marketers have been given of viewing habits for recorded programs. Although customers can decline to have their machines tapped for data, TiVo estimates only 1 per cent ask to be excluded.
With a handful of companies like Nielsen Media Research and TNS Media Research in a high-stakes race to amass ratings for live commercials, TiVo believes it has taken the early lead in tracking recorded ads.
The figures could affect how the industry thinks, Mr. Juenger suggests. Though shows such as Grey's Anatomy, American Idol and House get the highest ratings, it doesn't mean their commercials enjoy the same audiences.
An April episode of Grey's Anatomy was watched by 24.5 per cent of TiVo households, but only 15 per cent watched a Cadillac commercial that ran during the show, according to ratings that combine live and recorded viewership.
The top-rated commercial, both live and recorded, was for the movie Disturbia, which was seen by 21.1 per cent of TiVo households. That ad ran during an episode of House that only ranked as the eighth most-watched program.
"I would've expected commercials that had the highest audience numbers would have been concentrated in the programs that had the biggest audience," Mr. Juenger said. "It didn't come close."
