ANALYSIS: Technology - Agency nightmare bound for Asia. Will ad-zapping PVRs lead to a raising of the creative bar? Richard Lord reports

<p>You may or may not have heard of TiVo. For advertisers, it's a </p><p>pretty scary piece of technology, and it's coming soon to a TV near </p><p>you. </p><p><BR><BR> </p><p>TiVo and its ilk are known as personal video recorders (PVRs). </p><p>Essentially they're TVs with hard drives, allowing users to store and </p><p>replay TV content at will: so you could be watching TV, pause it to take </p><p>a phone call, and start the programme again a couple of minutes later - </p><p>the PVR will show what happened a couple of minutes ago, while recording </p><p>what's happening now. It gets better. PVRs can also search for content - </p><p>so users can ask it to record all episodes of a certain programme, say, </p><p>or find programmes similar to ones they've watched in the past. That </p><p>makes the technology potentially quite scary for owners of specialist TV </p><p>channels - but not half as scary as it is for advertisers and agencies. </p><p>Because PVRs are the greatest ad-zappers ever invented - they can be </p><p>used to screen out all ads. </p><p><BR><BR> </p><p>Although PVR manufacturers have no immediate plans to enter Asia, the </p><p>bad news is that every major digital TV set-top box manufacturer has </p><p>announced plans to incorporate PVR technology into their offerings - so </p><p>by definition, it's going to be built into every box in Asia. Plus, the </p><p>likes of Microsoft, Nokia and Philips are either producing or looking at </p><p>consumer PVR devices, and the technology could be built into DVD </p><p>players, or even games consoles - and this in a region with a positive </p><p>attitude towards new gadgets. </p><p><BR><BR> </p><p>A new piece of research, from digital consultancy Decipher, part of the </p><p>Lowe Group, predicts that if the price is right (TiVo and its peers are </p><p>currently pretty expensive, retailing at around US$399), Hong </p><p>Kong alone will have a million PVR-enabled boxes within 10 years, </p><p>through digital TV providers Oxygen, Galaxy and iCable. There are </p><p>currently 250,000 TiVo owners in the US: 70 per cent record a programme </p><p>every day; 60 per cent now watch programming they didn't previously </p><p>watch because of scheduling; and a frightening 90 per cent use it to </p><p>skip ads. Extrapolated to a Hong Kong market with a million users, the </p><p>report says, that would wipe 25 per cent, or HK$30 billion </p><p>(US$3.85 billion), off the the city's annual adspend, as </p><p>consumers start to skip ads. </p><p><BR><BR> </p><p>It's not all bad news - as well as challenges, there are </p><p>opportunities. </p><p><BR><BR> </p><p>Programme sponsorship and product placement will become more </p><p>important. </p><p><BR><BR> </p><p>Ads can play when the PVR is paused. And because the boxes track what </p><p>people watch, there's the possibility of internet-style </p><p>personalisation. </p><p><BR><BR> </p><p>Decipher managing director Nigel Walley believes the impact will be </p><p>profound. </p><p><BR><BR> </p><p>"People will be doing things like sponsoring content more, and that's </p><p>not the area where traditional agencies are strongest," he says. "It's </p><p>always been assumed that advertising agencies have TV sewn up, but </p><p>there's the opportunity for other agencies to get involved, particularly </p><p>direct agencies. When it's on TV, clients have to merge budgets in a way </p><p>they've never done before. At the Lowe Group, we think it's the most </p><p>exciting time to be in advertising, unless you're particularly tied to </p><p>the old model." </p><p><BR><BR> </p><p>According to John Woodward, regional planning director for Leo Burnett, </p><p>it could be good news for agencies. "It's not such a bad thing," he </p><p>says. </p><p><BR><BR> </p><p>"It tends to prevent advertisers and agencies from producing bad ads. </p><p>Bad-quality broadcast will actually be supressed a little bit, and it'll </p><p>be replaced with good-quality interactive. It's as much an opportunity </p><p>as a threat." </p><p><BR><BR> </p><p>Woodward is also sceptical about the threat to TV channel owners from </p><p>people being able to search for specific programming. "There are always </p><p>different ways of getting to people. It just means everyone will need to </p><p>be that much cleverer in their media planning." </p><p><BR><BR> </p><p>Lowe Lintas regional creative director Giles Keeble believes that </p><p>creative quality could be raised. "There's the argument that people </p><p>never wanted to watch ads, that it was always our duty to make them </p><p>watchable and this just makes that more the case," he says. "The problem </p><p>is that a lot of the people involved with interactive TV generally are </p><p>below-the-line people, whose expertise is in direct response, and TV by </p><p>and large isn't a direct response medium." </p><p><BR><BR> </p><p>A lot of people have a low-level dislike of advertising, but it remains </p><p>to be seen how many will turn it off, given that it may mean they have </p><p>to start paying for programming. In many ways, the furore about PVRs </p><p>mirrors what was said years ago about the internet: it's going to impact </p><p>on the effectiveness of traditional advertising, and it pushes </p><p>interactivity and intelligent communications to the fore. The web </p><p>precedent makes it easy to be cynical - but when the technology is part </p><p>of a device everyone has in their home, is trivially easy to use, and </p><p>can be used to actively cut out advertising, it's a brave advertiser or </p><p>agency that ignores it. </p><p><BR><BR> </p>