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

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

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