Sky Claims Advertisers Have Nothing To Fear From PVRs

The advent of PVR technology will not adversely affect advertisers’ ability to promote their brands through television, according to Sky’s Dawn Airey, who made attempts to allay fears over the use of its Sky+ system at this week’s ISBA annual conference.

Addressing delegates at the conference, Airey, managing director of Sky networks, recognised that some of the company’s recent ventures had left advertisers feeling nervous, highlighting the fears of some over ad-skipping technology and the use of PVRs.

Opening her speech she said: “I suppose one of the reasons I’m standing up here this morning instead of Mick Desmond or Charles Allen is that many of the key changes are being wrought by Sky. And, let’s be frank, some of these changes are scaring the hell out of you.

“I’m acutely aware,” she added, “that some of the things we’re doing, such as the introduction of personal video recorders, are regarded in certain quarters as a slap in the face to the advertising industry…It used to be the case that viewers watched what you put in front of them because they had nowhere else to go. This was true of both programmes and advertisements…But now viewers can watch what they want, when they want. They can assemble their own peaktime schedules and if they don’t like what’s on they have 400 other channels to choose from. When they settle upon a viewing choice for the first time in history it’s actually something they want to watch.”

The switch of power from broadcasters and advertisers to the viewer is due, according to Airey, to two main factors – interactivity and PVR technology.

The broadcast boss explained that interactive advertising is now able to command significantly more attention from viewers than conventional TV commercials, citing the example of a recent campaign for Kit Kat chocolate bars, where viewers used the interactive element of the campaign to connect with the brand, not just for 30 seconds, but for 13 minutes.

She explained: “Last month, a simple 20-second advertisement for the new album by the Chemical Brothers prompted some astonishing interactive statistics. The ad only ran on Sky and Channel Four over 10 days and only aired a limited number of times. Yet more than a quarter of a million fans pushed the red button to hear some snippets of the songs and then an amazing 22% of them went on to buy the album. That means 61,000 people bought the Virgin EMI record – more than enough to help send it to the top of the album charts.”

On the topic of Sky+, however, Airey met her critics head on, stating: “Let’s get the scare-mongering out of the way. The facts are these: If you live in a Sky+ household, you watch fewer ads. There’s no getting away from this.” However, she explained that, while around 30% of ad breaks are being fast-forwarded in Sky+ homes, this is only possible when the viewer is watching pre-recorded material, making up roughly a third of all TV watched in the household.

Airey also explained that the Sky+ box is not capable of skipping advertising whilst watching a live feed, nor can it skip an ad break automatically. She said: “There’s no button on the remote control that allows you to avoid ads completely, although you can fast-forward at 30 times normal speed. In 2003 and 2004 we commissioned research that compared the behaviour of viewers in Sky Plus homes with regular Sky and terrestrial households. What we found was that recall levels, both prompted and non-prompted, were exactly the same or greater than in regular Sky and terrestrial homes. So even though Sky Plus viewers have the capacity to fast-forward past ads, their level of recall was not diminishing.”

Likening the effect of fast forwarding to being “just like the motorist zooming past a roadside ad”, Airey explained that viewers are still capable of taking in advertising messages, and remembering the relevant messages.

She said: “Even though they were fast-forwarding through the ad breaks, they were still paying attention to see when the programme started again and in order to stop, or rewind and watch an individual execution that they enjoyed as a creative piece of television in its own right.”

The broadcast boss explained that several high-quality and original advertisements had been singled out by test groups who had wanted to watch the commercials as entertainment in their own right, and while she recognised that it was not always possible to make commercials of that nature, stated that it should be a benchmark for advertisers to measure themselves against. She said: “I don’t have any doubts that agencies are able to rise to the challenge and develop new formats, new imagery and new ideas that will help retain viewers’ attention in the age of the PVR.”

Airey also attempted to downplay the scare-mongering of recent pessimistic reports, explaining that “there are only 600,000 of these boxes out in the marketplace. Over time they will become a mass market proposition, but we can use this time and work together to help shape the future of the industry.”

Underlining the possibilities of the new technology for advertisers, Airey explained that PVRs could be programmed, via interactive adverts, to download material for potential customers to peruse at their leisure, such as information on complex products such as mortgages or cars.

Sky will also launch a credit card this year, which Airey revealed would be compatible with the second smart card slot featured on all Sky set-top boxes. The card, it was claimed, would be capable of running reward schemes, with Airey suggesting that “You could reward viewers who have spent 10 minutes interacting with an ad, with the ability to go back directly to where they left the programme when they pressed the red button so they don’t miss any of the action.”

However, Airey’s message overall was for advertisers to work with the new technology in finding ways to adapt their campaigns to viewers’ increasingly complex patterns of media consumption. Stating that new technology had always posed challenges for the industry she said: “When I was starting out 20 years ago advertisers were worried about the effect that the remote control was going to have on viewing. Then there were concerns about the VCR. Best of all was Charles Allen’s example. He said: ‘There has always been technology to allow you to skip the advertisements. It’s called the kettle.'”

Sky: 08702 40 40 40 www.sky.com

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