David Poltrack

January 18, 2010 World Screen
This article originally appeared in the MIPCOM ’09 issue.
 
Widely regarded as one of the foremost experts in television audience research, David Poltrack has been observing evolving viewing habits for decades. His responsibilities include audience measurement, program testing and advertising research, and he also designed and oversees CBS’s state-of-the-art research center in Las Vegas, which provides ongoing consumer feedback on entertainment content and technology.
 
WS: Are DVRs the enemy of advertisers and broadcasters, or are they a boon because people watch those shows at a more convenient time?
POLTRACK: It’s a combination of both. Yes, people are time-shifting TV programs. The average person watching a television program in a time-shifted form watches about 44 percent of the commercials, so they miss about 56 percent. Because they are watching television in a time-shifted form instead of [at its scheduled time], that is going to deliver less value to the advertisers because it’s a lower advertising reach. Now, with the new C3 ratings [which measure the live broadcast of a show as well as three days of DVR playback], the advertising revenue is based on the audience for the commercials, not the audience for the program, so that is the negative part of the DVR.
The positive part is that a disproportionate amount of DVR use is for network television programs. As a result, the most popular programs are seeing their audiences significantly enhanced by the DVR. And that enhanced viewing level is, in the case of those programs, increasing their advertising reach.
 
WS: Is there experimentation being done to find an alternative to the 30-second spot?
POLTRACK: There is experimentation being done; it’s not necessarily finding an alternative to the 30-second spot. We have a research lab in Las Vegas and we’re doing a lot of experimentation with eye-tracking equipment and all the latest technology to try to make sure that commercial appeal is as great as possible. And we are finding that certain commercials—the high-scoring commercials that people really like—actually will hold the audience, and there is a big differential between a popular commercial and a non-popular commercial. We have evidence that popular commercials, even in fast-forward mode, leave an impression. All the advertisers are experimenting with that.
 
Looking at technological opportunities, there is the possibility of actually putting banner advertising around ads as you are fast-forwarding through a commercial. If your DVR is hooked up to the Internet now, there is the ability to actually integrate banner advertising.
I believe the DVR is a transitional technology. Its penetration may hit 40 percent but it’s not going to go much beyond that because the DVR still requires you to tell it what you want to record, and there is a limited amount of hours of programming you can record. None of that is necessary now if you can have access to all these programs whenever you want them through the Internet.
 
So the Internet offers a better alternative—it doesn’t cost anything to the consumer because it’s advertiser-supported. Plus, you can’t fast-forward through the commercials on the Internet. Right now the average hour of programming on the Internet carries only 2 to 2.5 minutes of commercials, which is usually a pre-roll break and maybe one or two ads. That same program on network television carries about 10 minutes of commercials. Watching programs live is still better in terms of revenue potential than either the DVR or Internet viewing, because they both offer less commercial exposure and less commercial opportunity.
 
We’ve started to do research that suggests that the reason there are only a couple of minutes’ worth of commercials in a program on the Internet is not because people won’t watch more than a couple of minutes, it’s really because that’s the way the industry has evolved—programming on the Internet started with short-form video. If people are only watching about three minutes of video, you can’t give them 10 minutes’ worth of advertising. But now that they are watching full programs, that’s not that much of a problem. When we aired March Madness, the NCAA basketball tournament, we streamed it online with all the ads in it and it was one of the most-watched events on the Internet. And we had no indication that anyone was turned off by the commercials.
 
We believe that as long as the offer is free, without any subscription charges, the consumer will accept a significantly higher amount of advertising on the Internet than they are currently seeing. And at some point, the Internet will become a better alternative to the broadcast and cable company as a secondary distribution source than the DVR—because on the DVR people can skip through commercials, on the Internet they can’t.        

 

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