"It's obnoxious," he said of the ads that appear when a TV program is paused. He said other ads have been on the periphery or appear on the menu page. This is the first time he's noticed TiVo layering an ad on top of an actual program.
He said he's been wondering, "Who are TiVo's customers?" People like him, or advertisers? "They're getting paid on both ends."
One ad buyer was told by TiVo that a "pause" ad costs $20,000 a week with exposure on 15 programs. That would be a bargain by some measures: A 30-second commercial airing once on prime time TV costs about $150,000, on average. TiVo would not confirm its rate, saying that what an advertiser ultimately pays can vary widely, depending on what's negotiated.
Video on demand services — where you can watch movies and TV shows usually with fewer commercial interruptions than broadcast TV — are also expanding as a venue for ads.
Cablevision Systems has been adding advertiser-specific video-on-demand channels over the years and now has nine, including one dedicated to Walt Disney. People who tune in can watch videos of Disney theme parks, order a free DVD featuring Disney vacation locales and ask a customer service agent to call. Cablevision found that Disney ads snagged 7 to 10 minutes of viewers' attention — a long time compared to 30-second TV commercials.
During a stretch of several months last year when responses were being measured, Cablevision found that 23% of people who watched the ads booked trips with an agent.
These and other new kinds of ads sprouting on pay TV services are meant to entice recession-weary advertisers that want to know whether their ad dollars are effective, said Josh Martin, vice president of emerging media at ID Media, a unit of Interpublic Group of Companies in New York.
Cablevision's video-on-demand channels let advertisers know how many times viewers watched a video, how long they stuck around and how often they requested more information.
"It's sort of a march away from the classic 30-second commercial ... towards accountability," said David Sklaver, president of KSL Media Inc., a media planner and buyer in New York.
Many of the new ads being tried by pay-TV operators make use of consumer targeting, which tailors ads to someone's presumed interests.
The companies can get a good idea of what viewers might like by using demographic information, such as age, income, household size and other data that can be bought from consumer-information brokers such as Experian. The set-top boxes in consumers' living rooms can receive or store several different ads and then choose which one to show, depending on the viewer.
Seth Haberman, CEO of Visible World, a provider of customized TV ads whose clients include the nation's five largest cable TV operators, said viewers who would rather skip ads should realize they subsidize the cost of producing cable TV content.
"If you took out the ad support, your bill would triple or quadruple," he said. "There's no way around it."