Throughout the century, television has made a large impact on how the public receives information. TVs have been commercially available since the late 1920’s, which eventually led to it becoming commonplace in homes throughout the country. For viewers, it has become a top source for entertainment and news. But, for companies, it has become a target for advertisement placement, or commercials.
By analyzing viewership of particular programs, companies are able to pinpoint when and what their target audience is watching. From this information, they are able to place their commercial advertisements during these programs as an effort to successfully reach their audience.
With the prevalence of television usage in U.S. households, throughout the years, companies have used this medium to their advantage by creating and airing advertising commercials that are shown directly to their target market. Nielsen ratings are the audience measurement systems that determine the audience size and composition of viewers of a chosen program. In its 2012 Advance/Preliminary TV Household Universe Estimate, The Nielsen Company estimates that 114.7 million households will have a TV in 2012. This estimate is actually a decrease from the 115.9 million households with a TV in 2011. This report also notes a decline in the estimated percent of U.S. households with a T.V. of 96.7% in 2012 from 98.9% in 2011. The State of the Media Trends in TV Viewing, produced by the Nielsen Company, successfully outlines the current 2011 trends in television.
According to Nielsen data, U.S. television advertising spend in 2010 reached $69 billion. This is an incredibly high amount of money to spend, despite new technological advances that have entered the market, damaging the effectiveness of TV advertising infiltration reach.
The videocassette recorder (VCR) became a mass marketed product in the late 1970’s. VCRs allowed viewers to record programs and watch them at a later time. With control over tape speed, viewers were able to fast forward the commercials and only watch the program. However, in the early 2000’s, the VCR declined with the introduction of the DVR as a popular consumer format for playback or prerecorded video.
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Digital video recorder (DVR) products, ReplayTV and TiVo were first introduced to the public in 1999. They were more convenient than VCRs and allowed viewers to pause live TV, replay scenes, view a program before its completed and set and record programs. The product also allows viewers to skip commercial advertisements completely. According to Nielsen data, DVR penetration increased by about 4% in the last year, rising from 35.7% of TV households with DVRs in February 2010 to 39.7% in February 2011.
With the rising cost of commercial advertising, the decreasing number of TVs in households and the increase in the use of products that allow viewers to skip commercials, the traditional use of television advertising is becoming less of a productive and viable investment for marketing.