Companies to cut adspend as personal VCRs take root

NEW YORK - Three quarters of companies in the US say they will cut spending on television advertising because of the rise in use of personal video recorders, which allow viewers to skip ads.

In a survey, 75% of advertisers said they would cut their budgets by at least 21%, while 26% said that budget would be slashed by as much as 40%. The findings suggest that as much as $7bn (拢4.5m) could be wiped off advertising spend by 2007.

Advertisers said they planned to counter ad skipping with spending more on programme sponsorships, product placement and other media including magazines, email marketing and internet advertising.

The survey was carried out by Forrester Research and the Association of National Advertisers, and published as in a report called 'Will Ad Skipping Kill Television?'. Josh Bernoff, principal analyst at Forrester, said: "Advertisers say they will cut TV spending across the board, on national, local and cable advertising, in the next five years as PVRs reach 30m households."

However, only 12% of the marketing executives surveyed thought that the industry should be lobbying Congress to limit consumers' ability to skip commercials.

Barbara Bacci Mirque, senior vice-president of ANA, said: "Advertisers have been dealing with 'ad-skipping' in one form or another for years. However, the survey results provide them guidance about the challenges and opportunities posed by technologically enabled ad skipping."

The report is based on a survey of 112 advertising directors and vice-presidents. It concludes that networks must tie ads closer to programmes, and that advertisers must transform their commercials to lure those who are tempted to skip ads.

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