TiVo's Cruisin'

Those who dubbed TiVo (Nasdaq: TIVO  ) an "advertising killer" may have spoken too soon. Today, TiVo announced a foray into interactive advertising, through a partnership with Royal Caribbean (NYSE: RCL  ) that will use the TiVo platform.

Last spring, it became apparent that Motley Fool Stock Advisor pick TiVo was going to launch some advertising-related programming in the fall. Right on target, TiVo announced that Royal Caribbean will use TiVo to advertise a one-hour TV special airing on the Travel Channel. Upon TiVo users' request, they'll be able to learn more through two-minute video spots about Royal Caribbean's destinations.

Though TiVo's deal with Royal Caribbean is a pilot program, it highlights a necessary evolution in TV advertising: the need for interactivity and a more customizable TV viewing experience. For example, as much as Internet advertising is disliked, recent studies have shown that advertising that is seen as more relevant to users' tastes is more effective than more random ad blanketing of yesterday. Meanwhile, TV advertising could become more powerful if curious consumers can learn more about products they're interested in.

Furthermore, done well, and geared to an individual's interests, TV advertising may lean further still toward being information and content. Other recent signs of the death -- or is it rebirth? -- of traditional advertising included Oprah's General Motors (NYSE: GM  ) giveaway and Wal-Mart's (NYSE: WMT  ) advertising network.

Of course, this experiment could very well fizzle. If the ads aren't interesting, nobody will bite. It's always a risk that any perception of intrusiveness will turn users off, and there's always the privacy issue that many people are thinking about these days, when it comes to technology and its ability to track interests. Last but not least, any danger of filling up TiVo's hard drive with ads that knock your TiVo'ed content out of the queue might generate some angry users.

Given its hoards of copycat competitors, TiVo does need to figure out as many ways as possible that its DVR box can be used to ensure plentiful revenue streams. And today's move is a good example of that, as well as a reminder that TiVo tends to do an exemplary job in seeing how to revolutionize TV. In that regard, not much has changed.

Look back on some previous TiVo stories from the last few months:

TiVo is aMotley Fool Stock Advisorpick. For more on TiVo, and the other stocks that the Gardners have picked for success, try it for six months, risk-free. Or talk to other Fools about TiVo (as an investment, a company, or a technology) on the TiVo discussion board.

Alyce Lomax does not own shares of any of the companies mentioned.

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