TiVo Ads Set for Takeoff

People who have surmised that Google (Nasdaq: GOOG  ) might be interested in some sort of hookup with TiVo (Nasdaq: TIVO  ) -- and there are quite a few who saw the wisdom in that idea right here at the Fool -- certainly don't appear off the mark at the moment. Monday, TiVo announced that it's launching its new television advertising search product that will ostensibly bring targeted advertising to TV.

TiVo is trumpeting the launch of its advertising search product -- TiVo Product Watch -- which includes participation from 100 brands from 70 advertisers in five product categories -- namely Automotive, Entertainment, Financial, Lifestyles, and Travel & Leisure. Among the big names giving it a whirl are Kraft (NYSE: KFT  ) , Sony's (NYSE: SNE  ) Sony Pictures, General Motors (NYSE: GM  ) , and IAC/Interactive's (Nasdaq: IACI  ) Lending Tree.

TiVo's press announcement says that the ads will be informative and entertaining -- such as cooking demos from Kraft (how many of us have wondered how many ways we could serve that big block of Velveeta?), or Sony movie trailers that will include behind-the-scenes footage to pique the interest of potential moviegoers. TiVo subscribers will have the ability to create searches for ad content, too -- another nod to Google's search-related ad links.

It's good to see TiVo moving and shaking with innovation again. You really can't argue with the strategy that's finally coming to fruition: Create a problem for an industry, and then provide the solution. I've written about TV advertising's tough times. While it's clear that viewers are sick of being a captive audience to advertising -- an idea that has been borne out by the Internet's targeted ads a la Google -- it stands to reason that people might prove receptive to ads for products they're actually interested in learning more about. (And targeted TV advertising is a heck of a lot less crazy than this recent marketing idea from Ford (NYSE: F  ) .)

If this initiative is a success with viewers -- and it's still an "if" -- TiVo stands to gain from an additional revenue channel from advertisers. (According to The Wall Street Journal, TiVo will extract fees from advertisers only when users select their ads, although it will assign a one-time setup fee when advertisers first come on board with the program.) Despite the good news, though, TiVo does still face some challenges, such as increasing its subscriber base when there are still cheaper generic DVRs available from rivals. TiVo also needs to get back to profitability after a long stint pushing its hardware at ever-cheaper prices -- it has only reported one profitable quarter, after all. Regardless, though, it's arguable that TiVo's getting back into the big picture again.

For related content, see the following Foolish articles:

• Thanks to DVRs, advertising has been disrupted.
• Tim Beyers proclaimed that Google must buy TiVo.
• Read Rick Munarriz's thoughts on the same idea.

TiVo is a Motley Fool Stock Advisor selection. Kraft is a Motley Fool Income Investor recommendation.

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