Keep your friends close and your enemies closer. I can't help thinking of that X-Files-like adage in relation to Motley Fool Stock Advisor pick TiVo (Nasdaq: TIVO). Is TiVo the killer of TV advertising ... or its savior? It seems we'll soon see whether TiVo can gracefully walk the line between assassin and Samaritan -- and whether its customers will mind.
Today, TiVo announced the launch of its next-generation advertising technology, with initial campaigns from General Motors (NYSE: GM) and The WB television network, a unit of fellow Stock Advisor selection Time Warner (NYSE: TWX).
The new technology will allow advertisers to create customized pop-up tags (old tags, which were few and far between, were generic) that will make their ads more visible to viewers, even while TiVo users are fast-forwarding through them. TiVo users will be able to select these new tags to pause the show they're watching and "telescope" into long-form content, request more information, or learn about similar or related shows to record.
In addition, the press announcement said that TiVo will allow advertisers to gain leads (with viewer consent) directly from the TV spots, which has hints of an Internet-like ability to reach consumers in a more personal way than previous TV and print marketing made possible.
Fool contributor Tim Beyers recently wrote about the idea that TiVo is becoming a gateway to TV in the same way that Google (Nasdaq: GOOG) has become a gateway to the Internet. He mentioned the obvious benefits gleaned from presenting targeted advertising geared toward user tastes. That made me think of a recent customer email newsletter I received from TiVo. In addition to technical hints, it included profiles of directors and actors with rankings of their popularity in user "wish lists." It reminded me of Yahoo!'s (Nasdaq: YHOO) "Buzz Log," which displays Web surfers' preferred searches, giving you an idea of what's hot and what's not.
I have mixed feelings about TiVo's new capabilities. On the one hand, I find it fascinating that the company has turned the threat it posed to TV advertising to its own advantage, and to the potential benefit of viewers and advertisers alike. That's simply brilliant. My sole concern at present is that TiVo might anger and alienate viewers if it doesn't pull this off deftly.
Most people find commercials an irritiating waste of time, and TiVo's greatest innovation has been empowering users to skip past those ads. If the new ads are executed well, customers could be pleased to only view pitches for products that truly interest them. However, if the new technology begins to feel intrusive or nosy, TiVo might lose one of its major selling points -- a blow it can't afford, especially at this point in the game.
I'm personally eager to see the new technology in action. TiVo investors, of course, surely hope for the best -- that the company can continue artfully employing technology to deliver an experience its customers love.
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Alyce Lomax
does not own shares of any of the companies mentioned, although she is a happy TiVo customer.
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