Advertisers fear tools that eliminate commercials, junk mail

By Oregon Small Business Association

A smart phone App called MailStop and a new Dish Network DVR dubbed “The Hopper” give consumers the power to eliminate junk mail and commercials. Consumers are happy. Advertisers, not so much.

Junk Mail-Blocking Apps

The United States Postal Service, plagued by financial woes, now must deal with a new smart phone App called MailStop created by Catalog Choice, a Berkeley, Calif. startup that notifies advertisers to remove contacts from their mailing list.

In 2007, Catalog Choice created a searchable online database of 10,000 brands with opt-out links. Over the past five years, it processed 22.5 million stop-mail requests, a fraction of the 85 billion pieces of junk mail that stuffed American mailboxes in 2011. But junk mail-blocking apps from Catalog Choice and competitors like PaperKarma could dramatically increase that number.

MailStop launched in January. As of mid-April, it had been downloaded over 10,000 times and processed about 105,750 requests.

Meanwhile, cash-strapped cities seeking to save landfill and recycling costs are launching their own junk mail sites, powered by Catalog Choice software.

The junk mail revolt is bad news for the beleaguered postal service, which has grown increasingly dependent on “standard-class mail” revenue as the volume of first-class mail falls 7% a year thanks to e-mail, social networking and online billing. First-class mail currently accounts for 51% of the postal service’s revenue; by 2020 it is projected to fall to 35%.

“Auto Hop” Skips Commercials

Dish Network released a DVR feature that can automatically skip commercials from nationally broadcast prime-time shows, a move that threatens billions of dollars in broadcast-television advertising.

The new “Auto Hop” feature comes on a DVR dubbed the “Hopper,” a device that has been available to subscribers since March. With Auto Hop, viewers see a black screen momentarily where the ads were broadcast, or a glimpse of the first frame of the first commercial. Then the show resumes.
Consumers merely have to click an on-screen Auto Hop button before a show to enable the feature. Dish makes clear that it isn’t deleting the advertising from the recorded material; if customers want to watch all the ads, they can.

The notion that viewers won’t see even a whirr of fast-forwarded ads threatens billions of dollars in broadcast television advertising—and risks the ire of the networks. The feature is available on recordings of nationally broadcast prime-time programs aired on ABC, CBS, Fox and NBC but watched after 1 a.m. the day after they air. Dish is the third biggest pay-TV distributor, with more than 14 million subscribers, trailing Comcast and DirecTV.

Introduction of DVRs several years ago raised widespread concerns about the impact on TV advertising. The impact so far has been mixed. The devices have been widely adopted and are now in about 43% of U.S. households, according to Nielsen. Media buyers say about 50% of ads get skipped by DVR users.

Yet TV advertising has increased from $51.6 billion in 2003, when DVRs became widely available, to $58 billion in 2011, according to Publicis Groupe SA’s Zenith Optimedia.

Still, DVRs have changed marketing tactics. Advertisers have worked overtime to embed their products and pitches within the shows. Product placement over the past few years has soared and become a major part of most media companies’ offering to advertisers.

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