Do Digital Video Recorders Influence Sales?

Abstract

The authors analyze a multimillion dollar, three-year field study sponsored by five firms to assess whether enabling skipping of advertisements using digital video recorders (DVRs) affects consumers’ shopping behavior for advertised and private label goods. A large sample of households received an offer for a free DVR and service, and close to 20% accepted. Each household's shopping history is observed for 48 consumer packaged goods categories during the 13 months before and the 26 months after the DVR offer. The authors fail to reject the null hypothesis of no DVR treatment effect on household spending on advertised branded or private label goods, either one or two years after the DVRs are shipped. The predicted DVR effect is tightly centered around 0, suggesting that the data have sufficient power to identify a true null effect. Using advertising exposure information for seven of the brands in the study, the authors offer suggestive evidence that ad skipping occurs for a relatively small fraction of the total television content viewed. The authors also discuss other potential explanations for the lack of a DVR effect.