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Changes in technology pose threat to advertisers

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.

Junk Mail-Blocking Apps

The United States Postal Service, plagued by financial woes, now must deal with a new smart phone App called MailStop that notifies advertisers to remove contacts from their mailing list. MailStop launched in January. As of mid-April, it had been downloaded over 10,000 times and processed about 105,750 requests.

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. 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.

Media buyers say about 50% of ads get skipped by DVR users.