The Difference Between TV and Online Business Models

It’s all about size, isn’t it?

About how many.

That’s how TV made its fortune.  By selling size.

It’s what we know.  And so, it’s what advertisers look for when they go online.

And, as we’re finding out, it’s not working all that well.

The business model of television is to deliver viewers to advertisers.  It still achieves this business objective better than any other media.

Is the business model of online any different?

You bet.

The business model of online is to deliver advertisers to viewers.

The result?

TV delivers high exposure and low involvement.  It’s called reach.  And it’s advertiser-initiated.

Online delivers low exposure and high involvement.  It’s called search.  And it’s consumer-initiated.

Both are critical to the success of a brand.

But, they are very different processes.

And, they should remain so.

But instead, advertisers are trying to make online work like TV.

While consumers are trying to make TV work like online.

Exposure and involvement are both critical to success.

But only failure will be achieved if advertisers continue to try to make both come from one media. 

$50,000 To Prove That Analytics Can Effectively Improve ROI

You might be surprised at who is offering this prize money.

The ANA.

Yes, that’s right.  The Association of National Advertisers.

In other words, your clients.

Willing to pay out fifty big ones to prove that analytics are more important than research and strategic planning when it comes to marketing decision-making.

Thing is, I never saw them as an either/or.  Do we use strategic planning or real-time data for this campaign?

I always saw them working together, more like hand-in-glove.

The stronger the strategic planning, the more impactful the real-time data should be.

What I think real-time data does offer is interim measures of accountability and/or ROI.

Each action the marketer takes has an accompanying reaction on the part of the consumer.  I say this because each consumer walks down his or her own pathway to purchase.  Real time data tells us where on that pathway we lose them.  Or, don't lose them.  

Someone – media/creative – is responsible for suggesting and implanting each of these actions.  And that’s where real-time data fits in.  To hold that particular party accountable for that particular action on the part of the consumer.

Data can measure and report on these interim actions.  Hell, let’s call them what they are – investments.  The consumer’s action, or lack thereof, is the return on that investment.

That's why it's called non-transactional ROI.

The better an advertiser’s interim, non-transactional ROI numbers are, the better their total marketing ROI will be.

And that’s what I would tell the ANA if so asked.

You, of course, can say what you want.

Contest closes August 1^st.

Paying Attention To Attention

In a column written today by Seth Godin, the concept of attention was once again brought to everyone’s attention.

Mr Godin comments that the amount of time we spend online and the number of pages we’re vising are going up dramatically.

What’s not keeping pace is the amount of transactions.

According to Mr Godin, “…your tweets today are seen by ten times as many people, but only twice as likely to get clicked on as they used to be.”

Mr Godin calls it attention inflation.  More time spent looking, less time spent clicking.

You could also call it impression inflation.

The value of an impression is going to continue to go down as the value of actual viewer/user involvement goes up.

With more and more pages and stuff to look at online, the stuff we do give any attention to becomes more valuable.

To both the publishers.  And, the creators of that stuff.

With the data now available, we can start measuring attention.  And, as we all know, what can be measured can be monetized.

Monetization gets peoples’ attention.

Which means we won’t just be paying attention to attention.

We’ll be paying for attention.

Interruptions Or Advertising – Which Are Consumers Actually Avoiding?

This blog has long held the belief that it’s not advertising that people are avoiding but rather interruptions to their programming.

These interruptions just happen to be advertising.

HitBliss, a new service that is now in beta, seems to agree.   What HitBliss is trying to do is eliminate interruptions during the program.  They do this by inviting the viewer to choose the category and commercial they want to watch before the program even starts.

Watching the commercial earns the viewer points, which can then be used to pay for future programming.

HitBliss claims that this method of viewing ads increases attention to the commercial.  Perhaps this is also due to the fact that the viewer is given prompts while the commercial plays.  These prompts must be answered by the viewer to prove that they are indeed watching the commercial (and not checking their email).

Once answering the prompts, the program plays commercial free.

Okay, HitBliss, I’m with you that consumers are trying to avoid interruptions to their programming.  But it seems to me that all you’ve really done is move the interruption to the start of the viewing process. 

Which means, the process is still intrusive.  But instead of multiple intrusions throughout a thirty-minute program, there is just one longer intrusion at the front.

I guess the logic is that one interruption is better than five or six interruptions.

But what if we went with no interruptions at all?  Wouldn't that be the holy grail?

In other words, what if all advertising was opt-in only?

The first response when I ask this question is usually, c’mon, who would actually opt-in to watch a commercial?  Well, those who are interested in that product category, or brand, for starters. 

And, while that number is probably larger than most people would imagine, it’s not nearly large enough to deliver the scale needed to maintain the current media model based on impressions.

So, if opt-in impressions won’t scale, what will?

What’s interesting is that when people opt-in to a commercial, they prefer commercials that are longer rather than shorter.  After all, they’re in control.  They can leave when the commercial is no longer of interest to them.  

So, while advertisers would get fewer people opting-in to any particular commercial, they have the opportunity to get more of that person’s time when they do opt in.

With opt-in, what scales isn’t how many, but rather, how long.

If thirty people watch a thirty-second commercial for one second each, the amount of time spent with that brand is the same as if one person watches all thirty seconds of that same commercial.

And, the chance of selling that one person will be greater than the chance of selling any of the first thirty.

As for publishers, can they work with this new currency of time spent? 

Certainly.

Publishers sell data.  An impression is one piece of data.  A viewed second is one piece of data.  For a thirty-second spot, publishers should be selling thirty pieces of data. 

Not just one.

As viewing audiences get smaller, what scales is viewer time spent, not viewers.

We can keep changing where the interruption occurs and claim victory.  But until we eliminate interruptions altogether, victory will not be ours.

To succeed, we first need to change our definition of success from how many to how long.

Because in the future, we need to learn how to make more, by talking to less.

Do Commercials Make Us Dumber?

According to new research by Carnegie Mellon University’s Human-Computer Interaction Lab, interruptions make us dumber.

By how much?

Twenty percent, according to tests conducted by Carnegie Mellon.

Commercials, as we all know, interrupt.  That’s why we don’t like them.

(Or, is it because we unconsciously know that they make us dumber?)

Now, turn the tables.  Make it so that people can access commercials on their terms.  In other words, so they don’t interrupt.

Would this allow commercials to make us smarter?

Perhaps.

At least about the product or brand being advertised.

But that would mean creating “non-intrusive advertising.”

And, as we all know, that's an oxymoron.

Mad Men Plus Math Men

The advertising business is becoming a business of numbers.  And creative people should be among those who are the happiest to see this.

Why so?

Data has historically been the enemy of creative.   The reason is that data reinforced the rational element of an idea while ignoring the emotional component.  So creative that could possibly soar was usually tethered down with more and more facts.

That was then.

Today, what data can tell us about creativity has changed.  And the mad men of today have the opportunity to use that data to support their creativity.

Of course, there is a cost to do this.  And that cost may be their salary.

Let me explain. 

The lament at most great creative shops is always “Why can’t we be paid based on how good we are”?  In other words, why can’t their creativity be recognized financially, rather than just at reward shows?

Data now allows this to happen.

For example, what is the primary objective of a TV commercial?  It’s not sales, mind you.  Sales are the ultimate objective.  But before a sale can take place, what has to happen?

Someone needs to be persuaded.   And to be persuaded, what needs to happen?  The commercial needs to be watched.  Not just two seconds or five seconds.  But the bulk of the commercial.

After all, thirty seconds were done for a reason.  If the persuasive argument could have been expressed in five seconds, then a five-second spot should have been done.

Data can now tell us how long a commercial has been viewed for.

So if the first objective is to get a targeted viewer to watch more rather than less of the commercial, and data can tell us how well the creative achieved this objective, then the question for creatives is this.

Are you willing to be paid based on how well you involved the viewer in the commercial?

The longer you involve them, the more you/your agency makes.  The less time a viewer is involved in your commercial, the less you/your agency makes.

Are you, as a creative person, willing to be held financially accountable for “how good” you are as a creative person?

Because that’s what data now allows us to measure.  In other words, data now allows advertisers to measure how well the creative delivered an ROI against the costs to create the commercial.

An average :30 spot costs $360K to produce.  That’s $12,000 a second.

Which means, in theory, the thirtieth second cost as much to produce as the first second.

Each second not consumed by a viewer is $12,000 lost.

If more of a commercial is consumed by viewers, then the better the ROI on production dollars spent for that commercial.

And isn’t that what creative people are initially accountable for?

A return on production dollars invested.

The higher the return on involvement in the commercial, the higher the return on investment in the commercial.

It's in this way that data starts to tell us how creative a commercial is.

And, it allows advertisers to compensate their agencies accordingly.

Based on their creativity.

Isn’t that what agencies always wanted?

Mad Men, meet Math Men.

It’s time to go have a drink together.

What An Advertiser’s Website Should Have In Common With HBO

I think everyone knows the difference between content on HBO and content on network TV.

The content on HBO is more sophisticated, daring, and well, watchable.

There’s a reason for this.   

Viewers subscribe to HBO.   

Network TV can be seen by anyone.

How does this compare to an advertiser’s website?  Well, in a way, consumers subscribe to a website in the sense that they come to it.  It doesn’t intrude on their programming. 

If there's going to be interaction, the consumer must initiate it.

In a recent article in Adweek, Randall Rothenberg, president and CEO of the Interactive Advertising Bureau said, “Advertisers now have the foresight and financial incentive to produce original digital video advertising and make digital video a central focus of creativity, breakthrough interactivity and brand storytelling.”

Sounds a little like HBO content, doesn’t it?

Consumers are eager for a more sophisticated, daring and perhaps, even controversial, content in advertising.   The perfect place to view this sort of advertising would be the brand’s website. 

A consumer doesn’t have to watch it on the website.  But, they can if they choose to.

It’s time for commercials to evolve.  TV did with the introduction of HBO. 

Remember the theme line for HBO?  It’s not TV.  It’s HBO.

Substitute the word “advertising” for “TV” and imagine how much better the advertising could be.