Thursday, July 12, 2007

Becoming Fluent In The Language Of Time Spent Economics

The Nielsen Net/Ratings announcement this week that they have stopped ranking web sites by page views and will instead rank them by 'time spent', appears to further the argument that the currency of the Digital Economy is changing.

While we used to buy and sell impressions, and talk in terms of reach and frequency and GRPs, we will soon all need to become fluent in the new language of time spent economics.

The value of time spent lies in the fact that time is finite. Throughout history, economies have been based on what is most scarce. In regards to the creation and running of commercials in the Digital Marketplace, this has enormous implications.

Because time is finite, the more time a consumer spends with one brand's messaging, the less time they will have available to spend with the competitor's messaging. If the messaging is indeed persuasive, the consumer will also find less need to spend time with the competitor's messaging.

As time spent is measurable, ad agencies will be able to be paid after the fact - based on how well they created time spent - rather than how much time they spent creating the work itself.

What this translates to is an evolution from labor-based fees regardless of results, to results-based (time spent) fees regardless of labor.

The question that was, up to now, being vigorously debated, was the value of an engaged viewer. A study released by OMD earlier this week seemed to shed some light on this. According to the study, an engaged viewer is eight times more valuable to an advertiser than a non-engaged viewer.

What's more, the study also indicated that 'engaged time spent' increases measurable advertising return on investment by 15% to 20% over models that only factor in GRPs.

Which means that a Return on Involvement does indeed start to provide advertisers with a healthy Return on Investment. One ROI leads to the other.

And why as this new currency of time spent - arguably the Currency of Creative - continues to evolve, so to will the language in which we will need to communicate. Already 'how many' is being replaced by 'how long'. The meaning of the word 'reach' has changed from a media term to a creative term. Did you reach them now means did you engage them?

The learning curve will be steep for many.

Translators will, no doubt, be in high demand.

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