Monday, July 02, 2007

What If Scale Doesn't Scale?

I was fortunate enough to be invited to be a panelist at OMMA Video last week in New York.

It offered me the opportunity to see a lot of the new online options for displaying video, including commercials. Of particular interest were Vibrant Media and eyewonder.

As the different ad insertion companies presented their capabilities throughout the day, it became clear that, outside of the two mentioned above, there were more similarities than differences.

Success for each company was dependent, for the most part, on the same thing.

Scale.

And I started to wonder what happens in this new Digital Economy if the concept of scale itself, doesn't scale?

The traditional advertising economy has been based on scale, or size. We bought and sold size in the form of impressions, usually on a CPM basis.

Many of these new ad insertion companies are also selling advertising space based on a CPM basis. The concern is the fragmentation of the viewing audience.

With only 24 hours in a day, and so many more options as to where one can spend their time, will scale still be able to scale?

Perhaps what we need to do is to stop thinking only about how many come to the site, or the advertising message itself, and also start to think about how long a viewer interacts with the message.

View duration data is available from most (not all) of the companies I chatted with.

Incorporating time spent data with impression or click-through rates would offer a new definition of scale based on the relationship formed with the brand versus just the number of people who come to the site.

The traditional advertising model was based on size, so the currency was impressions.

The Digital Economy is based on relationships. Relationships are about time spent.

A few of the companies seemed more cognizant of this than others. Not surprisingly, I see them as being first to the future.

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