Thursday, October 18, 2007

The NetWorth Of Your Online Advertising

Look up the term "Net Worth" on Wikipedia and you'll find the following definition.

"In business, Net Worth is the total assets minus total liabilities of an individual or a company. For a company, this is called shareholders' equity."

It seems to me that "net worth" can take on another meaning in regards to advertising online. Of course, to do so we will need to make one word out of two, so Net Worth becomes NetWorth.

But beyond that, everything remains the same.

For example, if we wanted to determine the NetWorth of a specific commercial online, it would work something like this.

NetWorth = total assets minus total liabilities of the commercial.

In this case, the asset is the commercial itself. Let's call it a "commercial asset."

To determine the NetWorth of that commercial we just need to subtract the total liabilities. So what are the liabilities of online advertising? Not from the point of view of the advertiser. But rather, from the point of view of the viewer.

If the commercial is intrusive, most viewers would consider that to be a liability. If the commercial does not allow the viewer to be in control, to fast-forward or opt-out when they want, another liability.

If the commercial is not relevant to the viewer, yet another liability.

If the commercial speaks in the voice of the marketer and not the consumer, if it treats the viewer with a lack of respect, if it's inauthentic, or re-purposed, or over-used, yet more liabilities.

Following this formula, you'd come to the conclusion that the NetWorth of most commercials running online is very small. And, you'd be right.

The commercial itself could be brilliant, an asset among assets. And yet, because it was not delivered in the context of the viewer being in control, it becomes a liability.

According to Wikipedia, Net Worth for a company is also referred to as shareholders' equity. The same, unfortunately, holds true for the NetWorth of a commercial.

Which is no doubt why the equity that shareholders (customers) feel for most brands is as low as it is.

So take a look at your advertising. Figure out its NetWorth. If it's high, consider yourself lucky. If it's not, consider doing something different.

Because while the Net Worth of a business is not deemed to be a fair expression of the "market value" of the company, the same cannot be said for advertising.

In the digital economy, the NetWorth of your commercial has a direct correlation to the "market value" of your brand.

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