Wednesday, November 28, 2007

Second-By-Second-By-NBC

First it was Starcom, a media agency.

Followed by Interpublic.

Crispin Porter & Bogusky was next, the first creative agency to sign up to get TiVo’s second-by-second data.

And now, NBC, the first network. But, by no means, the last.

Second-by-second data is finally being recognized as something worth having. That’s because it can finally be monetized.

Obviously, everyone is looking for the right model for how media should be priced. Impression-based media models will continue to exist on the intrusive platforms, i.e. linear broadcast platforms and online where pre-roll still exists. But on those non-intrusive platforms, where viewers can choose to watch advertising that interests them, involvement-based marketing models are coming to the fore.

Mike Pilot, NBC Universal’s president of sales and marketing, put it this way. A second-by-second deal allows not only new ad formats but also measurement of consumer reaction — whether viewers who opt in are more engaged in ads they choose to see.

In other words, Mike wants to see if viewers are more engaged in ads they choose to see than in ads they don’t choose to see? C’mon, Mike, you already know the answer to that. We all do.

The real question is how does NBC continue to make money as intrusive advertising, their bread and butter, continues to lose favor?

And that’s why second-by-second data will soon be replacing impressions as the measurement of choice for many. After all, second-by-second data lets advertisers know when people stopped watching their commercials. At first, the networks thought that was a bad thing. But now it appears as if they’re starting to come around.

After all, if networks can tell an advertiser when people stopped watching their commercial, aren’t they offering a service to that advertiser? If the advertiser knows that viewers stopped watching 10 seconds in, then advertisers have the chance to change the advertising before spending copious amounts of money on distributing a commercial that isn’t working.

It’s simple optimization. Advertisers pay for optimization all the time. They just never realized that they could pay for optimizing their creative product.

If NBC has this data, then they just need to monetize it in such a way so that advertisers can pay their creative agencies based on how involving they’ve made the commercials.

Impressions, after all, aren’t all created equal. Most advertisers will tell you that a thirty-second impression is more valuable than a three-second impression. Especially if they paid premium dollars to have thirty seconds created.

Which is why it makes sense for NBC, as well as for all the other networks, to have this information. Monetize it with a Return on Involvement model and they’re looking at a new revenue stream. Granted, it will be small at first. But it’s something that will help subsidize, and over time, perhaps replace the failing CPM model.

It also makes great sense for the creative agencies, the likes of Crispin, Wieden, Goodby, BBDO, etc., to start working with this data. It’s inevitable that advertisers will use this information once they have it. How can they not? Say that you’re a marketing director and the data shows that viewers stopped watching your thirty-second commercial ten seconds in. Once knowing this, wouldn’t you be hard-pressed to want to pay your agency full-fare for what obviously didn’t work?

I know I certainly would be.

Creative agencies need to come to terms with the fact that failure will no longer be lucrative. And that success – defined as creating time spent with a brand — will be handsomely rewarded.

As for Starcom paying for second-by-second commercial data, well, that’s always befuddled me. Their job is to bring viewers to, not involve them in, the commercial.

Perhaps the only reason they jumped so quickly to obtain the data is that they realized before most that as their currency of choice — impressions — continues to become devalued, the art of media buying becomes less of a differentiator.

Which means they will need something else — re-seller of data? — to justify their fee.

By the way, if anyone knows Mike Pilot, tell him to give me a shout if he's looking for a Return on Involvement model to help get him started down this new path.

I’ll be more than happy to point him in the right direction.

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