Let me ask a question.
Is a thirty-second impression more valuable to an advertiser than a five-second impression?
In other words, if the measurement data shows that a viewer watched an entire thirty-second message, is this message more valuable to an advertiser than one where the viewer only was interested enough to watch the first five seconds of the spot and fast-forwarded through the rest?
It depends on who you ask, doesn't it? Ask an advertiser and the answer is usually yes. It's pretty obvious to them, actually. The longer people watch the spot for, the more value the spot has.
If you ask an ad agency, well, the answer is somewhat less defined. Ad agencies get paid based on the amount of time their people spend working on a commercial. Not the amount of time that viewers spend watching the particular commercial the agency spent so much time creating.
My question is why?
Viewer time spent can now be measured on digital platforms - online, VOD and DVR. Since this is the case, it's surprising to me that advertisers don't insist that their agencies are held accountable for how well their commercials actually involve viewers. They're paying their agency for thirty seconds. They may as well get their money's worth.
Which leads to another question. As impressions continue to fragment in the digital marketplace, is it time to consider - just consider - thinking about paying for work based on how long people watch a spot for rather than how many came to watch?
I know the argument. If viewers weren't interested, then they weren't in the target market, no harm done. The problem is that advertisers still pay for thirty seconds whether people watched all thirty seconds, or only five.
Why should they continue to pay for what didn't work?
Time spent is a way of verifying impressions. We always knew that not all impressions were created equal. We just didn't have a way of proving it.
Now we do.
Wednesday, February 21, 2007
I'll Show You The Money When You Show Me The Results
A recent article in Ad Age - Web-Video Vaults are Full, Coffers Are Not - listed fragmentation and lack of video created specifically for the web as two factors that are slowly down the growth of the online video advertising market.
My question is what effect do these two factors have on each other?
Impressions, the current basis for underwriting commercial production for television, do fragment online. While the industry is busy trying to find a way to aggregate these impressions so that they can continue to live off the old business models, would another option be to create a new basis for underwriting production?
This new basis would have to be based on what can be measured. Impressions, although the system is flawed on broadcast, did offer some degree of measurement. Creative departments were able to justify the enormous cost of their production budgets on the fact that over 20 million would see it. It's a much more difficult argument to make when only 2 million might see it. (Does this explain why a majority of online video advertising today is re-purposed work?)
So, what can be measured online that is different than what can be measured on broadcast? Time spent with a message, or viewer duration, is one thing. And time spent with a message certainly offers value to an advertiser. The more time spent with a message, the greater the opportunity to persuade someone why that product or service may be better than a competitor's product or service.
So, could a portion of the production fee be based on time spent with a message? Not the direct costs, obviously, but perhaps the profit paid to the production company? Why not the director's fee? After all, they are hired to involve people. Pay them only if they do. And as long as we're at it, why not the fee that advertisers pay the creative department for coming up with the idea? Why should agencies be paid the same whether the idea works or not?
Shouldn't the worth of an ad have some effect on its cost? If worth can now be measured as time spent, then today, it can.
Time spent is an impression in the control of the viewer. By paying for time spent, advertisers will still be paying for impressions. But only those impressions that actually offered some measurable value.
My question is what effect do these two factors have on each other?
Impressions, the current basis for underwriting commercial production for television, do fragment online. While the industry is busy trying to find a way to aggregate these impressions so that they can continue to live off the old business models, would another option be to create a new basis for underwriting production?
This new basis would have to be based on what can be measured. Impressions, although the system is flawed on broadcast, did offer some degree of measurement. Creative departments were able to justify the enormous cost of their production budgets on the fact that over 20 million would see it. It's a much more difficult argument to make when only 2 million might see it. (Does this explain why a majority of online video advertising today is re-purposed work?)
So, what can be measured online that is different than what can be measured on broadcast? Time spent with a message, or viewer duration, is one thing. And time spent with a message certainly offers value to an advertiser. The more time spent with a message, the greater the opportunity to persuade someone why that product or service may be better than a competitor's product or service.
So, could a portion of the production fee be based on time spent with a message? Not the direct costs, obviously, but perhaps the profit paid to the production company? Why not the director's fee? After all, they are hired to involve people. Pay them only if they do. And as long as we're at it, why not the fee that advertisers pay the creative department for coming up with the idea? Why should agencies be paid the same whether the idea works or not?
Shouldn't the worth of an ad have some effect on its cost? If worth can now be measured as time spent, then today, it can.
Time spent is an impression in the control of the viewer. By paying for time spent, advertisers will still be paying for impressions. But only those impressions that actually offered some measurable value.
Monday, February 12, 2007
Why Keep A Dog And Bark Yourself?
Ogilvy said that.
He was referring to clients who had a habit of rewriting the copy that the agency brought them.
Which is why I find user generated content such an interesting predicament for advertisers. Today, a consumer's love is craved to such a degree that advertisers let them make the ads. Does the advertiser then step in and re-write the ad? No, of course not. The consumer wrote it. And since they wrote it for consumers, of which they are one, they of course must know what will work.
To some extent, I think marketing directors find comfort in this. It certainly relieves them of any responsibility as to whether the advertising is any good or not.
It makes one wonder what would happen if they gave the same carte blanche to their ad agencies?
Would the work be better than it is today? Certainly.
Would it be better than what consumers can do? Without a doubt?
I know, consumers don't want to hear this. Because consumers watch ads, they think they can write them. And it's true, they can write them. They just can't write them very well.
Because I watch Law and Order would you let me represent you in a court of law? For both our sakes, I certainly hope not. So, explain to me the difference in logic with consumer generated advertising?
What makes the amateur better qualified than the professional? Is it because of the success of YouTube? Well, that's usually the argument, however flawed it actually is. 'The amateur videos draw viewers,' advertisers say. 'My agency can't draw those viewers in those numbers.'
How do you know?
Have you given them the chance? Has the brief you've given them been the same brief that YouTube videos are written against - to draw viewers? Or is the brief that your agency is working against still to move products?
Videos on YouTube are based on Egonomics, not economics. The videos aren't designed to persuade anyone. Or to sell anything. They are created to massage the ego of the creator. To see how many hits they'll get. To see how popular they are.
If marketers are going to hold their agencies accountable to the same standard - for the numbers of viewers who choose to opt-in to their commercial - then be fair about it. Step away. Back off. And don't worry about sales.
'Why keep a dog and bark yourself?' Ogilvy asked many years ago. Today the question is more pertinent than ever. After all, there seems to be a lot of barking going on.
But after all the noise subsides, where exactly do you find the truth?
He was referring to clients who had a habit of rewriting the copy that the agency brought them.
Which is why I find user generated content such an interesting predicament for advertisers. Today, a consumer's love is craved to such a degree that advertisers let them make the ads. Does the advertiser then step in and re-write the ad? No, of course not. The consumer wrote it. And since they wrote it for consumers, of which they are one, they of course must know what will work.
To some extent, I think marketing directors find comfort in this. It certainly relieves them of any responsibility as to whether the advertising is any good or not.
It makes one wonder what would happen if they gave the same carte blanche to their ad agencies?
Would the work be better than it is today? Certainly.
Would it be better than what consumers can do? Without a doubt?
I know, consumers don't want to hear this. Because consumers watch ads, they think they can write them. And it's true, they can write them. They just can't write them very well.
Because I watch Law and Order would you let me represent you in a court of law? For both our sakes, I certainly hope not. So, explain to me the difference in logic with consumer generated advertising?
What makes the amateur better qualified than the professional? Is it because of the success of YouTube? Well, that's usually the argument, however flawed it actually is. 'The amateur videos draw viewers,' advertisers say. 'My agency can't draw those viewers in those numbers.'
How do you know?
Have you given them the chance? Has the brief you've given them been the same brief that YouTube videos are written against - to draw viewers? Or is the brief that your agency is working against still to move products?
Videos on YouTube are based on Egonomics, not economics. The videos aren't designed to persuade anyone. Or to sell anything. They are created to massage the ego of the creator. To see how many hits they'll get. To see how popular they are.
If marketers are going to hold their agencies accountable to the same standard - for the numbers of viewers who choose to opt-in to their commercial - then be fair about it. Step away. Back off. And don't worry about sales.
'Why keep a dog and bark yourself?' Ogilvy asked many years ago. Today the question is more pertinent than ever. After all, there seems to be a lot of barking going on.
But after all the noise subsides, where exactly do you find the truth?
Friday, February 09, 2007
The Meaning of MindChange
The other day I was asked what the word mindchange means.
The word was originally coined by Willis Harman - a futurist, emeritus professor of Engineering-Economic Systems at Stanford University, and a member of the Board of Regents of The University of California. Harman realized that we need to change the way we think before we can hope to change the way we act.
Einstein thought along the same lines when he said, and I'm paraphrasing here - problems can't be solved within the mindset that created them, they must be approached from a new direction. How does this apply to digital advertising? What seems to be happening in the digital marketplace is that we are bringing all of our linear thinking over - reach, frequency, commercials of certain lengths (:30, :15) - and assume that things will work just fine.
Well, things aren't working just fine. And won't until we start to re-think what the actual problem is that we're trying to solve. The problem isn't that viewers are in control in the digital marketplace. The problem is that impressions, the basis for underwriting advertising over the last many years, are flat-lining. Which means that the financial foundation of the ad industry is crumbling. Instead of a mindchange, we try to change the digital platform to fit our old ways of thinking, desperately attempting to resuscitate the patient by aggregating impressions. And in so doing, hang on to the business models of the past.
But the fact is that in the world of digital media, while audiences will occasionally be large, they will more often be small, and usually, tiny. Impression-based marketing, a brilliantly functional model of the mass media, will need to evolve into something else. What that something else is, is what we need to discover.
It starts by re-thinking the problem. And understanding that the problem isn't one of aggregation.
It's one of compensation.
The word was originally coined by Willis Harman - a futurist, emeritus professor of Engineering-Economic Systems at Stanford University, and a member of the Board of Regents of The University of California. Harman realized that we need to change the way we think before we can hope to change the way we act.
Einstein thought along the same lines when he said, and I'm paraphrasing here - problems can't be solved within the mindset that created them, they must be approached from a new direction. How does this apply to digital advertising? What seems to be happening in the digital marketplace is that we are bringing all of our linear thinking over - reach, frequency, commercials of certain lengths (:30, :15) - and assume that things will work just fine.
Well, things aren't working just fine. And won't until we start to re-think what the actual problem is that we're trying to solve. The problem isn't that viewers are in control in the digital marketplace. The problem is that impressions, the basis for underwriting advertising over the last many years, are flat-lining. Which means that the financial foundation of the ad industry is crumbling. Instead of a mindchange, we try to change the digital platform to fit our old ways of thinking, desperately attempting to resuscitate the patient by aggregating impressions. And in so doing, hang on to the business models of the past.
But the fact is that in the world of digital media, while audiences will occasionally be large, they will more often be small, and usually, tiny. Impression-based marketing, a brilliantly functional model of the mass media, will need to evolve into something else. What that something else is, is what we need to discover.
It starts by re-thinking the problem. And understanding that the problem isn't one of aggregation.
It's one of compensation.
Wednesday, February 07, 2007
Engaging With Engagement
I've just finished reading an interesting article on engagement, The Open Mind, written by Erwin Ephron. As always, Erwin seems to have a better grasp than most on the issue of engagement.
If you read between the lines of Erwin's article you'll find he argues that the industry is using the pretense of trying to define engagement as a decoy, so that they don't have to change their current business models.
Is Erwin right about this? I think so. After all, trying to find a way to define engagement without knowing if that definition will ultimately be measurable, is a fool's errand. Going about it in the exact opposite way seems to make more sense. In other words, what if we took what already can be measured and see if that doesn't offer up a working definition of engagement?
So what does it mean to be engaged?
To be engaged with an ad message we know that we 1) need to be exposed to the message, and 2) spend some time with the message. Both exposure to a message and involvement in a message can be measured on today's digital platforms.
Can exposure and involvement add up to engagement? In a simple sense, yes. Sure, there are emotional factors to engagement, etc. etc. but we're looking for a working definition here. We can always complicate it later.
The problem is that both exposure and involvement (i.e. time spent with a message) can only accurately be measured after the fact. Which means this definition would allow advertisers to pay for both media and message based on how well they actually work, rather than how well everyone predicts they will work.
(Engagement, at least by this definition, becomes less like reach and frequency - media planning tools, and more like sales - an ROI tool.)
There is little argument that exposure and time spent with an ad message can be measured. All cable companies have this data. TiVo is currently selling this data. So why won't the industry agree that these two metrics define engagement?
Is it because it means that the industry will be held accountable for results? (As we all know, it is far more lucrative to be paid for the possibility of success than it is for the actuality or results.)
Of course not.
There must be some other reason that the industry keeps demanding that they need to find out how to create engagement rather than how to measure it.
But what is it? The argument - but that's what advertisers want - is no longer valid.
What advertisers want is accountability. And if exposure and involvement can now be measured and monetized, then they will have their accountability. And, in my opinion, their definition of engagement.
Whether the rest of the industry wants to call it that or not.
If you read between the lines of Erwin's article you'll find he argues that the industry is using the pretense of trying to define engagement as a decoy, so that they don't have to change their current business models.
Is Erwin right about this? I think so. After all, trying to find a way to define engagement without knowing if that definition will ultimately be measurable, is a fool's errand. Going about it in the exact opposite way seems to make more sense. In other words, what if we took what already can be measured and see if that doesn't offer up a working definition of engagement?
So what does it mean to be engaged?
To be engaged with an ad message we know that we 1) need to be exposed to the message, and 2) spend some time with the message. Both exposure to a message and involvement in a message can be measured on today's digital platforms.
Can exposure and involvement add up to engagement? In a simple sense, yes. Sure, there are emotional factors to engagement, etc. etc. but we're looking for a working definition here. We can always complicate it later.
The problem is that both exposure and involvement (i.e. time spent with a message) can only accurately be measured after the fact. Which means this definition would allow advertisers to pay for both media and message based on how well they actually work, rather than how well everyone predicts they will work.
(Engagement, at least by this definition, becomes less like reach and frequency - media planning tools, and more like sales - an ROI tool.)
There is little argument that exposure and time spent with an ad message can be measured. All cable companies have this data. TiVo is currently selling this data. So why won't the industry agree that these two metrics define engagement?
Is it because it means that the industry will be held accountable for results? (As we all know, it is far more lucrative to be paid for the possibility of success than it is for the actuality or results.)
Of course not.
There must be some other reason that the industry keeps demanding that they need to find out how to create engagement rather than how to measure it.
But what is it? The argument - but that's what advertisers want - is no longer valid.
What advertisers want is accountability. And if exposure and involvement can now be measured and monetized, then they will have their accountability. And, in my opinion, their definition of engagement.
Whether the rest of the industry wants to call it that or not.
Tuesday, February 06, 2007
Super Bowl Sunday: Opportunity Lost
Does anyone else hear the clock ticking?
If you didn’t know beforehand that some of the spots that ran during the game on Sunday were written (and in the case of Doritos, produced) by non-professional advertising types, would you have noticed just by watching?
If your answer is no, then you understand the problem. When the work of the pros cannot be separated from the non-pros, it’s only a matter of time until worth is questioned.
Sunday was the ad industry’s chance to shine. On the same playing field, in front of 90 million people, the pros had the chance to show why they’re worth every penny of the exorbitant fees they charge. Their competition - amateurs. In any other profession – take football for example – the difference would have been striking.
The fact that it wasn’t should be troublesome to the ad industry.
To any agency whose client might be questioning why they are paying the fees they are paying, Sunday was an opportunity lost. At the same time, it was a harbinger to the future. Super Bowl Sunday is unique in many ways. The major one being that viewers actually look forward to the advertising. The room is shushed when the commercials come on so that people can hear every word. Clutter – there is no clutter to break through – the viewer is waiting, leaning forward, not back.
You would think a smart agency would have taken this into account and created their commercial to work a little differently, taking into consideration the context of the viewer. The fact that this did not happen does not bode well for traditional agencies in the future.
On the digital platform – VOD, DVR, online – viewers will be able to opt-in to ads of interest – leaning forward, not unlike Super Bowl Sunday. This offers the opportunity to approach the viewer quite differently. Traditional ad agencies know how to, and are paid well for, creating ads that break through the clutter of a three-to-four minute commercial pod. Period. Create awareness and their job is done. But to offer some sort of persuasive argument to an audience that's already interested, well, that’s a skill long since forgotten.
The digital marketplace requires advertising to work quite differently than it does now. Advertising, to be effective, must understand that the viewer comes to the message, not vice versa. After watching the effort put forth on Sunday, it’s obvious that traditional agencies aren’t yet equipped to do this sort of advertising.
The good news, if there was any, is that amateurs aren’t any better than the pros.
At least, not yet.
If you didn’t know beforehand that some of the spots that ran during the game on Sunday were written (and in the case of Doritos, produced) by non-professional advertising types, would you have noticed just by watching?
If your answer is no, then you understand the problem. When the work of the pros cannot be separated from the non-pros, it’s only a matter of time until worth is questioned.
Sunday was the ad industry’s chance to shine. On the same playing field, in front of 90 million people, the pros had the chance to show why they’re worth every penny of the exorbitant fees they charge. Their competition - amateurs. In any other profession – take football for example – the difference would have been striking.
The fact that it wasn’t should be troublesome to the ad industry.
To any agency whose client might be questioning why they are paying the fees they are paying, Sunday was an opportunity lost. At the same time, it was a harbinger to the future. Super Bowl Sunday is unique in many ways. The major one being that viewers actually look forward to the advertising. The room is shushed when the commercials come on so that people can hear every word. Clutter – there is no clutter to break through – the viewer is waiting, leaning forward, not back.
You would think a smart agency would have taken this into account and created their commercial to work a little differently, taking into consideration the context of the viewer. The fact that this did not happen does not bode well for traditional agencies in the future.
On the digital platform – VOD, DVR, online – viewers will be able to opt-in to ads of interest – leaning forward, not unlike Super Bowl Sunday. This offers the opportunity to approach the viewer quite differently. Traditional ad agencies know how to, and are paid well for, creating ads that break through the clutter of a three-to-four minute commercial pod. Period. Create awareness and their job is done. But to offer some sort of persuasive argument to an audience that's already interested, well, that’s a skill long since forgotten.
The digital marketplace requires advertising to work quite differently than it does now. Advertising, to be effective, must understand that the viewer comes to the message, not vice versa. After watching the effort put forth on Sunday, it’s obvious that traditional agencies aren’t yet equipped to do this sort of advertising.
The good news, if there was any, is that amateurs aren’t any better than the pros.
At least, not yet.
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