The Currency of Creative

The economy of the ad industry has traditionally been based on media. Media was where the bulk of an advertiser’s budget went, so media floated the economy.

Impressions were bought and sold with little regard as to whether the viewing of the commercial was ever consummated.

Like it or not, we had little choice. An impression was as granular as our measurement methods could get.

Digital is changing all of that. And, along with it, the economics of video advertising. While media will still be where the bulk of an advertiser’s budget will go, a new currency is starting to come into play.

The currency of creative.

Credit both the granularity and transparency of digital for this change. Advertisers will know not only how many started to watch their commercial, but also, how long they stayed engaged with it. This, will in turn, enable us to move from impression-based marketing to involvement-based marketing.

From a media economy based on size. To a creative economy based on time.

Economies, as a rule, are governed by what is most scarce. Today, time is our most precious resource. No matter how you slice it, there are only 24 hours in a day. As the competition for our time/attention keeps increasing both online and off, the supply remains finite.

Viewers will find themselves making rational choices as to where to allocate their time and attention in regards to both the programming they watch and the commercials that they engage with. Trade-offs will be necessary. These trade-offs will prove especially critical to a marketer’s success.

Because the pool of each individual’s time is finite, time spent with one brand’s advertising, is more than anything else, time not spent with the competitor’s advertising. This alone offers value to advertisers. Since people don’t normally buy from strangers, time spent with a brand’s advertising should correlate directly to sales.

As the value of time spent becomes better accepted, advertisers will start to pay their agencies based on how well they create this value. The more time the viewer spends with the commercial, the better it will be for the advertiser. Hence, the more they should be willing to pay their agency. The reverse, or course, will also hold true.

In this new ‘results-based’ economy, failure will no longer be lucrative.

Television, whether viewers choose to watch it on an online or offline platform, is evolving into an on-demand, non-linear business model. Advertising that intrudes will be over-ridden by consumers as they gain more control. Pre-roll and in-stream, the intrusive advertising formats used today, are only incorporated because they are familiar.

Not because they work.

As viewers are allowed to initiate the interaction with commercials about products, or brands, or promises that interest them, a ‘start point’ for engagement is registered by the platform operator. The intent of the viewer, rather than that of the advertiser is measured. Unlike with Nielsen and impressions, we will know that someone is actually in the room.

As long as the commercial is worth their time, i.e. it addresses some need or desire they have, viewers will stay engaged.

There are those who will argue that few, if any, will ever opt-in to a commercial. And, perhaps they’re right. But the counter-argument is that people won’t mind investing time, as long as they control the time invested. Giving them complete control, allowing them to opt-out of a commercial when they want to, gives the viewer the freedom to opt-in in the first place.

Once they do, it is the creative’s responsibility to keep them there.

The naysayers among you will contend that agencies will just create entertaining schlock that doesn’t sell squat. And, you’re right. Some will. No doubt, the same agencies that are creating entertaining schlock that doesn’t sell squat today.

But those agencies that understand that the art of advertising is not just to entertain, but to involve and persuade, will appreciate the opportunity this new currency offers.

A measurable way for good work to be worth more than bad work.

As for advertisers, paying for creative based on time spent offers them the accountability that they have been looking for. Rather then compensating their agency based on the amount of time spent working on the creative, compensation will be based on the amount of time viewers spent watching the commercial.

Outcome, rather than effort, will be rewarded.

Impressions, obviously, won’t go away. Nor should they. But as viewing audiences continue to fragment in the long tail of the digital marketplace, impressions will become further devalued.

As that happens, a new way to buy and sell advertising will be needed.

Time spent, in reality, is nothing more than an impression in the control of the viewer. And viewer-control, as we all know, is what the digital future holds.

It’s a future where the best way that advertisers can regain control is to give the viewer complete control, measure what they do, monetize what is measured, and pay based on results.

Not just for media.

But also, creative.

Non-Intrusive Relevancy. A New Prototype.

There's an interesting VOD platform that is now up and running in the Midwest.

I'm biased about this platform as I helped to develop it.

It looks like this.



If you look across the bottom of the screen, you'll see three options: View Now, Cancel, and what is called an Ad Badge. The Ad Badge reads "The Story of the 50 Foot Gimme", with the Titleist logo next to it. When a viewer clicks on this Ad Badge, it immediately takes them to a story about a 50 foot gimme. The viewer can stop watching the story whenever they tire of it. Or, they can watch the whole thing if they find it interesting.

The viewing decision, after all, is entirely in their control.

But perhaps the most unique aspect of this platform is that it allows advertisers to target programming content (in this case, "The Perfect Golf Swing" on Sportskool), without being intrusive to the programming content itself.

In other words, the platform doesn't just offer relevancy, but non-intrusive relevancy.

Now your first reaction might be something along the lines of, "Yeah, right. But who is ever going to opt-in to watch an ad on their own volition?"

And the only correct answer is - those who are interested in what the ad has to say.

As you see, the Ad Badge indicates the type of message that the viewer can expect to see when they click on it. If the commercial doesn't disappoint those expectations, and if it's entertaining and involving and intriguing in how it presents the story, then, chances are, viewers will stay.

What we have found out in the initial trials is that viewers don't mind investing time if they control the time invested. This platform was designed to give viewers complete control.

But back to the question as to how many are going to opt-in in the first place? In total, not many. The reason is the niche aspect of the program itself.

As you can see, it's a golf show. So only golfers would have any interest in navigating to this program in the first place.

Obviously, this reduces the size of the potential viewing audience considerably.

That said, it also reduces waste on the part of the advertiser. After all, Titleist really only wants to talk to golfers. This platform offers them the opportunity to do just that.

So while it wasn't surprising that the total number of viewers was low, what was surprising was that the percentage of viewers opting into the ads was high. The average opt-in rate to Ad Badges across programs was 18%. Some programs had up to 59% of the viewers who came to program opting-in to the Ad Badge.

The other interesting aspect of the platform is that it accurately measures how long viewers are engaged or involved in the ad. In other words, once interested viewers clicked-in, how long did they stay?

Allowing viewers to initiate the interaction with the commercial gives a definitive starting point and a more accurate measure of engagement than what is available through current pre-roll, mid-roll or post-roll options.

Why is this important?

With niche programming, the total number of viewers and/or impressions will always be smaller than what traditional media models consider to be worthwhile. So there needs to be another way to offer value to advertisers outside of impressions.

Measuring time spent offers advertisers a way to optimize their creative product. They will know when viewers stopped watching and can adjust the creative before increasing the distribution across other platforms.

That said, just measuring time spent isn't enough anymore.

Advertisers are looking for ways to use the time spent data. So in addition to measuring time spent, this platform is also introducing a way to monetize it.

By monetizing time spent, advertisers have the opportunity to pay their creative agency based on how well the creative actually involves those who choose to watch it.

In other words, it offers advertisers creative accountability.

The name of the platform?

Ingage.

More results are available for those who are interested.

The Economics of Creative: Part II

In the world of linear advertising, production dollars are based on large audience size and repeat exposures. Neither of which will be prevalent in the digital world of niche audiences.

So how can advertisers afford to create original content for the smaller viewing audiences inherent in the digital marketplace? Alan Schulman, in a recent column, suggested that the answer is to go lo-fi and to spend less money on production.

The fact is, we may well have no other choice. After all, if we continue to justify the cost of production on impressions, then certainly fewer and fewer dollars will become available for original content on digital platforms.

And lo-fi may even work well for awhile. But today, over half the TV sets sold in America are 50” or larger. And chances are lo-fi will prove woefully inadequate when watched on 50” hi-def screens mounted in living rooms across the country.

But what if the answer isn’t to spend less due to fewer viewers, but to justify our production dollars based on something besides viewers?

Instead of how many, for example, what if we paid for creative based on how long?

Or, in other words, time spent with the message.

Time is, after all, finite. There are only 24 hours in a day. Which means that time spent with one brand’s messaging is time not spent with a competitor’s messaging.

As people seldom buy from strangers, time spent can add up to a competitive marketing advantage.

If time spent is of value to advertisers, should it not also be of value to those that are hired to create it, i.e. the ad agencies and production companies?

How would that work if that were the case?

Today time spent is already being measured on VOD, DVR and online platforms through second-by-second data. But to be able to accurately monetized time spent, one other criteria must be met.

The advertising must be non-intrusive so that viewers can opt-in to watch it when they want to watch it.

Why?

Opting-in measures the intent of the viewer rather than the intent
of the advertiser. Once someone opts-in and triggers the ad,
second-by-second data indicates how long they stayed engaged in the
ad. Aggregate numbers can be delivered saying whether 30% of the
viewers watched, on average, 80% of the spot. Or 10% of the viewers
watched, on average, 20% of the spot.

By allowing the viewer to initiate the interaction with the commercial, it allows time spent to become an accurate measurement of engagement with the commercial.

What’s more, when someone opts-in, chances are they are in the room and in front of the screen when the commercial plays. Not all the time, mind you. But certainly at a more accurate percentage than what Nielsen can offer.

Monetize this second-by-second data in such a way so that the longer viewers are engaged, the more the production company and the ad agency make, and what you are looking at is a new production model for content creation.

A production model based not on how many, but how long.

A production model that encourages advertisers to create original content, even though viewership may be low.

A production model based on where the digital marketplace is going, instead of where the analog marketplace has been.

Attempting to fit our linear production models into nonlinear platforms is creating digital liabilities. What advertisers are looking for today are digital assets.

Yes, time is still money.

But time spent will become gold.

The Economics of Creative: Part 1

While much attention has been paid to the fragmenting viewing audience and what the devaluing of impressions will mean to media, little has been discussed in regards to what it means for the production of commercials.

Alan Schulman's recent column in Video Insider touches on the subject and suggests that commercials will need to be produced less expensively.

He refers to it as going "lo-fi".

As Mr. Schulman is smarter than most in regards to this topic, it's difficult to argue with his prognosis. And, the fact is, the industry does need a new way of thinking.

After all, the current economics of production can only be justified through large audience size and repeat exposures. Neither of which will be prevalent in the digital world of niche audiences.

But is the only answer to go lo-fi as Mr. Schulman suggests? Are we going to finally have a platform that allows us to talk, without waste, to only those that are interested in our brands, and end up having to portray our brands in a less than desirable way?

Today, the cost to produce a thirty-second spot averages $380,000. That's $12,666 per second. At one time, agencies could defend these costs by the fact that twenty million people would see the spot three plus times. That defense becomes a bit porous when only two hundred thousand might see it, at best.

But the fact is, these two hundred thousand aren't any less important. It could be argued that they are, indeed, even more important.

So, why should they be handed an inferior product?

There will be those that will argue that the cost of production was inflated to start with. And there is truth in that argument. Cappuccinos and lattes flow like water on the set of a commercial shoot. But that doesn't mean that $50,000 will deliver the same quality of message as $400,000.

Others will argue that the tools are more affordable now, so the cost should be lower. Today, everything is digital, smaller cameras are needed, smaller crews, you can edit on your laptop on the way home from the shoot.

And, yes. All of this is true.

As is the fact that YouTube videos shot with a hand-held camera that took only 30 minutes to film and cost maybe $20 bucks to put together are drawing 10 million viewers online.

So, naturally, advertisers are asking, "Why should the ad for my brand cost as much as it does to produce?"

And maybe the best answer, and perhaps the only answer, is just that. It is an ad for your brand. And an ad's job is very different than that of a YouTube video. An ad's job is to build your brand.

Brands are built on emotional, not rational connections. And emotion, like it or not, costs money.

Consider: The difference between an expensive car and a cheap car isn't found in the concept. Functionally, they are about the same. And yet, the expensive car evokes a positive emotional reaction while the cheap car is boring.

The difference is in the details.

And it's in these details where the emotion lies. In some cases, details are simply a matter of taste and style. But in all cases, details cost money. Whether you're producing cars.

Or, commercials.

So, while it's true that one can always create less expensive advertising, the tools, after all, are there, it doesn't mean that it will be equally as successful advertising. If done correctly, a $300,000 commercial can't help but have much greater impact, memorability and involvement than a $100,000 commercial. Which means it will create a much stronger emotional bond with with the viewer.

And in turn, a stronger brand for the advertiser.

Mr. Schulman mentions that in this age of viral video, it's a commoditized world. He is right in one aspect. The tools of the trade have become commoditized.

But not the talent that it takes to create what truly works on the levels that advertising needs to work if it is going to be successful.

If it is going to build brands.

Now that the digital marketplace has created such a wonderful way for people to reach advertisers, let's hope that advertisers don't forsake what it means to reach people.

More on this will follow. Including a way to continue to produce high quality work for the smaller viewing audiences that are inevitable in the digital marketplace.

Thoughts On The User-Generated Future

The big question at the Internet Advertising Bureau's User-Generated Conference this week was which is more valuable: advertising around user-generated content? Or, using user-generated content to create ads?

My question is, is that the right question? Or, should the question be, which is more valuable: user-generated content? Or, user-generated distribution?

Obviously, since I raised the question, I'm leaning towards the latter.

If an advertiser can create content so interesting that it is passed around by users, isn't that the ultimate?

In fact, I don't think it's content that the industry is talking about when they're talking about user-generated content. It's really distribution. Content created by an individual that no one watches isn't the user-generated content that advertisers usually reference.

What they want is a viral infection. Content that is so intriguing, interesting, motivating, okay, weird, that users will send it to all to see.

Whether it shows their brand in a good or bad light, seems to be less relevant than the fact that 10 million people have seen it.

Today it seems that everyone has accepted the fact that advertising agencies can't create intriguing, interesting, motivating, okay, weird, content.

Until an agency does a something that goes viral.

"Okay", the industry says, "but that's an anomaly." True enough.

But so is a really good piece of advertising content created by an amateur.

My question is, can 'user participation' be equated to sharing, rather than creating? I'm not sure. But I believe it can. The Web is a social medium. It's about sharing. Everyone on the Web can easily share.

Creating is harder. Creating something good is harder still. Creating something good about a brand's promise is damn near impossible.

To send something on to someone else means that you endorse it. It is still peer to peer interaction. It's still participation in a brand whether you have created it or not.

And, it's so much easier.

Perhaps the best tool that we can give users to participate in brands is the type of advertising that they want to share.

But that requires advertisers giving their agency creators the same freedom that they give their non-agency creators.

Some advertisers understand this.

Unfortunately, their numbers remain small.

Attention versus Engagement: Why They Are Not The Same

I just read an interesting summary paper - How Do We Predict Attention and Engagement? - from the University of Bath School of Management.

The summary, written by Dr. Robert Heath, concludes that Attention and Engagement are two very different constructs.

According to Dr. Heath, The Level of Attention is the amount of conscious 'thinking' going on when an advertisement is being processed; while the Level of Engagement is the amount of subconscious 'feeling' going on when an advertisement is being processed.

Engagement works entirely in the subconscious. Attention works entirely in the conscious.

Engagement is an emotional construct. Attention is a rational construct.

Which brings me back to previous discussions on the fallacy of networks being able to offer engagement. If engagement is an emotional construct, then engagement is the privy of the ad agencies, not the networks.

Now that there is research that backs up what good agencies have always known, why are the agencies not standing up and claiming accountability for delivering engagement? Why are they allowing their only reason for being to evaporate?

To determine what a commercial should say is fairly straightforward. One does not need an ad agency to figure that out.

An ad agency's sole reason for being is to add the emotional element to a piece of communication - the 'how' of how the ad communicates.

It's the 'how' of how a message is communicated that's always separated the good agencies from the rest of the herd. And it's the 'how' that leads to sales.

At least, according to Dr. Heath.

In his summary, Dr. Heath indicates that purchase decisions are made subconsciously. In fact, the emotive power of a message shows a significant linear relationship with a shift in intent to purchase, while a message's cognitive power shows no relationship at all.

What Dr Heath is saying is that engagement, not attention, leads to sales. He goes on to mention that for this to happen, "the engagement needs to relate to a brand idea and not just the execution itself".

So much for branded entertainment.

Which raises a question - can engagement be measured? After all, if agencies are going to want to be held accountable for engagement, then we need some way of knowing that engagement actually started.

In the interruptive model of advertising that has been prevalent up until now, that's impossible.

But as intrusive advertising platforms evolve into digital, opt-in advertising platforms, this changes. When viewers opt-in, it is possible to measure the intent of the viewer, the start point, if you will, of engagement.

Opting-in is a form of physical engagement on the part of the viewer. It's driven, by a rational desire to see or know more about something. How long they stay engaged/involved is more complicated.

Yes, time spent with a commercial can be measured when viewers opt-in , and time spent is being measured on digital platform today. But is time spent with a message due more to engagement - the subconscious at work - or attention - the conscious at work?

That answer is still to be determined.

But my guess is that the answer will lie in the context in which the content is received and/or processed. Commercials watched online are processed in a very different way than commercials watched on TV. It's not unlike how newspaper and TV ads are processed very differently. The former conforms to a systematic goal-driven, top-down processing model, while TV conforms to an automatic, stimulus driven, bottom-up processing model

Reading a newspaper is cognitive. Watching TV is emotive. Or, can be. TV uses sight, sound and motion - it appeals to more senses. Yes, online does as well - it is still screen media. But the user is more goal-driven when online, and less so when in front of a TV.

What are the implications?

Agencies will need to create different types of creative for online vs offline viewing. It may well all be sight, sound and motion media, but a 50" living room experience is vastly different than a 15" desktop experience.

While both experiences will be needed to build a brand, the creative objectives should be quite different.

I want to thank Dr. Heath, and The University of Bath School of Management, for their insights.

Is Pandora Out Of Her Box?

Today, Nielsen officially releases its commercial ratings.

The sellers of ad space, the networks, will spin the ratings as proof that viewers watch commercials. The buyers of ad space, the media agencies, will spin the ratings as proof they don't.

In that sense, nothing has changed.

But in another sense, everything has changed. The simple acknowledgment that program ratings are no longer the end all and be all is proof that more precise measurement data is indeed the future.

In fact, commercial ratings aren't the end, but only the beginning to increased granularity when it comes to metrics. Second-by-second data, now available on many digital platforms, is already being talked about as the next step.

Granted, there are those who claim otherwise, that second-by-second data is just plain overkill. "Who really cares?", they chirp.

Well, the advertiser, for one.

Why?

Simply because today, the average thirty-second commercial costs $380,000 to produce. That breaks down to $12,666 per second.

Not surprisingly, advertisers are interested to know if their $12,666 was as well spent on second 23 as it was on second 3. Second-by-second data tells them this.

It also raises an interesting question.

If viewers aren't watching second 23, should advertisers be required to pay full fare for that second?

This isn't a media question, by the way. The best media can do is enable as many people to see the message as want to see the message.

That's media's job, enabling, not engaging.

Whether viewers become engaged and stay engaged in the message or not, is strictly a creative issue.

Second-by-second data will enable the responsibility of engagement to fall on the rightful shoulders. Those shoulders reside in creative agencies.

Good agencies will carry this responsibility with aplomb.

Not so good agencies will crumble under its weight.

Pandora is indeed out of her box.

Only the creative will survive.