How Engagement Can Be Monetized

It’s curious, at least to me, that the dialogue around the concept of “engagement” remains focused primarily on media. Most of the talk you hear today is about how engagement can be enhanced through pod position, time of day, type of program, etc.

And while these are all pertinent to the discussion, it seems to be counterproductive to be talking about engagement while ignoring two equally important components of it.

Viewer intent. And, the creative itself.

On most digital platforms engagement appears to be a sum game, requiring three very distinct components for it to be able to exist at all. These three components are exposure to the message, viewer control of the message, and involvement in the message itself.

Exposure to the message obviously needs to occur first. While a forced exposure—pre-roll or in-stream on digital platforms—will certainly guarantee more eyeballs to the message, whether it delivers engagement or entrapment is open to debate.

For engagement to be measured, it’s the viewer’s intent, not the advertiser’s intent, that’s most important. To measure viewer intent, viewers need the ability to avoid commercials that they don’t want to watch, as well as access those that they do.

Giving the viewer this control allows their intent to become explicit, and therefore, measurable. Disabling the fast-forward button and taking control out of the hands of the viewer also disables our ability to measure viewer intent. And without being able to measure viewer intent, we can't monetize engagement.

Once the viewer is in control, view duration of the message depends on the message itself. How it’s crafted. The selling proposition. What it says. The entertainment value.

Most advertisers, of course, would like viewers to watch the entire message. After all, if an advertiser spends the money to produce say, a sixty-second spot, they must assume that all sixty-seconds are valuable. Otherwise, they would have produced something shorter.

As each second costs the same to produce, the longer that viewers are involved in a commercial, the better the cost/value for the advertiser.

Add up these three components—exposure, intent and involvement—and the equation looks something like this.

Engagement = Exposure + Intent + Involvement

What’s interesting about this equation is that each of the three components is provided by a different entity.

Exposure is provided by the programmer, bought and paid for through a media agency.

Intent is provided through the control that the platform operator gives the viewer.

As for involvement, it will, or will not occur mostly due to the efforts of the creative agency that crafts the commercial.

Separating the responsibility for each of the components also allows us to separate the accountability for each component.

In this equation, programmers are not responsible for involvement, the creative agencies are. Platform operators are not accountable for exposure or impressions. That’s the programmer’s responsibility, to create the type of content that draws viewers.

What platform operators are responsible for is giving control to the viewer so that intent can be measured. Viewer intent becomes the pivot point that triggers the transference of accountability from the programmer to the creative agency.

If accountability can be transferred from programmer to creative agency, then advertisers will be able to pay each for what they are responsible for. And, in turn, pay the platform operators for giving them the ability to achieve this.

Dividing engagement into three separate components allows the responsibility for engagement to be properly assigned. And once responsibility is assigned, the financial models can, and will, follow.

Which offers this new math of engagement a chance to add up in more ways than one.

Dear Network Execs: Stop Already!

An article that ran in the NY Times today talks about how TV screens are becoming more cluttered with promotional ads called "snipes" that run along the bottom of the screen.

Referred to as the "lower third" of the television screen by those in the biz, these snipes are usually used to promote an upcoming show.

Not surprisingly, network execs claim that they're using these snipes judiciously, doing their best not to intrude on the viewer's experience.

C'mon, you're blocking a third of the screen. What exactly is your definition of intrusion? We both know that if you truly don't want to intrude, you wouldn't run the snipes at all.

But that's not going to happen, is it? Now that snipes are here, they're not going anywhere. Chances are, they'll only get larger, maybe taking up half the screen in the near future. (This still won't be defined as "intrusion" by the network execs.)

This isn't to say that snipes are all bad. In fact, they probably would work pretty well in the right context.

Let's say Budweiser's running a commercial on ABC. Perhaps ABC can sell a snipe to Coors to run along the bottom of the Budweiser commercial. Coors would probably pay a lot for that placement.

At least that way, we would have advertising interrupting advertising, instead of programming.

Viewers are saying that snipes are degrading their TV watching experience. No kidding. Network execs, on the other hand, are saying that the trend towards busy screens is an attempt to cater to (yes, they actually said "cater to", as if they're doing us a favor by running snipes) the tastes and habits of younger viewers who are busying toggling back and forth between TV screens, computer screens and cellphones.

The article even quotes a sociologist from the University of Pennsylvania who says that "screen clutter can be extremely eye catching". Yeah, but so can a car crash.

But the rationale I like best is the quote from the ESPN EVP of programming who said, "Viewers today are conditioned to have a lot going on at once."

Right.

What I suggest is that the TV execs go to the most frequently visited site online and take a look at how cluttered that screen is. They might learn a thing or two.

The address? google.com

The New Math Of Engagement

It seems that a large part of the problem with the concept of “engagement” is in trying to come up with a working definition of engagement.

To date, there doesn’t appear to be a clear winner. At least, not
one that everyone accepts. The most that everyone can agree on is
that engagement must be defined in such as way as to allow it to be
measured.

If that’s the case, then perhaps we should approach it from the other way around.

Instead of trying to come up with a definition, and then seeing if we can measure it, what if we started with what digital technology already allows us to measure, and from these metrics, construct a definition of engagement?

It would also help if instead of arguing whether engagement is solely the responsibility of the programmer/publisher or the ad agency, we could agree that engagement is a sum game, the responsibility for which falls on both the programmer and the brand idea that is created by the ad agency.

To keep it simple, we should eliminate any intrusive advertising—pre-roll or in-stream—from the discussion. With pre-roll and in-stream, it’s difficult to tell whether a viewer is engaged with the commercial or not. After all, both pre-roll and in-stream reflect the intent of the advertiser, not the viewer.

If we are going to be able to measure engagement, we need to be able to measure the intent of the viewer.

MEASURABLE VIEWER INTENT – THE MISSING LINK

To measure viewer intent, the viewer needs to be able to initiate the interaction with the brand idea itself, separate from the program that delivers it. This requires the brand idea to be a stand-alone unit. Fortunately, there are an increasing number of methods—from skins to bugs to ticker to overlays to telescoping—that accommodate this.

Allowing the viewer to click-in directly to the commercial would enable us to delineate where the responsibility of the programmer stops and the responsibility of the ad agency begins.

Programmers, after all, should only be accountable for what they have control over - delivering exposure to, not involvement in - the brand idea. At the same time, ad agencies should also only be held accountable for what they have control over – creating involvement in, not exposure to - the brand idea.

Allowing the viewer to initiate interaction with the brand idea does two things:
1. It allows exposure to become a measurement of engagement up to initiation.
2. It allows involvement to become a measurement of engagement after initiation.

Viewer Intent, in effect, becomes the pivot point. Once the viewer has initiated the interaction with the commercial, it signals the transference of accountability for engagement from the programmer to the ad agency.

By giving the viewer the control to click-in, the viewer’s intent will be explicit, and therefore, measurable.

With intrusive advertising, intent is, at best, implicit only.

DATA POINTS DELIVERED

As a stand-alone unit, the brand idea will have its own set of data points, separate from the program’s data points. This allows measurement of both the program and the brand idea to occur individually. Not only will advertisers know exactly how many came to the program screen and how many watched the program, they will also know how many who came to the program screen clicked-in to watch the brand idea, and the length of time —measured as viewer time-spent–that they spent with the message.

Being able to separately measure both exposure to the program and involvement in the brand idea, would allow us to hold both the programmer and the ad agency accountable for their individual parts of the engagement process.

THE NEW EQUATION FOR ENGAGEMENT

Engagement, as identified at the start, is a sum game. But besides just context (program) and content (brand idea), a third element, the element of control (intent), is also needed to effectively measure engagement.

Therefore, the new equation would look something like this.

Engagement = Exposure (context) + Intent (control) + Involvement (content)

In this equation, programmers are responsible for exposure and exposure only.

Platform operators are responsible for giving viewers the control needed so that viewer intent can be monitored and measured.

And ad agencies are responsible for keeping viewers involved in the commercial once they have clicked-in.

This equation allows the responsibility for delivering engagement to be spread across all three of the major stakeholders. Because each stakeholder delivers a different aspect of engagement, each can be paid for their unique part of the process.

This new equation also acknowledges the one thing that seems to have been avoided up to now. Engagement is something that can only be initiated by the viewer.

If the viewer’s intent can’t be measured, then neither can engagement.

And the only way that the viewer’s intent can be measured is to give the viewer complete control.

If We Allow Viewers To Watch Advertising On Their Terms, Will They?

If you ask marketers to answer this question, they would probably hesitate. Most marketers, it seems, don’t have a lot of faith in advertising.

But, if you ask viewers this question, they might well surprise you.

No, they wouldn’t watch every commercial, obviously.

But would they watch those commercials about products, or brands, or solutions to problems that they are interested in?

Probably.

And depending on where the viewer is down the purchase funnel, they would probably watch every second of the commercial.

So, what would their terms be?

I think they would ask for two things. Number one, the advertising would have to be non-intrusive. Viewers would be allowed to come to it when they are ready.

Why do I say this?

Yankelovich did a study recently that showed that 55% of people said they “like” advertising. What they don’t like is the way that advertising is currently “marketed to them”. In other words, the way advertising intrudes on their programming and pops up online.

People know that advertising serves a function. They don’t have anything against that aspect of advertising. What they do seem to mind is being bludgeoned with TV commercials for what amounts to three years of their lives.

Can’t hardly blame them, can you?

Number two, they’d probably request that the advertising be relevant to them. The new targeting technologies will make this easier. As will the fact that if the advertising is not going to be intrusive, then it will have to be of the opt-in variety.

With opt-in advertising, the viewer determines relevance. Not the advertiser.

The result of all this? Instead of annoying 90% of the audience to reach the 10% that might be interested, it would allow the 10% that are interested to reach the advertiser.

Of course, you see the problem with the model? Apparently, the broadcast networks need 90% annoyance in order to be able to pay for their programs.

90% annoyance is what keeps the house of cards that is the broadcast industry, standing.

At least, for the moment.

But these days there are those who are spending 100% of their time to create the devices that allow people to eliminate the 90% annoyance factor.

So, the question we all need to answer is, and then what?

The curious thing is that most marketers would tell you that they would be quite successful if they could sell 10% of the people 100% of the way, rather than attempting to sell 100% of the people 10% of the way.

Which is exactly what The Digital Marketplace offers.

Of course, the media agencies will need to place the commercials where the 10% who are interested can easily find them. And then, the digital platforms will need to make them easily accessible.

From there on, it’s the responsibility of the creative agencies to deliver the 100% part, making the commercial involving and engaging enough so that the viewer will choose to stay. Common sense says that the longer a viewer chooses to be exposed to the brand message, the greater the brand’s impact will be on that individual.

The ultimate, of course, is being able to sell someone 100% of the way.

Doable? Most definitely. We're not restricted to :30 here. Since the viewer chooses to opt-in, the commercial can be as long as it remains of interest to them.

There are a handful of creative agencies that are starting to wise-up to this evolution that's occurring and accepting the value that the different data offers them. Especially, viewer time-spent data.

Knowing that viewer time-spent can be measured, these agencies are already exploring ways in which they can be held accountable for creating it. More time-spent is better than less time spent. So creating more time-spent means more money for the agency.

You could say that these agencies have already started the process of Digital MindChange.

They understand that in the digital future their job will no longer be about creating advertising for brands. Their job will be about creating time spent with the brand. Not just in the form of ads. But in all the different forms that viewers will enjoy spending time with brands.

Changes their job description somewhat, doesn’t it?

Not to mention, what we call them.

Time-spent agencies versus ad agencies? Naw, don't think so.

Engagement Engineers?

You tell me.

So Long Branding. It's Been Nice Knowing You.

Is anyone else concerned about the future of branding in the Digital Marketplace?

The reason I ask is this. The Digital Marketplace is about accountability. The primary reason that advertisers are shifting their marketing budgets online is the fact that advertising can be quantified online.

Now look at branding. While the value of branding has always been accepted, rarely has its value been quantified. Oh, we’re pretty sure it works. But we can’t directly attribute "x" number of boxes sold to our branding efforts.

Which raises an interesting question. If brand advertising cannot be quantified, does that mean that brand advertising will not created for digital platforms? Or, in other words, are we at the beginning of the end of branding?

Traditional media, while never able to generate an immediate response from the viewer, did at least offer advertisers an intrinsic value – brand equity. Digital media, on the other hand, not only delivers immediate response, but also lead generation. Both of which help to explain the large amount of media dollars shifting from offline to online.

As this shift to online continues to increase, so too will the type of advertising that is designed to deliver immediate response and drive value to a marketer’s bottom line.

What loses out is branding.

Instead of trying to develop a premium image that allows higher margins, marketers will resort to creating brand equity through price and promotion. When price and promotion advertising becomes the bulk of all advertising, those agencies that understand what it takes to build a brand, lose their reason for being.

Taste and style leaves advertising. And when taste and style departs, so too, does talent.

So how do we stop that from happening?

Obviously, the answer isn’t to get new media to adopt the same unaccountable standards as traditional media. That would be a step backwards.

Instead we need to apply the accountability metrics of digital technology to brand advertising.

Is that possible?

Let's take one of those metrics that is now readily available—viewer time-spent—and see if we can apply it to make brand advertising accountable.

The first thing we would have to agree on is that viewer time-spent can serve as a surrogate for engagement.

Here's why. According to a recent study by OMD, one engaged viewer is worth eight regular viewers. As well, engagement in a commercial message increases measurable advertising ROI by fifteen to twenty percent.

In other words, according to the OMD study, engagement can be quantified. The hold-up is coming to an agreement on what can serve as an accurate measurement of engagement.

Obviously, viewer time-spent can't serve as a surrogate for engagement with pre-roll or in-stream advertising. In fact, it can't serve as a measurement of engagement with any form of intrusive advertising simply because intrusive advertising doesn't allow us to measure the intention of the viewer.

Where it does seem to offer an accurate measure of engagement is when the viewer is allowed to initiate the interaction with the commercial by clicking in. Logic would seem to say that once viewers engage by clicking in and start watching, they disengage, or click-out, when the commercial loses interest or relevance.

Yes, they might let the commercial run as they go and check their emails. But chances are, since they clicked-in to the commercial because they thought it would be interesting, they'll click-out when it proves otherwise, rather than just letting it run.

That's one of the benefits of being in control. You're in control.

So under these conditions—when the viewer is in full control of their viewing options, and we allow them to initiate interaction with the commercial—it seems as if time-spent might just possibly work as an adequate surrogate for engagement.

If that's the case, and as viewer time-spent can now be measured in over 35 million homes offline and over 59 million homes online, it would offer the industry a scalable method of making branding accountable on digital platforms.

Which in turn will encourage advertisers to continue their branding efforts in the Digital Marketplace.

Is that important? Yes.

Is it perfect? Of course not.

But neither is living in a world without taste. A world without style. A world without emotion.

A world only focused on the bottom line.

In other words, a world without brands.

From Impression-Based Marketing to Involvement-Based Marketing. How Ready Are You?

The signs are becoming increasingly more evident that the advertising industry is evolving from an impression-based business model to an involvement-based business model.

Crispin Porter + Bogusky’s interest in looking at TiVo’s viewer time-spent data—which measures how long a viewer is involved with a commercial—is just the latest case in point. While Crispin is the first non-media agency to focus on viewer time-spent, they most certainly won’t be the last.

Time-spent also gained credibility with Nielsen Net/Rating’s recent announcement that they will start measuring time-spent rather that page views.

Add to that the rise of social networks and the pundits now claiming that the digital economy is rapidly becoming the “Relationship Economy.”

And relationships are about? That’s right. Time spent. Need proof? Just ask your spouse.

But the question is, as viewer time-spent with a message—which can now be measured in over 35M homes offline and over 59M homes online—continues to gain in credibility, what are advertisers doing about it?

Most, very little.

In fact, if asked, most advertisers will tell you that they are unaware that their media buying agencies already possess viewer time-spent data. Or, that it’s currently being used in an attempt to plan and buy media more efficiently.

But is that truly the best use of time-spent data? Should it be used to make media more efficient? Or, creative?

Granted, exposing a particular commercial to the greatest number of relevant viewers is the media agency’s domain. But the amount of time the viewer decides to stay with the message, once exposed, is not. That’s the responsibility of the creative agency.

Or, at least, it soon will be.

It’s only a matter of time before Marketing Directors take a look at viewer time-spent data; and seeing that viewers watched, say, only 10% of their commercial, start questioning why they’re still paying full-fare for the other 90% of the spot.

And it won't be long after that before a Marketing Director walks into the agency and says, “Listen, what if instead of paying you for the amount of time your team spends creating the commercial, I pay you for the amount of time the viewer spends watching it?

What happens then? Well, that’s when the other shoe drops, doesn’t it?

After all, instead of paying for effort, advertisers will be paying for outcome. Instead of labor-based fees regardless of results, agencies will be working for results-based fees regardless of labor.

The hue and cry from the agency side will, no doubt, be tremendous. The reasons why time-spent compensation is ill advised will be many. It is, after all, not in the best interests of most agencies to see the compensation model change at all.

But they’ll really have little choice in the matter.

Because the fact is, Marketers are starting to understand the value that viewer time-spent offers them. There are only 24 hours in a day. Which means the more time a viewer spends with their brand’s messaging, the less time they’ll have to spend with their competitor’s brand messaging.

It doesn’t require a large leap of faith to believe that the longer a person is exposed to a brand message, the greater the brand’s impact is on that individual.

Where a leap of faith is needed now is for an agency to see the value that time-spent also offers them. For years now, agencies—at least the good creative agencies—have been looking for a way that good work could be worth more than bad work.

And now advertisers are saying that they’re ready to define good work as work that involves viewers. What’s more, they’re willing to pay more to the agencies that can create involving work.

You would think agencies would all be jumping at this opportunity at once. But don’t count on it. Most, in fact, will deny it’s an opportunity at all. Evolution, after all, happens slowly.

Thomas Huxley, a biologist and contemporary of Charles Darwin’s, perhaps put it best when he said this about evolution, “New truths began as heresies.”

It'll be interesting to see who the heretics are among us.