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.
Wednesday, November 28, 2007
Monday, November 26, 2007
How Much Involvement Will $1M Buy Me?
Over lunch recently, an online publisher shared with me an RFP that he had received. The advertiser wanted to know how many impressions they could get for a million dollars.
The publisher looked at me and said, “See, they still aren’t getting it, are they?” When I inquired what he meant by that, he said, “Broadband isn’t about building reach. It’s about building relationships. Broadcast is all about how many saw the advertising. Broadband is all about how much time they spend with the advertising.”
“What advertisers should be asking is not how many impressions they can get for $1 million, but how much involvement they can get for that amount.”
“And you can tell them how involved viewers were in their advertising?”
“Absolutely,” he said.
He went on to explain how he had recently run a commercial for an advertiser on his site for six days. The commercial was two minutes and twenty seconds long. Rather than pre, or mid-roll, it was user-initiated, requiring the viewer to opt-in.
Over the course of six days, he had 1,542 unique streams to this commercial. If an advertiser were buying reach or impressions, this sort of number would receive no more than a grunt at best.
But when you factor in that the average time spent with the two-minute and twenty-second spot was one-minute and fifty-seconds, well, it certainly impacts the “worth” of those 1,542 streams, doesn’t it?
After all, it means the advertiser received 169,620 seconds of time spent with his brand’s message. Or, 47 hours worth.
The cost to the advertiser? Three thousand dollars.
The publisher then asked me what I found to be a most interesting question. How much would it normally cost an advertiser to get 47 hours worth of time spent with his brand?
My answer was that there is no way of knowing, as advertisers aren’t asking for a measurement of involvement in their commercials. All they want are the number of impressions, regardless whether the viewer is involved in the message or not.
Besides, in the intrusive methods deployed in broadcast, and now being adopted on broadband, there is no way of telling whether viewers are actually involved or not. Yes, they are in the room, or in front of the screen, but involved?
Who’s to say?
By allowing viewers to opt-in to the advertising, this publisher was able to monitor the viewer’s intent rather than the advertiser’s intent. When viewers opted-out, on average, after watching 78% of the message, he had an accurate measurement of time spent with the brand.
Now what’s interesting is that this publisher can still go and sell his site on a CPM or CPC basis. And, to media agencies, this will continue to be his strategy. After all, media agencies are paid to deliver eyeballs to, not involvement in, the message.
But he’s also starting to go directly to advertisers to talk about building relationships, rather than reach, on his site. And, to let advertisers know that he’ll help them optimize the different touchpoints across his site in an attempt to increase the amount of time that people spend with individual brands.
His logic, although quite simplistic, seemed difficult to refute. “There are only 24 hours in a day,” he said. So the more time a person spends with one advertiser’s brand, the less time that person has to spend with the competitor’s brand.
In this way, he said, “offering a good ‘return on involvement’ starts to offer the advertiser a pretty darn good return on investment.”
As for answering the question with which we started – How Much Involvement Will $1 Million Dollars Buy?
If $3,000 was able to achieve 47 hours of time spent, then $1M should deliver around 15,666 hours of time spent with the brand.
Or, 652 days.
Which is why we feel that this just might be a question that more advertisers will soon be asking their media agencies.
And, if they don’t know the answer, well, I happen to know a publisher who does.
The publisher looked at me and said, “See, they still aren’t getting it, are they?” When I inquired what he meant by that, he said, “Broadband isn’t about building reach. It’s about building relationships. Broadcast is all about how many saw the advertising. Broadband is all about how much time they spend with the advertising.”
“What advertisers should be asking is not how many impressions they can get for $1 million, but how much involvement they can get for that amount.”
“And you can tell them how involved viewers were in their advertising?”
“Absolutely,” he said.
He went on to explain how he had recently run a commercial for an advertiser on his site for six days. The commercial was two minutes and twenty seconds long. Rather than pre, or mid-roll, it was user-initiated, requiring the viewer to opt-in.
Over the course of six days, he had 1,542 unique streams to this commercial. If an advertiser were buying reach or impressions, this sort of number would receive no more than a grunt at best.
But when you factor in that the average time spent with the two-minute and twenty-second spot was one-minute and fifty-seconds, well, it certainly impacts the “worth” of those 1,542 streams, doesn’t it?
After all, it means the advertiser received 169,620 seconds of time spent with his brand’s message. Or, 47 hours worth.
The cost to the advertiser? Three thousand dollars.
The publisher then asked me what I found to be a most interesting question. How much would it normally cost an advertiser to get 47 hours worth of time spent with his brand?
My answer was that there is no way of knowing, as advertisers aren’t asking for a measurement of involvement in their commercials. All they want are the number of impressions, regardless whether the viewer is involved in the message or not.
Besides, in the intrusive methods deployed in broadcast, and now being adopted on broadband, there is no way of telling whether viewers are actually involved or not. Yes, they are in the room, or in front of the screen, but involved?
Who’s to say?
By allowing viewers to opt-in to the advertising, this publisher was able to monitor the viewer’s intent rather than the advertiser’s intent. When viewers opted-out, on average, after watching 78% of the message, he had an accurate measurement of time spent with the brand.
Now what’s interesting is that this publisher can still go and sell his site on a CPM or CPC basis. And, to media agencies, this will continue to be his strategy. After all, media agencies are paid to deliver eyeballs to, not involvement in, the message.
But he’s also starting to go directly to advertisers to talk about building relationships, rather than reach, on his site. And, to let advertisers know that he’ll help them optimize the different touchpoints across his site in an attempt to increase the amount of time that people spend with individual brands.
His logic, although quite simplistic, seemed difficult to refute. “There are only 24 hours in a day,” he said. So the more time a person spends with one advertiser’s brand, the less time that person has to spend with the competitor’s brand.
In this way, he said, “offering a good ‘return on involvement’ starts to offer the advertiser a pretty darn good return on investment.”
As for answering the question with which we started – How Much Involvement Will $1 Million Dollars Buy?
If $3,000 was able to achieve 47 hours of time spent, then $1M should deliver around 15,666 hours of time spent with the brand.
Or, 652 days.
Which is why we feel that this just might be a question that more advertisers will soon be asking their media agencies.
And, if they don’t know the answer, well, I happen to know a publisher who does.
Wednesday, November 14, 2007
Why Advertisers Can't Build Brands Online Using Their Current Creative
There is a lot of talk these days about whether broadband is a branding platform or a direct marketing platform. The consensus seems to be the latter.
One of the reasons is the failure of most brand advertising that runs online. The logic is simple. If branding ads don't work, than obviously, broadband is not a branding platform.
The logic is also shortsighted.
The problem isn't the platform. The problem is that most brand advertising, as currently created, isn't designed for online consumption. So when it does run online, the results are miserable, at best.
Most current branding creative is designed for intrusive platforms. Its job is primarily to cut through the clutter and create awareness for a product. If it does that, champagne is shared by all.
Now with all sorts of opportunities to put those same brand commercials online, advertisers are doing so. After all, they're already made. Already paid for.
Why not?
Because they won't work. And, to make matters worse, it's starting to skew the perception as to what broadband can ultimately be.
So, what needs to change?
First, advertisers need to accept the fact that broadband content must be created in context of control. Viewers can now come and go during a commercial when they want. And they are.
Advertisers are quite shocked when they are handed data that shows them just how quickly viewers are, indeed, abandoning their commercials.
Of course, it's difficult for advertisers to put all that wonderful work they created for broadcast aside and say, "Okay, let's start fresh." For starters, there's the money issue.
And the fragmentation of the online viewing audience doesn't help here at all.
You see, scale is needed to justify the production budgets that are required to produce the type of storytelling that builds great brands. This storytelling comes from both the agencies that create the stories and the production companies that bring them to life.
Both agencies and production companies are being priced out of the broadband market as advertisers refuse to pay the same amount for a commercial that runs in front of 200,000, as they are for one that runs in front of 20,000,000.
It doesn't make sense, granted. Everyone knows that the commercial that ran in front of 20M was really only taken to heart by 200,000, if that. But it's the justification that matters, isn't it? Not the reality.
So how are advertisers supposed to justify creating original, emotionally compelling advertising for the smaller viewing audiences inherent with broadband?
Maybe the answer is for advertisers stop thinking about impressions and start thinking about time spent. And for agencies to stop thinking about creating :30 commercials and start thinking about creating time spent.
Creating time spent?
That is a strange thought, isn't it? Especially if you're an agency. Agencies create :30s or :15s. And get paid well whether time is spent with the commercial or not.
Imagine if agencies were paid based on how much time they enticed viewers to spend with the brand.
Chances are, they would approach the assignment very differently.
After all, their goal would no longer be to interrupt and create awareness, but to invite and create involvement.
If the job is to create time spent, agencies are no longer divided along traditional or digital lines. After all, creating time spent is a very different proposition that can take on many different forms, shapes and looks.
But before going further, why are we sure time spent is the answer?
Simply because time is finite. Everyone of us has only 24 hours in our day. The more time an agency gets us to spend with one brand, the less time we have to spend with the competitor's brand.
Nor want to, if the advertising is done correctly.
Is that of value to the advertiser? I think it goes without saying.
Will that create a different type of advertising online?
Just imagine.
The broadcast platform is about creating awareness through advertising. Awareness is created through reach and frequency. Broadcast is about "how many."
The broadband platform is about creating relationships through advertising. Relationships are created through time spent. Broadband is about "how long."
If an agency's job is to build brands on the broadband platform, their job is to create a relationship.
Their job is to create time spent.
One of the reasons is the failure of most brand advertising that runs online. The logic is simple. If branding ads don't work, than obviously, broadband is not a branding platform.
The logic is also shortsighted.
The problem isn't the platform. The problem is that most brand advertising, as currently created, isn't designed for online consumption. So when it does run online, the results are miserable, at best.
Most current branding creative is designed for intrusive platforms. Its job is primarily to cut through the clutter and create awareness for a product. If it does that, champagne is shared by all.
Now with all sorts of opportunities to put those same brand commercials online, advertisers are doing so. After all, they're already made. Already paid for.
Why not?
Because they won't work. And, to make matters worse, it's starting to skew the perception as to what broadband can ultimately be.
So, what needs to change?
First, advertisers need to accept the fact that broadband content must be created in context of control. Viewers can now come and go during a commercial when they want. And they are.
Advertisers are quite shocked when they are handed data that shows them just how quickly viewers are, indeed, abandoning their commercials.
Of course, it's difficult for advertisers to put all that wonderful work they created for broadcast aside and say, "Okay, let's start fresh." For starters, there's the money issue.
And the fragmentation of the online viewing audience doesn't help here at all.
You see, scale is needed to justify the production budgets that are required to produce the type of storytelling that builds great brands. This storytelling comes from both the agencies that create the stories and the production companies that bring them to life.
Both agencies and production companies are being priced out of the broadband market as advertisers refuse to pay the same amount for a commercial that runs in front of 200,000, as they are for one that runs in front of 20,000,000.
It doesn't make sense, granted. Everyone knows that the commercial that ran in front of 20M was really only taken to heart by 200,000, if that. But it's the justification that matters, isn't it? Not the reality.
So how are advertisers supposed to justify creating original, emotionally compelling advertising for the smaller viewing audiences inherent with broadband?
Maybe the answer is for advertisers stop thinking about impressions and start thinking about time spent. And for agencies to stop thinking about creating :30 commercials and start thinking about creating time spent.
Creating time spent?
That is a strange thought, isn't it? Especially if you're an agency. Agencies create :30s or :15s. And get paid well whether time is spent with the commercial or not.
Imagine if agencies were paid based on how much time they enticed viewers to spend with the brand.
Chances are, they would approach the assignment very differently.
After all, their goal would no longer be to interrupt and create awareness, but to invite and create involvement.
If the job is to create time spent, agencies are no longer divided along traditional or digital lines. After all, creating time spent is a very different proposition that can take on many different forms, shapes and looks.
But before going further, why are we sure time spent is the answer?
Simply because time is finite. Everyone of us has only 24 hours in our day. The more time an agency gets us to spend with one brand, the less time we have to spend with the competitor's brand.
Nor want to, if the advertising is done correctly.
Is that of value to the advertiser? I think it goes without saying.
Will that create a different type of advertising online?
Just imagine.
The broadcast platform is about creating awareness through advertising. Awareness is created through reach and frequency. Broadcast is about "how many."
The broadband platform is about creating relationships through advertising. Relationships are created through time spent. Broadband is about "how long."
If an agency's job is to build brands on the broadband platform, their job is to create a relationship.
Their job is to create time spent.
Saturday, November 10, 2007
The Average Online Impression Costs 5¢. The Average Produced Second Costs $12,666. Which Would You Rather Optimize?
Everyone today seems to be talking about making advertising more relevant through dynamic insertion and behavioral targeting. And for good reason. The more relevant the ad is to the viewer, the better optimized the media buy.
At a $50 CPM, each impression is costing the advertiser 5¢. And while I know that a penny saved is a penny earned, and 5¢ is nothing to sneeze at, I'm curious as to why everyone seems to be ignoring the much larger number that's floating around.
$12,666.
This is the average cost to produce one second of TV advertising. (Average production cost for a :30 TV commercial is $380,000.)
Now here's the problem. Most commercials these days are created with a mass market in mind. Niche advertising, if created at all, is saved for print.
The reality is that we're now able to target commercials to an online audience even more precisely than we're able to in print. Yet the commercials that we're running, are, for the most part, commercials that have already been created. Which means that they are not as niche as the targeting that is delivering them.
Now I suppose that none of this would be a problem if not for the fact that advertisers are getting the viewer time spent data for their commercials. Imagine you're an advertiser that's running a :30 second spot that cost the average, $12,666 per second, to produce. Data comes back showing that most viewers opted-out of your spot at ten seconds. What this means is that those 20 seconds not watched have just become even more expensive.
What some advertisers say they are going to do is use the viewer time spent data to optimize their advertising. If they find out that viewers stopped watching at ten seconds, then they'll go in and re-work the commercial at the ten-second mark.
Unfortunately, commercial optimization is not nearly as inexpensive as landing page optimization, or banner ad optimization, or even search optimization.
Yes, advertisers could film a variety of alternatives, just in case. But, in commercial production, time is money. Which means those alternatives become even more expensive if the advertiser doesn't end up needing them.
The best way to optimize commercial production is to monetize viewer time spent with the commercial. In other words, to have the cost of the commercial be related to how long viewers are engaged in it.
The longer viewers are involved in the commercial the greater the profit to the production company and the greater the creative fee to the agency.
Working this way, unwatched seconds would cost the advertiser less per second, while watched seconds would cost more.
I've talked to many large advertisers about this approach and everyone I've talked with said that they would be more than happy to work this way with their agency. After all, advertisers don't mind paying well for success.
What irks them to no end is paying well for failure.
Of course, there are other options.
For some, the answer is to produce commercials for substantially less, in effect dumbing down the quality of their messaging. Others, those more retail-minded, are exploring the modular approach. Summer scenes for viewers in Florida. Winter scenes for those in Minnesota.
But the fact is that neither of these options are ideal for those marketers who are trying to build equity in their brands through advertising.
For them, the answer lies in allowing their agencies to earn their fee by being brilliant. To agreeing to pay their agencies well for creating viewer time spent. And little, if not.
As I mentioned, advertisers are ready. As are a handful of agencies, those more confident in their ability.
Others will follow.
After all, they have little choice.
$12,666 per second is not a figure to be taken lightly.
At a $50 CPM, each impression is costing the advertiser 5¢. And while I know that a penny saved is a penny earned, and 5¢ is nothing to sneeze at, I'm curious as to why everyone seems to be ignoring the much larger number that's floating around.
$12,666.
This is the average cost to produce one second of TV advertising. (Average production cost for a :30 TV commercial is $380,000.)
Now here's the problem. Most commercials these days are created with a mass market in mind. Niche advertising, if created at all, is saved for print.
The reality is that we're now able to target commercials to an online audience even more precisely than we're able to in print. Yet the commercials that we're running, are, for the most part, commercials that have already been created. Which means that they are not as niche as the targeting that is delivering them.
Now I suppose that none of this would be a problem if not for the fact that advertisers are getting the viewer time spent data for their commercials. Imagine you're an advertiser that's running a :30 second spot that cost the average, $12,666 per second, to produce. Data comes back showing that most viewers opted-out of your spot at ten seconds. What this means is that those 20 seconds not watched have just become even more expensive.
What some advertisers say they are going to do is use the viewer time spent data to optimize their advertising. If they find out that viewers stopped watching at ten seconds, then they'll go in and re-work the commercial at the ten-second mark.
Unfortunately, commercial optimization is not nearly as inexpensive as landing page optimization, or banner ad optimization, or even search optimization.
Yes, advertisers could film a variety of alternatives, just in case. But, in commercial production, time is money. Which means those alternatives become even more expensive if the advertiser doesn't end up needing them.
The best way to optimize commercial production is to monetize viewer time spent with the commercial. In other words, to have the cost of the commercial be related to how long viewers are engaged in it.
The longer viewers are involved in the commercial the greater the profit to the production company and the greater the creative fee to the agency.
Working this way, unwatched seconds would cost the advertiser less per second, while watched seconds would cost more.
I've talked to many large advertisers about this approach and everyone I've talked with said that they would be more than happy to work this way with their agency. After all, advertisers don't mind paying well for success.
What irks them to no end is paying well for failure.
Of course, there are other options.
For some, the answer is to produce commercials for substantially less, in effect dumbing down the quality of their messaging. Others, those more retail-minded, are exploring the modular approach. Summer scenes for viewers in Florida. Winter scenes for those in Minnesota.
But the fact is that neither of these options are ideal for those marketers who are trying to build equity in their brands through advertising.
For them, the answer lies in allowing their agencies to earn their fee by being brilliant. To agreeing to pay their agencies well for creating viewer time spent. And little, if not.
As I mentioned, advertisers are ready. As are a handful of agencies, those more confident in their ability.
Others will follow.
After all, they have little choice.
$12,666 per second is not a figure to be taken lightly.
Wednesday, November 07, 2007
According To Facebook, You're Worth More Than Lebron James
I don't know how much Lebron James gets paid for being a spokesperson for Nike. But I'm pretty sure it will be more than you're going to get paid for being a spokesperson for Nike or Blockbuster or Coca Cola or Travelocity.com on Facebook.
What you'll be getting is absolutely nothing. Which means you'll be tremendously underpaid.
This according to Mark Zuckerberg, Facebook's CEO. Well, he didn't put it exactly in those words.
Mark made it sound a lot more impressive than that. At a packed house in New York yesterday, Mark unveiled a new way to advertise. As he put it, "The next 100 years starts today, and it's going to be very different."
I'll say.
What's different about it is that everyone of us can now shill for advertisers, in a sense, become their spokesperson, and not make a cent for it. Mark assumes that people will gladly do this.
And, he's probably right. People will.
Facebook, after all, is based on the theory of "egonomics". If you stroke my ego, you don't have to worry about my wallet. On Facebook, the more friends you have the more your ego gets stroked.
And now, with Mark's idea of Social Advertising, the greater value you also offer to advertisers.
Not that egonomics doesn't make money for certain parties. Facebook's recent $15 billion valuation proves that.
But for the 50 million Facebook users, who now have the option of working for brands at no cost, little will be seen in the way of cash.
Which means they're leaving a lot of money on the table. According to Mark, more than Lebron's making. After all, as he put it, "Nothing influences a person more than a recommendation from a trusted friend."
You would think that much influence should certainly be worth something to someone.
It certainly has been to Mark.
Do you think he would mind if we all sent him an invoice?
What you'll be getting is absolutely nothing. Which means you'll be tremendously underpaid.
This according to Mark Zuckerberg, Facebook's CEO. Well, he didn't put it exactly in those words.
Mark made it sound a lot more impressive than that. At a packed house in New York yesterday, Mark unveiled a new way to advertise. As he put it, "The next 100 years starts today, and it's going to be very different."
I'll say.
What's different about it is that everyone of us can now shill for advertisers, in a sense, become their spokesperson, and not make a cent for it. Mark assumes that people will gladly do this.
And, he's probably right. People will.
Facebook, after all, is based on the theory of "egonomics". If you stroke my ego, you don't have to worry about my wallet. On Facebook, the more friends you have the more your ego gets stroked.
And now, with Mark's idea of Social Advertising, the greater value you also offer to advertisers.
Not that egonomics doesn't make money for certain parties. Facebook's recent $15 billion valuation proves that.
But for the 50 million Facebook users, who now have the option of working for brands at no cost, little will be seen in the way of cash.
Which means they're leaving a lot of money on the table. According to Mark, more than Lebron's making. After all, as he put it, "Nothing influences a person more than a recommendation from a trusted friend."
You would think that much influence should certainly be worth something to someone.
It certainly has been to Mark.
Do you think he would mind if we all sent him an invoice?
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