Tuesday, July 01, 2008

The Creative ROI

In reading the trades these days, you can’t help but notice that there is an enormous amount of attention being given to quantifiable metrics.

Like it or not, one of those quantifiable metrics is time-spent with a commercial message.

Many like to argue that time-spent is irrelevant, that all that really matters is sales. I agree with half of that. Bottom line, sales are what matters most. But that doesn’t, in and of itself, make time-spent irrelevant.

The reason is this. As a marketer, you create messages of a certain length. In other words you create a certain amount of time that people can spend with your message. On the linear platform, time was available in fifteen, thirty or sixty-second increments. This time was determined by the networks.

On the digital platform, the time you have in which to present your message is yours to decide. The length of time you need in which to persuade the viewer why your product or brand is worthy of consideration is no longer pre-determined.

Say you and your agency decide you need a minute and twelve seconds. Which means you, as a marketer, will pay to have a minute and twelve seconds created.

All things being equal, it generally costs more to have a minute and twelve seconds created than it does to have five seconds created. This “cost of creation,” which includes agency time, production, editorial, music, talent, etc, is a hard cost that you incur, regardless of sales.

Initial value is returned on this hard cost in the form of viewer time-spent, measured in seconds, for dollars spent to create each of those seconds.

In other words, time-spent is a quantifiable measure on the return of the cost required to create that time in the first place. We call it a Return on Involvement, or the Creative ROI.

What it comes down to is that you pay for “x” amount of seconds, not just to be created, but to be watched. How many were? Time-spent is a measure of accountability on the cost of creative dollars invested. Not on the overall return on the marketing dollars invested.

You don’t need to hold your agencies accountable for how well they deliver time-spent in the messages they create for you. But, the fact is, the data is now available for you to do so if you wish to do so.

To determine whether or not you should, ask yourself two questions.

1. When you pay to have “x” amount of seconds created, does it matter to you how many of those seconds are actually watched (consumed) by the viewer?

2. Do you, as a marketer, believe that there is a direct correlation between the number of seconds watched and the persuasiveness of your message?

If the answer to the latter question is “no”, then you have to ask yourself, why are you paying to have unneeded seconds created in the first place?

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