Fragmentation is good. Fragmentation is great. Long live fragmentation.
As you probably have surmised, I’m a big fan of fragmentation. Why? Less waste. As the fragmentation of the viewing audience continues, advertisers will only have to spend money to reach those that are interested, versus those that aren't.
In a nutshell, fragmentation eliminates the waste of mass marketing.
Will an advertiser’s overall audience be smaller? Of course. But with mass marketing, we have always known that we needed to talk to 100 to find the 10 who might actually give a damn about what we're selling. Imagine not having to talk to those 90 and only to those 10?
Seems rather idyllic, doesn’t it. Almost “green” in a sense.
Mass media content companies, of course, are not big fans of fragmentation. They have built their empires based on waste. In some ways, they are analogous to the oil companies of today. They need to find ways to make more "viewer-efficient" vehicles. Which they're not finding to be easy.
Of course, all is not perfect with fragmentation. In fact, there is a very large problem that most seem to be avoiding. The more focused the target, the more focused the advertising must be if it is going to have any chance of being successful. Which means advertisers can’t be running the same stuff they run in the mass media to these more targeted audiences.
They will need to create new stuff. The problem is that production dollars have traditionally been based on the size of the media budget. Ten percent was the norm. Sometimes as high as 15%.
As the audience becomes more fragmented and targeted, less media dollars will need to be spent. Which means fewer dollars willl become available for production.
Oh, I know that there are those that argue that because the price of equipment has become more accessible, anyone can make a commercial.
No argument there. Just watch TV sometime. It seems like anyone that can, is making commercials. Perhaps that’s why there are so few good ones.
But good video advertising relies on emotion to help make the sale. And emotion most often lies in the elements of production – music, lighting, cinematography, direction, acting, writing – elements that if done well, are not cheap.
Which is why good video advertising will remain expensive to create. And yet, smaller viewing audiences will make it difficult to justify the production dollars needed to create the emotionally compelling stories required to build brands.
With our improved targeting, we’ll be talking only with those who should actually be interested in the product that we are talking about. To offer them an inferior commercial in terms of quality just because the audience is smaller, seems ludicrous at best.
So, while on the media level fragmentation means less waste, on the creative level it could easily lead to a wasted opportunity.
The good news is that as viewing audiences become more fragmented, they also become more transparent. Advertisers will not only know how many are watching the programming, but also, how many are watching their advertising.
Could they not use this data to devise a way to make the cost of creative development dependent on how well the commercials are consumed by viewers?
The more that watch the commercial and the longer they watch it for, the more that commercial justifies the cost of production. So, the more the advertiser should be willing to pay the agency that created it.
Working in this manner, advertisers can start turning data into dollars. And, action into accountability.
Because the fact is, in the digital marketplace, audiences will occasionally be large, but more often small, and, usually tiny.
If it’s no longer going to be about how many saw the commercial, perhaps it's time to start finding ways to pay based on how long they watch the commercial for.