Interesting piece on engagement written by Troy Young of VideoEgg today.
As you know, VideoEgg is the company that is charging for video advertising on a cost-per-engagement, versus a cost-per- impression basis. They sell advertising that viewers opt-in to and have complete control over. In other words, non-intrusive advertising at its best.
I’ve always believed that VideoEgg’s heart is in the right place even though their definition of engagement is currently skewed to benefit their model. After all, if a viewer initiates engagement with a video message, but leaves after only a second of viewing, has engagement actually taken place?
Whether a viewer stays for a second, or, for the entire video, the advertiser pays the same amount. Engagment, as defined by VideoEgg, means starting to watch the video, not necessarily watching the whole video.
In other words, engaging with, not engaging in the video.
Truth be told, VideoEgg is really not responsible for anything more than that. The responsibility of whether or not someone decides to engage in the video falls on the content creators themselves. All VideoEgg can do is bring the most relevant viewers to the most relevant messages to engage with, not necessarily in.
What I like about Troy’s comments is that he mentions that the “mode” the viewer is in as a critical ingredient to creating engagement. Well, at least to initiating engagement.
What this indicates is that Troy understands that media is not so much about selling space or real estate as it about selling mindsets. What mindset is the user in when using a particular piece of media? My mindset is certainly different when I’m using VideoEgg than when I am using Hulu.
If Troy is right about there being a fifteen times difference in initiating engagement based on “mode,” alone, than he’s on to something quite important. And, I for one am glad that VideoEgg is able to offer their advertisers this type of data.
But I still take issue with their definition of engagement. Perhaps two words are needed to describe the viewer’s experience. For example, engagement could be defined as when a viewer initiates the interaction with the advertisers message. And involvement could be the word that describes the length of time that the viewer decides to stay with the message.
That way Troy can still sell his cost per engagement. While, at the same time, advertisers can start holding their agencies accountable for delivering a Return on Involvement.
If it helps, think of it as an ROI for creative.
.
Friday, June 27, 2008
Thursday, June 26, 2008
FOX Gets It
Well, at least Peter Levinson, president of Fox Interactive Media, seems to.
The discussion took place at The Media Entertainment Marketing Summit. The topic was reach. The premise put forward was that new media lacked reach.
Levinson disagreed. He quoted some numbers - how MySpace has 75 million people who come to it every month; while the American Idol finale was only watched by 30.5 million people.
A huge difference to be sure. But in the digital scheme of things, relatively unimportant. That's because on the digital platform, marketers need to stop worrying about how many and start worrying how long.
Reach, in the linear marketplace, was about how many we could put our messages in front of. It was about throwing out the largest net possible.
Digital Reach is about how many consumers reach out to marketers by clicking into their messages. And, once they do, how long do they stay engaged with the messaging?
So how do marketers take advantage of Digital Reach?
Levinson had the answer. "One of the things that has struck me as odd, is that the ad spending isn't keeping up with the time spent, which is somewhat interesting," he said. "While it's easier than ever to find an audience that might be interested in a brand, the goal is to actually engage the audience. When it comes to this, creative is king."
That's why I think that FOX gets it.
Digital Reach is not just about how many. It's about how long. In other words, Digital Reach is about creative.
If a media platform offers an opportunity for more time to be spent with a brand, then that platform should be able to charge more than a platform that enables less time to be spent. After all, they're offering a greater level of potential engagement.
Which is why digital platforms that give the consumer complete control should be more valuable than, say, broadcast platforms which allow no more than thirty seconds of engagement.
The fact is, it's not the number that are exposed that we should be aggregating. What we should be aggregating is the amount of time people choose to spend with a brand's messaging.
Will FOX start doing this? Levinson didn't say.
But, they're smart. Chances are, they'll figure it out.
The discussion took place at The Media Entertainment Marketing Summit. The topic was reach. The premise put forward was that new media lacked reach.
Levinson disagreed. He quoted some numbers - how MySpace has 75 million people who come to it every month; while the American Idol finale was only watched by 30.5 million people.
A huge difference to be sure. But in the digital scheme of things, relatively unimportant. That's because on the digital platform, marketers need to stop worrying about how many and start worrying how long.
Reach, in the linear marketplace, was about how many we could put our messages in front of. It was about throwing out the largest net possible.
Digital Reach is about how many consumers reach out to marketers by clicking into their messages. And, once they do, how long do they stay engaged with the messaging?
So how do marketers take advantage of Digital Reach?
Levinson had the answer. "One of the things that has struck me as odd, is that the ad spending isn't keeping up with the time spent, which is somewhat interesting," he said. "While it's easier than ever to find an audience that might be interested in a brand, the goal is to actually engage the audience. When it comes to this, creative is king."
That's why I think that FOX gets it.
Digital Reach is not just about how many. It's about how long. In other words, Digital Reach is about creative.
If a media platform offers an opportunity for more time to be spent with a brand, then that platform should be able to charge more than a platform that enables less time to be spent. After all, they're offering a greater level of potential engagement.
Which is why digital platforms that give the consumer complete control should be more valuable than, say, broadcast platforms which allow no more than thirty seconds of engagement.
The fact is, it's not the number that are exposed that we should be aggregating. What we should be aggregating is the amount of time people choose to spend with a brand's messaging.
Will FOX start doing this? Levinson didn't say.
But, they're smart. Chances are, they'll figure it out.
Friday, June 20, 2008
When Everyone Says It Won't Work, It Probably Will
I’ve received quite a few responses to my latest post. Most we’re from people who were nice enough to inform me why basing part of the cost of a second of production on viewer time-spent would never work.
In most cases, the reasons why it will not work were familiar. Here are a few examples.
“Paying for work based on time-viewed misses the point – we’re here to sell the client’s products, not win creative awards.”
“Unless you can prove a direct correlation between time-viewed and increased awareness and sales, this proposition has no relevance.”
“If revenues depended on seconds watched, would creative agencies take on boring products?”
“Sales may rise just because there is more exposure than previously. To base compensation upon percentage of time-viewed is a delicate balance in which many agencies will decline business.”
“As a brand manager, seconds watched is not the main metric I would ever use to judge my return on investment and I am afraid that this new metric would cause production houses to focus on clever ways to get people to watch ads, when in fact they should be focused on clever ways to get customers to buy products.”
“No matter how clever the advertising is, I find it hard to believe that a viewer will watch many seconds about it, no matter how clever they get.”
I’m not going to answer each of these responses individually. But I will answer one question that comes up frequently. Is there a direct correlation between time-spent and sales?
And the answer is no. The only direct correlation that we have in regards to time-spent and sales is that if time is not spent, sales do not occur.
In my opinion, the correlation that we should be trying to make is not between time-spent and sales, but between time-spent and time paid for. The fact remains, a second of production costs money. Was that second used? Or, not. Were these seconds wasted? Or, not.
Do you, as a marketer, want to pay as much for non-used seconds as used seconds?
In other words, in production, there is a cost incurred. You purchased a certain amount of seconds to be produced, under the promise from your agency that they will be watched. If they aren’t watched, did your agency break their promise?
In the past, sales were the only measure of a commercial’s effectiveness. But today, digital data offers tremendous insights as to what is actually happening within the commercial itself, second-by-second.
I’m not saying sales aren’t important. In fact, I believe agencies should be retained or fired based on overall marketing ROI. But each individual commercial can now also has it’s own ROI (Return on Involvement).
If you pay to have 30 seconds watched, make sure that you’re getting what you paid for.
Or, pay differently.
In most cases, the reasons why it will not work were familiar. Here are a few examples.
“Paying for work based on time-viewed misses the point – we’re here to sell the client’s products, not win creative awards.”
“Unless you can prove a direct correlation between time-viewed and increased awareness and sales, this proposition has no relevance.”
“If revenues depended on seconds watched, would creative agencies take on boring products?”
“Sales may rise just because there is more exposure than previously. To base compensation upon percentage of time-viewed is a delicate balance in which many agencies will decline business.”
“As a brand manager, seconds watched is not the main metric I would ever use to judge my return on investment and I am afraid that this new metric would cause production houses to focus on clever ways to get people to watch ads, when in fact they should be focused on clever ways to get customers to buy products.”
“No matter how clever the advertising is, I find it hard to believe that a viewer will watch many seconds about it, no matter how clever they get.”
I’m not going to answer each of these responses individually. But I will answer one question that comes up frequently. Is there a direct correlation between time-spent and sales?
And the answer is no. The only direct correlation that we have in regards to time-spent and sales is that if time is not spent, sales do not occur.
In my opinion, the correlation that we should be trying to make is not between time-spent and sales, but between time-spent and time paid for. The fact remains, a second of production costs money. Was that second used? Or, not. Were these seconds wasted? Or, not.
Do you, as a marketer, want to pay as much for non-used seconds as used seconds?
In other words, in production, there is a cost incurred. You purchased a certain amount of seconds to be produced, under the promise from your agency that they will be watched. If they aren’t watched, did your agency break their promise?
In the past, sales were the only measure of a commercial’s effectiveness. But today, digital data offers tremendous insights as to what is actually happening within the commercial itself, second-by-second.
I’m not saying sales aren’t important. In fact, I believe agencies should be retained or fired based on overall marketing ROI. But each individual commercial can now also has it’s own ROI (Return on Involvement).
If you pay to have 30 seconds watched, make sure that you’re getting what you paid for.
Or, pay differently.
Tuesday, June 17, 2008
Why Does A Second Of Production Cost The Same Whether Anybody Watches Or Not?
It was the Brand Manager of a large package goods company that asked the question. “Why does a second of production cost the same whether anybody watches or not?
The agency producer who was dining with us, slowly put down her glass of wine and looked at me for help. As if somehow I would have a better answer than she.
Seeing her perplexed look, the Brand Manager interjected, “Let’s start with an easier question,” he said. “What’s the average cost of a second of production for a national 30-second TV commercial?
Looking somewhat relieved at having a question that she could answer, the agency producer started doing some quick math on the tablecloth, “The average 30-second spot costs around $380,000. So each second comes out to, twelve, wait, $12,666.”
The Brand Manager nodded, as if he knew the answer already. “So,” he continued, what if viewers just watch the first ten seconds? Could I get a discount on the twenty seconds that weren’t used?”
Interesting choice of words, I thought. A discount on seconds not used. The industry has never had the ability to look at creative in this way before—as seconds used or not used.
Digital changes the paradigm. When viewers opt-in to a commercial on a digital platform, we can now accurately measure how much of the commercial they actually watched.
Should a marketer get a refund for seconds paid for, but not used?
The answer is, of course not. The cost of producing a commercial covers the production company’s direct costs, overhead and profit. Production companies couldn’t sustain a business if they gambled with their direct costs and overhead.
“But what about profit?” the Brand Manager asked. “Would a production company be willing to put their profit into play – payable only after the spot ran and dependent on how long the viewer was engaged in the spot?”
“Fat chance,” the agency producer said, as she refilled her glass with a generous helping of wine.
Interestingly enough, I had wondered about this question myself for some time now. Which is why I recently made a trip to L.A. to talk to some production companies and directors. Not just your run-of-the-mill production companies, but those that house film directors, great storytellers, the ones who generally make movies rather than commercials for a living. After asking the heads of these companies if they would put their profit into play—under the auspices that they would make more than they normally would if they maintained interest in the commercial—they all answered identically.
“Yes.”
What’s more, after discussing the idea further, most also offered to put the director’s day rate into play. Which meant that, on average, without sacrificing the quality of the production, the upfront costs were reduced by twenty to twenty-five percent.
Their only caveat? The advertiser had to relinquish creative control back to the agency.
In other words, if the advertiser wants some accountability over the costs of production, the advertiser needs to loosen the reins on trying to control the creative.
So, I asked the Brand Manager about it. “Would you be willing to give up creative control?” I asked.
“If I approve the strategy and the script, and the agency knows their job is to bring back that script in the most involving way possible, then yes,” he said. “I’d be foolish not to, wouldn’t I? After all, under this model, both the agency and I are working towards the same objective, getting the commercial watched.”
The agency producer was at a bit of a loss for words. “You mean, they can measure how long people actually watch commercials?” she asked.
“Not only that,” said the Brand Manager, but I’m going to start paying based on that measurement.”
The producer looked at me and I had to smile. For I saw in her eyes that she just finally grasped what this meant.
Advertising, which is now designed to fill a length of time – 30-seconds – will soon need to be designed to fill a viewer’s imagination. When it does, then those who created the commercial will be rewarded well.
When it doesn’t, the opposite will be true.
For the Brand Manager, it meant that he finally gets to pay for actual value received.
And, since I figured that he received more than his share of value at this dinner, I felt justified in handing him the check.
The agency producer who was dining with us, slowly put down her glass of wine and looked at me for help. As if somehow I would have a better answer than she.
Seeing her perplexed look, the Brand Manager interjected, “Let’s start with an easier question,” he said. “What’s the average cost of a second of production for a national 30-second TV commercial?
Looking somewhat relieved at having a question that she could answer, the agency producer started doing some quick math on the tablecloth, “The average 30-second spot costs around $380,000. So each second comes out to, twelve, wait, $12,666.”
The Brand Manager nodded, as if he knew the answer already. “So,” he continued, what if viewers just watch the first ten seconds? Could I get a discount on the twenty seconds that weren’t used?”
Interesting choice of words, I thought. A discount on seconds not used. The industry has never had the ability to look at creative in this way before—as seconds used or not used.
Digital changes the paradigm. When viewers opt-in to a commercial on a digital platform, we can now accurately measure how much of the commercial they actually watched.
Should a marketer get a refund for seconds paid for, but not used?
The answer is, of course not. The cost of producing a commercial covers the production company’s direct costs, overhead and profit. Production companies couldn’t sustain a business if they gambled with their direct costs and overhead.
“But what about profit?” the Brand Manager asked. “Would a production company be willing to put their profit into play – payable only after the spot ran and dependent on how long the viewer was engaged in the spot?”
“Fat chance,” the agency producer said, as she refilled her glass with a generous helping of wine.
Interestingly enough, I had wondered about this question myself for some time now. Which is why I recently made a trip to L.A. to talk to some production companies and directors. Not just your run-of-the-mill production companies, but those that house film directors, great storytellers, the ones who generally make movies rather than commercials for a living. After asking the heads of these companies if they would put their profit into play—under the auspices that they would make more than they normally would if they maintained interest in the commercial—they all answered identically.
“Yes.”
What’s more, after discussing the idea further, most also offered to put the director’s day rate into play. Which meant that, on average, without sacrificing the quality of the production, the upfront costs were reduced by twenty to twenty-five percent.
Their only caveat? The advertiser had to relinquish creative control back to the agency.
In other words, if the advertiser wants some accountability over the costs of production, the advertiser needs to loosen the reins on trying to control the creative.
So, I asked the Brand Manager about it. “Would you be willing to give up creative control?” I asked.
“If I approve the strategy and the script, and the agency knows their job is to bring back that script in the most involving way possible, then yes,” he said. “I’d be foolish not to, wouldn’t I? After all, under this model, both the agency and I are working towards the same objective, getting the commercial watched.”
The agency producer was at a bit of a loss for words. “You mean, they can measure how long people actually watch commercials?” she asked.
“Not only that,” said the Brand Manager, but I’m going to start paying based on that measurement.”
The producer looked at me and I had to smile. For I saw in her eyes that she just finally grasped what this meant.
Advertising, which is now designed to fill a length of time – 30-seconds – will soon need to be designed to fill a viewer’s imagination. When it does, then those who created the commercial will be rewarded well.
When it doesn’t, the opposite will be true.
For the Brand Manager, it meant that he finally gets to pay for actual value received.
And, since I figured that he received more than his share of value at this dinner, I felt justified in handing him the check.
Thursday, June 05, 2008
How To Pay For "Search Branding".
If you haven't yet read the article by Gord Hotchkiss called "Branding, The Mind and Search," do so now. Mr. Hotchkiss explains how a searching mindset is a more engaged mind, and therefore, a very different mindset than that we have when watching TV.
Here's a particularly interesting quote from the article: "Once consumers have knocked on your door through search, you have a tremendous opportunity to engage them. They have expressed interest, they are actively and fully engaged, they're looking for information and they are ready to be persuaded."
If you're an advertiser, that's right where you want your audience to be, isn't it?
Now, let's say that instead of being taken to a website when the searcher clicked on the search ad, they were taken to a branding video (i.e. commercial).
Go back and read the quote again. Because the fact is, whether going to a website or a branding video, the mindset of the "searcher" is the same. They're knocking on the advertiser's door.
Let's say that the brand video was sixty seconds in length. And let's say after two weeks, the duration data showed that of those who clicked on the search ad, the average time spent with the brand video was 20 seconds.
In other words, the advertiser paid their creative shop for 60 seconds worth of engagement and they ended up only getting one third of that. And this from those that were, according to Mr. Hotchkiss, "actively engaged," when they initially encountered the brand video.
So, here's the question. Should the advertiser be required to pay their creative shop full-fare for the 2/3rds of the brand video that obviously didn't work?
Google allows advertisers to pay only when someone clicks on the search ad. That seems fair, doesn't it? Why should an advertiser pay for ad if it doesn't work?
Shouldn't then advertisers also be allowed to apply the same principle to the creative content itself? In other words, pay their creative shops based on time-spent with the message. The more time-spent, the more the agency would make. The less time-spent, the less the agency would make.
Is it possible?
The duration data, as we all now know, is available from a multitude of sources. And there is a model called DAOS which does monetize time-spent, so that advertisers can start rewarding their creative agencies based on outcome rather than effort.
So the answer is yes.
It's interesting to listen to advertisers proclaim that new models need to be invented before they can change their ways.
Perhaps it's not so much invention, as implementation, that advertisers should be focusing on.
Here's a particularly interesting quote from the article: "Once consumers have knocked on your door through search, you have a tremendous opportunity to engage them. They have expressed interest, they are actively and fully engaged, they're looking for information and they are ready to be persuaded."
If you're an advertiser, that's right where you want your audience to be, isn't it?
Now, let's say that instead of being taken to a website when the searcher clicked on the search ad, they were taken to a branding video (i.e. commercial).
Go back and read the quote again. Because the fact is, whether going to a website or a branding video, the mindset of the "searcher" is the same. They're knocking on the advertiser's door.
Let's say that the brand video was sixty seconds in length. And let's say after two weeks, the duration data showed that of those who clicked on the search ad, the average time spent with the brand video was 20 seconds.
In other words, the advertiser paid their creative shop for 60 seconds worth of engagement and they ended up only getting one third of that. And this from those that were, according to Mr. Hotchkiss, "actively engaged," when they initially encountered the brand video.
So, here's the question. Should the advertiser be required to pay their creative shop full-fare for the 2/3rds of the brand video that obviously didn't work?
Google allows advertisers to pay only when someone clicks on the search ad. That seems fair, doesn't it? Why should an advertiser pay for ad if it doesn't work?
Shouldn't then advertisers also be allowed to apply the same principle to the creative content itself? In other words, pay their creative shops based on time-spent with the message. The more time-spent, the more the agency would make. The less time-spent, the less the agency would make.
Is it possible?
The duration data, as we all now know, is available from a multitude of sources. And there is a model called DAOS which does monetize time-spent, so that advertisers can start rewarding their creative agencies based on outcome rather than effort.
So the answer is yes.
It's interesting to listen to advertisers proclaim that new models need to be invented before they can change their ways.
Perhaps it's not so much invention, as implementation, that advertisers should be focusing on.
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