The video below is a Coca-Cola commercial. Feel free to play it if you like. But before you do, let me explain that it's not so much the commercial itself that I'm going to be talking about, as it is the progress bar below the commercial. And why the industry needs a new monetization model that allows the advertiser to stop paying once the progress bar stops moving.
If you start the commercial you'll notice that at the end of the progress bar it indicates that the commercial is one minute and thirty-two seconds long. Some of you will watch all of the commercial once you start playing it. Some of you will stop after only a few seconds. After all, for some of you, it will be of interest. For others, not.
According to YouTube, people have already chosen to start to watch this commercial 1,085,581 times. YouTube doesn't reveal what the average view duration has been.
Does YouTube have this information? Sure they do. Have they monetized this information? Not to my knowledge. Makes you wonder why, doesn't it? After all, most would argue that the longer people watch, the more valuable the commercial is to the advertiser. Which means length of view certainly has value.
What's more, this commercial is 90 seconds long. Which means, somebody must have thought 90 seconds were necessary to achieve whatever the objective was that the commercial was attempting to achieve. Otherwise, they would have made the commercial shorter, wouldn't they?
Common sense alone seems to say that the longer people watch, the better the return for the advertiser is in regards to monies spent on producing the commercial. After all, if I were Coke, I'd hate to pay full fare for all 90 seconds if the data came back saying people, on average, only watched ten of those seconds. You'd think the agency that created the commercial should be accountable for some of that. No doubt they were the ones pushing for 90 seconds.
Which brings us back to the monetization model that is based on the philosophy that when the progress bar stops moving, the advertiser should be able to stop paying. Not for media, mind you. The media that the commercial is running in really has nothing to do with how long people decide to watch. (Obviously, this last statement is only true when the viewer is in control. When the distribution platform disables the viewer's ability to stop a commercial when they want, they also disable this monetization model.)
No, who the advertiser should be able to stop paying when the progress bar stops moving is the agency that created the commercial. Currently, most advertisers pay their agency for the amount of time it takes to create the commercial. Doesn't it make it make more sense to pay for the amount of time viewers spent watching it?
Think of it as paying based on viewer time-sheets versus agency time-sheets.
Possible?
Absolutely. It's called Viewer Time-Spent Compensation (VTS for short). And the reason it's important is this.
As fragmentation continues and control increasingly shifts to the viewer, the number of people that will participate in an advertiser's message will become smaller. After all, as advertising becomes more non-intrusive in its delivery, only the interested will start watching in the first place. And, it's exactly because they are interested that the quality of the message, the production values and the emotional impact cannot afford to be lessened by reducing the amount advertisers are willing to pay for production. But that's exactly what will happen if we keep justifying the cost of production based on audience size.
Which means as targeting methods improve, which is just another way of saying the size of the audience will get smaller, we need to start justifying production costs based on something other than impressions. And, at least to me, effectiveness seems to be a pretty smart way to do that. If people start to watch and stop shortly thereafter, then that's a commercial that advertisers will find difficult to justify as being effective.
For a commercial to have any chance of achieving its objective, it at least needs to be viewed. View-duration data tells us whether it was or not. Viewer Time-Spent Compensation lets advertisers pay based on this effectiveness metric. Or, in other words, paid based on view-duration data. The very same data that YouTube and many other online distributors already have.
If agencies were paid based on how long people actually view their commercials, do you think the quality of the commercials would improve?
If your answer is yes, then you're starting to see how accountability can lead to a new creativity.
And how a creative renaissance is indeed not just a possibility, but a necessity, as we move forward.
Tuesday, November 18, 2008
Thursday, November 13, 2008
How Much Is 141 Days Of Engagement Worth To An Advertiser?
Let’s say that an advertiser purchases $10M worth of media at a $20 CPM. That advertiser will know how many impressions their $10M purchased.
What the advertiser won't know is how much time-spent with the brand that same $10M purchased for them. And, curious enough, most aren't asking for this information.
In the industry today, we know how much 50 million impressions will cost, and therefore, are worth to an advertiser. But how much are 141 days of time-spent with the brand worth to the advertiser? And, is more time-spent with the brand worth more to the advertiser than less time-spent with the brand?
All fair questions in the digital space. And, all questions that can now be answered.
Let’s say that a web publisher has 35 million unique vistors to his site every week. Let’s say that this publisher runs an advertiser's user-initiated, 60-second commercial on his site. By user-initiated, we mean that it’s not pre-roll or in-stream. The user needs to activate the commercial for it to play, and then has complete control over the commercial, i.e. users can stop the commercial and leave when they so desire.
Once viewers click into the commercial, or activate it, the digital data starts accumulating. Not only does the publisher know how many clicked-in to the commercial, the publisher also knows the average view duration of those that did.
Let’s say that the click-through rate on a :60 spot on this publisher’s site was 1%. One percent of 35 million is 350,000. (An insignificant number if one is dealing in impressions.) Let’s also say that of those 350,000 who activated the commercial, the average view duration was 35 seconds out of a possible 60 seconds.
In other words, the advertiser’s return on involvement for this commercial was 58%.
Now if we aggregate the time-spent with the commercial, 350,000 people each spending 35 seconds with the brand, total time-spent comes out to 12,250,000 seconds. Which in turn translates to 3,402 hours. Or, 141 days of brand engagement.
It sounds like a lot, doesn’t it? But, if people watched the full 60 seconds, the advertiser would have had 243 days of engagement. For, the same media costs.
In other words, it wasn’t the media, but the creative itself that cost the advertiser 102 days of engagement. Which means those 102 days are the responsibility of the creative agency that created the work.
Should advertisers hold their agencies accountable for this failure? Would you want to if were an advertiser?
Every impression has an element of time-spent that comes along with it. Acknowledging this, the question then becomes, is a 55-second impression more valuable than a 5-second impression?
The answer is that it depends, doesn’t it?
If the spot was sixty seconds long—which means that the opportunity to engage (OTE) was sixty seconds—then I think that most advertisers would argue that 55 seconds of engagement out of a possible 60 is better than 5 seconds out of a possible 60. With the former, they have 5 seconds of waste. With the latter, 55 seconds of waste.
Which is why we feel that it won’t be long before advertisers start aggregating time-sent with the message along with impressions.
Advertisers know how much an impression is worth. Well, at least they know how much an impression costs. After all, a non-engaged impression is really worth very little, isn’t it? But it still costs as much as an engaged impression, at least in media dollars.
In the Digital Marketplace, engagement is where true value lies. Which is why advertisers should at least know how much engagement they are getting.
And, at what price.
What the advertiser won't know is how much time-spent with the brand that same $10M purchased for them. And, curious enough, most aren't asking for this information.
In the industry today, we know how much 50 million impressions will cost, and therefore, are worth to an advertiser. But how much are 141 days of time-spent with the brand worth to the advertiser? And, is more time-spent with the brand worth more to the advertiser than less time-spent with the brand?
All fair questions in the digital space. And, all questions that can now be answered.
Let’s say that a web publisher has 35 million unique vistors to his site every week. Let’s say that this publisher runs an advertiser's user-initiated, 60-second commercial on his site. By user-initiated, we mean that it’s not pre-roll or in-stream. The user needs to activate the commercial for it to play, and then has complete control over the commercial, i.e. users can stop the commercial and leave when they so desire.
Once viewers click into the commercial, or activate it, the digital data starts accumulating. Not only does the publisher know how many clicked-in to the commercial, the publisher also knows the average view duration of those that did.
Let’s say that the click-through rate on a :60 spot on this publisher’s site was 1%. One percent of 35 million is 350,000. (An insignificant number if one is dealing in impressions.) Let’s also say that of those 350,000 who activated the commercial, the average view duration was 35 seconds out of a possible 60 seconds.
In other words, the advertiser’s return on involvement for this commercial was 58%.
Now if we aggregate the time-spent with the commercial, 350,000 people each spending 35 seconds with the brand, total time-spent comes out to 12,250,000 seconds. Which in turn translates to 3,402 hours. Or, 141 days of brand engagement.
It sounds like a lot, doesn’t it? But, if people watched the full 60 seconds, the advertiser would have had 243 days of engagement. For, the same media costs.
In other words, it wasn’t the media, but the creative itself that cost the advertiser 102 days of engagement. Which means those 102 days are the responsibility of the creative agency that created the work.
Should advertisers hold their agencies accountable for this failure? Would you want to if were an advertiser?
Every impression has an element of time-spent that comes along with it. Acknowledging this, the question then becomes, is a 55-second impression more valuable than a 5-second impression?
The answer is that it depends, doesn’t it?
If the spot was sixty seconds long—which means that the opportunity to engage (OTE) was sixty seconds—then I think that most advertisers would argue that 55 seconds of engagement out of a possible 60 is better than 5 seconds out of a possible 60. With the former, they have 5 seconds of waste. With the latter, 55 seconds of waste.
Which is why we feel that it won’t be long before advertisers start aggregating time-sent with the message along with impressions.
Advertisers know how much an impression is worth. Well, at least they know how much an impression costs. After all, a non-engaged impression is really worth very little, isn’t it? But it still costs as much as an engaged impression, at least in media dollars.
In the Digital Marketplace, engagement is where true value lies. Which is why advertisers should at least know how much engagement they are getting.
And, at what price.
Monday, November 10, 2008
Does Share Of Time Equal Share Of Mind?
Does the amount of time of time that a viewer spends with an advertiser’s messaging have any impact on sales? And, if so, then is it fair to say that share of time equals share of mind?
My argument would be that it does. The more time that advertisers can get consumers to spend with their brand messaging, the less time those consumers have to spend with the competitor's messaging.
My reasoning?
Time is finite. And while media folks like to claim that with multi-tasking, each day is now 36 hours long, regular folks don’t see it that way. No matter how you spin it, a day has only 24 hours. In fact, if you asked most people, they would claim that days are getting shorter, not longer. Twenty-four hours is not nearly enough to get done all that needs to get done.
So by process of subtraction, if someone gives one advertiser 90 seconds, that’s 90 seconds they don’t have to offer to another advertiser. Yes, I know. There is always another day. But, chances are, that day is filled as well. Which is why it seems that an integral part of advertising in the digital marketplace is to capture as much of the users time as possible.
Now, this goes completely against most thinking in regards to digital advertising. "Keep it short," everyone says. Five-second commercials are better than thirty-second commercials. And, they are right about that when the advertising is offered up in an intrusive manner. Shorter is definitely less objectionable when intruding.
But as digital advertising moves away from intrusive formats, will the thinking also move away from shorter being better? Or, will advertisers start asking their agencies to involve, intrigue and persuade people to stay with them as long as possible, not just for thirty seconds, but two minutes, maybe three?
Naysayers will argue that people will never invest time in a commercial. But what we have found is that people don’t mind investing time if they control the time invested. In other words, when viewers are in control—fast-forward, pause, stop, exit— they don’t mind initiating the interaction with a commercial, knowing that they can leave when they want to. This is one of the reasons that search advertising has been as successful as it is. With search, the user is in complete control.
It’s amazing how well advertising works when advertisers put the the viewers' interest first.
The question of whether share of time equals share of mind can also be approached from another perspective. Each product that we purchase comes with a certain amount of time that must pass before purchase takes place. A new car, for instance, takes around four and a half months. A new computer, on the other hand, requires 15 hours from when we first think we need a new one to when we actually plug it in on our desk.
What takes place within those 15 hours? A portion of that time is spent pursuing options, information and, yes, advertising. Which means that the more time that an advertiser can successfully have the purchaser spend with his product’s messaging; the more of those 15 hours are expended.
Linear advertising always sold the lie that share of time equaled share of mind. The more time that was purchased, the greater the share of mind we all believed. We now know that this was worshiping a false god.
But on the digital platform, where the viewer is in control, beliefs are changing. It’s the viewer's time that advertisers need to earn, not the network's time that they need to buy. An easy transition? No. After all, a viewer's time is finite and therefore precious. Waste it at your own peril.
Now imagine if advertisers started to appreciate the performance value of time-spent with their messages and rewarded their agencies accordingly. The more time-spent the agency creates with a brand, the more money they will create for their agency.
Do you think the quality of the work will change for the better? Rhetorical question, I know.
When asked what makes a good advertisement, an advertising guru once replied, “A good advertisement eliminates the need to look elsewhere.”
An ad written under that criteria would certainly deliver time well spent.
My argument would be that it does. The more time that advertisers can get consumers to spend with their brand messaging, the less time those consumers have to spend with the competitor's messaging.
My reasoning?
Time is finite. And while media folks like to claim that with multi-tasking, each day is now 36 hours long, regular folks don’t see it that way. No matter how you spin it, a day has only 24 hours. In fact, if you asked most people, they would claim that days are getting shorter, not longer. Twenty-four hours is not nearly enough to get done all that needs to get done.
So by process of subtraction, if someone gives one advertiser 90 seconds, that’s 90 seconds they don’t have to offer to another advertiser. Yes, I know. There is always another day. But, chances are, that day is filled as well. Which is why it seems that an integral part of advertising in the digital marketplace is to capture as much of the users time as possible.
Now, this goes completely against most thinking in regards to digital advertising. "Keep it short," everyone says. Five-second commercials are better than thirty-second commercials. And, they are right about that when the advertising is offered up in an intrusive manner. Shorter is definitely less objectionable when intruding.
But as digital advertising moves away from intrusive formats, will the thinking also move away from shorter being better? Or, will advertisers start asking their agencies to involve, intrigue and persuade people to stay with them as long as possible, not just for thirty seconds, but two minutes, maybe three?
Naysayers will argue that people will never invest time in a commercial. But what we have found is that people don’t mind investing time if they control the time invested. In other words, when viewers are in control—fast-forward, pause, stop, exit— they don’t mind initiating the interaction with a commercial, knowing that they can leave when they want to. This is one of the reasons that search advertising has been as successful as it is. With search, the user is in complete control.
It’s amazing how well advertising works when advertisers put the the viewers' interest first.
The question of whether share of time equals share of mind can also be approached from another perspective. Each product that we purchase comes with a certain amount of time that must pass before purchase takes place. A new car, for instance, takes around four and a half months. A new computer, on the other hand, requires 15 hours from when we first think we need a new one to when we actually plug it in on our desk.
What takes place within those 15 hours? A portion of that time is spent pursuing options, information and, yes, advertising. Which means that the more time that an advertiser can successfully have the purchaser spend with his product’s messaging; the more of those 15 hours are expended.
Linear advertising always sold the lie that share of time equaled share of mind. The more time that was purchased, the greater the share of mind we all believed. We now know that this was worshiping a false god.
But on the digital platform, where the viewer is in control, beliefs are changing. It’s the viewer's time that advertisers need to earn, not the network's time that they need to buy. An easy transition? No. After all, a viewer's time is finite and therefore precious. Waste it at your own peril.
Now imagine if advertisers started to appreciate the performance value of time-spent with their messages and rewarded their agencies accordingly. The more time-spent the agency creates with a brand, the more money they will create for their agency.
Do you think the quality of the work will change for the better? Rhetorical question, I know.
When asked what makes a good advertisement, an advertising guru once replied, “A good advertisement eliminates the need to look elsewhere.”
An ad written under that criteria would certainly deliver time well spent.
Monday, November 03, 2008
Access Of Evil
An interesting article ran recently in Ad Age regarding the dilemma over intrusive advertising. The big question on everyone’s mind seems to be how many intrusive ads are too many before viewers start revolting?
It’s a bit of rhetorical question really, as everyone already knows what the answer is.
One.
But perhaps of even greater concern is that isn't it the wrong question to ask?
Isn't the question the industry should be asking is how can they make money on non-intrusive advertising? The fact is people don’t dislike advertising. What people dislike is the way that advertising is currently marketed to them. Or, should I say, forced on them.
The traditional business model for television was to deliver viewers to advertisers. This made sense. As the advertiser was in control the networks answered to the advertisers’ bidding. But as control has now shifted to the viewer, so to must the business model.
Which means that the role of television today is to serve its new masters.
Instead of trying to figure out how best to deliver viewers to advertisers, the networks should be trying to figure out how best to deliver advertisers to viewers.
And, to do so on the viewers’ terms.
The TV of tomorrow will need to learn how to morph into a search business model. To put it simply, it needs go through a mindchange that allows it to become a tool of access, rather than of distribution.
Whether TV becomes an access of evil or an access of good depends completely on how much control the advertiser is willing to let the viewer have.
TV in the past was successful because it was able to monetize the wishes of those that were in control. The same formula will work in the future.
If advertisers ever accept that they're no longer the ones calling the shots.
It’s a bit of rhetorical question really, as everyone already knows what the answer is.
One.
But perhaps of even greater concern is that isn't it the wrong question to ask?
Isn't the question the industry should be asking is how can they make money on non-intrusive advertising? The fact is people don’t dislike advertising. What people dislike is the way that advertising is currently marketed to them. Or, should I say, forced on them.
The traditional business model for television was to deliver viewers to advertisers. This made sense. As the advertiser was in control the networks answered to the advertisers’ bidding. But as control has now shifted to the viewer, so to must the business model.
Which means that the role of television today is to serve its new masters.
Instead of trying to figure out how best to deliver viewers to advertisers, the networks should be trying to figure out how best to deliver advertisers to viewers.
And, to do so on the viewers’ terms.
The TV of tomorrow will need to learn how to morph into a search business model. To put it simply, it needs go through a mindchange that allows it to become a tool of access, rather than of distribution.
Whether TV becomes an access of evil or an access of good depends completely on how much control the advertiser is willing to let the viewer have.
TV in the past was successful because it was able to monetize the wishes of those that were in control. The same formula will work in the future.
If advertisers ever accept that they're no longer the ones calling the shots.
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