Wednesday, January 07, 2009

The Biggest Change In 2009 Is That Time Spent Can Now Be Measured. And What Can Be Measured Can Be Monetized.

Not so very long ago, in the pre-digital days, we couldn’t accurately measure how long somebody watched a commercial for.

Nielsen was the measurement god and unfortunately, Nielsen wasn’t granular enough to let us know if people were truly watching anything, much less, advertising.

Fact is, those in the ad business made a ton of money on the inefficiencies of Nielsen.

But in today’s digital era, things are quite different. Second-by-second data is not only available for programming and websites, but also for individual commercials. Which means advertisers will know how well, or, how poorly, their commercial worked at involving a viewer who decided to opt-in and watch.

Is this important? Well, yes. Why? I think that the best way to answer that question is with another question.

If an agency creates a one-minute commercial that involves viewers for the full minute, is that commercial more valuable to the advertiser than a one-minute commercial that involves viewers for only ten seconds?

Is the first commercial considered to be a good commercial and the second commercial considered to be a bad commercial?

In the past, we didn’t have second-by-second view duration data. So good commercials were worth no more than bad commercials. But today, with this data in hand, advertisers will know when viewers watched say, only ten percent of their spot. Once knowing this, you can hardly blame an advertiser for not wanting to pay full fare for the other 90%.

Making this even more important is the fact that we now have the ability to extend the brand conversation beyond the boundaries of the thirty-second spot. Once we make the commercials longer, the ability to involve someone becomes even more critical.

To this end, we have developed a compensation model that allows involving work — good work — to be worth more than non-involving work — bad work. We call it the Viewer Time Spent Compensation model, or, VTS for short.

Why VTS is unique is that it allow advertisers to hold their agencies accountable for creating good commercials. That’s because with VTS, the longer viewers watch, the more the agency makes.

And, vice versa.

When we present this model to advertisers, we tell them that VTS means that failure will no longer be lucrative for the agency. As you can well imagine, advertisers tend to like this. Paying for failure seldom sits well with anyone, especially advertisers.

When we present to ad agencies we tell them that VTS allows good work to be worth more than bad work. As you can well imagine, the more creative agencies like this. The not-so-creative agencies, well, they're not too happy to see us.

Because therein, you see, lies the rub. Up until now, good work and bad work has been completely subjective. Which meant that good creative agencies and bad creative agencies were paid about the same.

With VTS, the worth of a spot is determined by an impartial observer.

The viewer.

The data will indicate whether viewers found the work to be worth their time or not. If the spot is worth the viewers' time, then advertisers don’t mind spending the money to pay their agency well. After all, time is finite—24 hours in a day—so the more time spent with one advertiser’s brand, the less time is available to spend with the competitor’s brand.

As people tend not to buy from strangers, it can be argued that time spent with a brand, and/or its messaging, will ultimately lead to sales.

Ask an advertiser if the worth of a spot should affect the cost of the spot and most will tell you yes. Interestingly enough, most of your good creative agencies will say the same thing.

So it seems as if time spent is something of value that both agencies and advertisers already agree on. At least, in theory.

Here's to betting that 2009 is the year that theory becomes practice.

No comments:

Post a Comment