Tuesday, January 13, 2009

Should Advertisers Pay For Content Creation Based On The Amount Of Time That Viewers Spend With The Commercial Asset?

Interesting concept, isn’t it?

Advertisers currently pay for content creation based on the amount of time that their agency spends creating the commercial. In other words, they pay based on agency time sheets, i.e. effort.

What the digital platform now allows is for agencies to pay based on viewer time sheets, i.e. view duration data. Or, to put it simply, outcome.

So, let's rephrase the opening question so it reads something like this. Should advertisers pay for outcome rather than effort?

Makes it a rhetorical question, to say the least.

Paying for outcome rather than effort ultimately leads to a performance-based content creation model. Why some advertisers get hung up on this type of thinking is that they define performance as being one thing and one thing only.


Granted, sales are still the ultimate measure of the performance of an ad campaign. But digital data now allows advertisers to measure and monetize the smaller, individual performances, that are essential to maximize the ultimate result.

A marketing budget is divided into two distinct areas – manufacturing and distribution. By paying for the manufacturing part – creation and production - according to viewer-based time sheets, advertisers will be able to determine what their return is on that part of their budget.

It's a bit like figuring out the ROI on creativity. After all, a produced second that is watched offers a better Return on Investment on production dollars spent than a produced second that isn’t watched.

View duration data is now being offered by a variety of measurement companies, both online and off, including TiVo, Visible Measures and TNS.

It will be difficult for advertisers to have this data in hand, data that could well say that only 10% of their commercial was viewed, and still be comfortable paying their agency full-fare for the other 90% of the commercial.

This type of “return path data” wasn’t available before. Now that it is, advertisers and agencies have two options. Ignore it. Or, learn how to profit from it.

We recommend the latter.

After all, the secret to success in the digital world is learning how to make the inevitable, invaluable.

And if time-spent data is anything, it’s inevitable.

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