Thursday, March 05, 2009

Using Return Path Data To Underwrite The Cost Of Creating Commercials. Part II

Where we left off last time was with the idea that before we can have a Creative Renaissance, we're going to need a monetization renaissance.

So, how do we create a monetization renaissance?

Under the current agency retainer system, great creative work and average creative work costs the advertiser about the same. That's one of the major negatives of a cost-based compensation model. It allows the advertiser to pay a fixed amount of money whether the content creator adds value/greatness or not.

If advertisers want to inspire greatness, then greatness needs to be rewarded. The problem lies in trying to define greatness in a way that both sides - agency and advertiser - can agree to. It needs to be a win/win. There can't be the feeling that a dollar gained by one side comes at the expense of the other side.

And, it has to be completely objective rather than subjective. In other words, greatness needs to be measurable.

While this may initially sound impossible, a solution might lie in return path data. Return path data is the digital data that comes back when a commercial runs on the digital platform. Part of what this data reveals is how many viewers actually clicked-in to start watching a commercial. And, how long they watched the commercial for.

Arguably, this return path data is predictive in nature. The longer a viewer chooses to be involved in a commercial, the greater the chance is that they'll be interested in the product being advertised.

Does this mean that time-spent with a commercial will automatically lead to sales? Can't guarantee that. All we can guarantee is that lack of time spent with a commercial won't lead to sales.

Ultimate Objective versus Immediate Objective

Keep in mind that sales are the ultimate objective of any marketing campaign. That said, every commercial that is produced also has a more immediate objective.

To be watched.

After all, the advertiser spent "x" amount of dollars to produce a commercial that is "x" amount of seconds long. A produced second that is watched returns a better ROI on production dollars spent than a produced second that isn't watched.

By using return path data, advertisers will know how many produced seconds were actually consumed by the viewer. Obviously, in this time-starved era we live in, greater creativity is needed from the agency for seconds to be consumed.

Can both advertisers and agencies agree that a consumed second offers more value than a non-consumed second? You would think so, wouldn't you?

If that's the case, then by monetizing this second-by-second data in such a way that the longer viewers are involved, the more the agency makes, we have created a win/win situation.

Advertisers can pay for content creation based on the amount of time that viewers spend watching the commercial rather than the amount of time the agency spent working on it. To an advertiser, it's the difference between paying for outcome versus paying for effort.

To an agency, it's finally a way for good work to be worth more than average work. This is something that good creative agencies have been requesting for some time.

In these recessionary times, it's the difference between advertisers cutting creative budgets to be more efficient and paying for creative based on effectiveness.

I have yet to meet an advertiser who minds paying well for success. What advertisers do mind paying well for is failure.

Paying based on time-spent can only help to inspire the Creative Renaissance that is now being called for. After all, working under this model allows great work to be rewarded. Not just with awards and commendation.

But, with dollars.

Which, these days, is about as inspirational as it gets.


  1. Keith Simrell2:13 PM

    what in your view is keeping the IT infrastructure from becoming all that it can be, and deliver this type of feedback to the networks and companies advertising?

  2. Good question, Keith. The way it works now is that media agencies get the view duration data from the publishers. Not surprisingly, the media agenices are loathe to release this data to their clients. Why? It's not in their best interest for their clients to know that very few people are watching their commercials through to completion. Once clients know that, they stop spending as much on media.

    What media agencies and the industry needs to realize is that while media agencies can get the horse to water, they can't make it drink. View duration is the responsiiblilty of the creative agency.

    Once the media agenices know that they're not accountable for engagement, they will be less hesitant about releasing the data.

    Even better, smart publishers will start to realize that the data they possess isn't just for planning and placing media. It's also valuable for measuring creative performance. Which will certainly increase the number of potential buyers of their data.

    By giving this data away for the price of buying media, publishers are giving up a valuable revenue stream.