Wednesday, May 27, 2009

How 3rd Party Analytic Companies Can Start To Differentiate Themselves

I’ve recently had meetings with the top five 3rd party analytic companies in the advertising industry.

What became obvious through these meetings is that these companies are in desperate need of differentiating themselves in the marketplace.

Having spent time with each, I realize that each company is more alike than different. In fact, there is one weakness that they all seem to share - thinking that their data is media related only.

The recent news from Coca-Cola that they are going to start paying their agencies on a performance basis has changed the landscape for all those that gather data.

The reason is that advertising consists of two parts and two budgets.

There is the production budget for creating the work.
And, the media budget for distributing it.

Both budgets have their own ROI associated with them.

The immediate ROI on a production budget is time spent with the message. If the advertiser pays to have thirty seconds produced, they damn well want people to spend time with all thirty seconds.

To advertisers, a good Return On Involvement is equal to a good Return on Investment. Which is why the question that advertisers are now asking is how long did I get viewers to spend with my message?

The immediate ROI on a media budget is impressions. How many viewers did the advertiser expose their message to?

Because time spent did not used to be measurable, the industry used to stop asking questions at exposures. Now that time spent is measurable, advertisers are starting to ask about it.

Bascially, they are asking what the hell do they do with that piece of data.

To be able to offer advertisers that answer is where analytic companies can start to differentiate themselves from one another. While at the same time, adding value to their own product offering.

Were the analytic companies that I talked with thinking along these lines?

One, yes.

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