Friday, June 19, 2009

To Engage With The Future Requires Us To First Disengage From The Thinking Of The Past

Everyone seems to be claiming that advertising is broken. Especially in the way that we buy and sell it.

With impressions fragmenting, CPM no longer seems to hold the allure it once did. Cost-per-click, cost-per-sale, click-thru-rate, all have their negatives.

Reach and frequency is a legacy of a one-way medium. If, as some will argue, the point of advertising is engagement, then the current forms of payment based on clicks and impressions fall short.

The problem seems to be that we are hoping to operate 21st century marketing platforms under 20th century compensation models. Or, as Marshall McLuhan put it so succinctly, we now find ourselves “marching backwards into the future.”

Dysfunctional?

To be sure. But what is needed to institute change?

The key, at least in my opinion, lies in coming to the realization that it’s not about media or creative anymore.

What it’s about is data.

If so, it should make publishers very happy. After all, the data is theirs to sell.

Instead of contracting with advertisers to deliver audience, measured as impressions, why don’t publishers contract to deliver data? Ten days worth, 20 days worth, 30 days worth, corresponding to how long the creative runs.

Instead of a two-week buy delivering “X” amount of impressions, why not a two-week buy offering “X” amount of data?

Each piece of data, be it impressions, click-through rate, time spent with the commercial, forwarded to a friend, etc. could all be for sale. The more data requested by the advertiser, the more it will cost for that two-week run.

Would advertisers be interested?

You bet.

The reason is that advertisers today are rapidly trying to find ways to shift to performance-based compensation models with their agencies. Performance is what data measures. Performance, not audience, is what publishers should be selling.

Today, publishers give most of this data away for the cost of 2 cents per impression ($20 CPM). In other words, they are giving the valuable stuff away for free, while charging for what most no longer find value in.

Unfortunately, as impressions continue to fragment, they’ll need to raise the cost per impression. Which will only serve to drive advertisers even further away.

Once in this vicious vortex of self-destruction, survival is questionable.

Strategies For Survival In A Time Of Change

Publishers need to transition their strategies to be more compatible with the needs of advertisers in the digital marketplace. Advertisers want to pay based on performance. Every data point offers a measurement of performance.

To an advertiser, what is measurable is pleasurable. The reason? What can be measured can be monetized.

Which means any and all pieces of data can not only be used to help plan the next media buy and creative execution, but also, to help pay for the present media buy and creative execution.

After all, while data makes actions transparent, it also serves to make media and creative agencies accountable.

To be able to offer advertisers accountability, as well as audience, can only make publishers more valuable.

Turning data into dollars is how publishers can best engage with future.

If, of course, they can first disengage from the thinking of the past.

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