Friday, April 09, 2010

What If Advertising Doesn’t Scale?

Recent studies have shown that the engagement rate in a commercial is three to four times higher when a commercial is tailored for a specific audience and/or content versus using re-purposed spots.

Three to four times is substantial.

So why is it that 95% of the commercials that run online are re-purposed, pre-roll spots?

I think Joe Marchese is on to something when he points out that the problem is that creating unique spots for smaller audiences doesn’t scale.

Creating a $500,000 commercial that will be seen by 5 million people makes sense to an advertiser.

A $500,000 commercial that will be seen by 500,000 people doesn’t.

And, therein lies the dilemma. How do we scale production costs when the audience size won’t scale on the digital platform?

Perhaps the answer is that we’re trying to scale the wrong thing.

Instead of scaling audience size, what if we scaled the time the smaller audience spends with the commercial? Time spent on the digital platform is increasing over all. Audience size for individual pieces of content is decreasing.

Trying to scale an increasingly dwindling audience seems foolhardy.

Shouldn’t we be scaling and monetizing what’s increasing rather than what’s decreasing?

Just a thought.

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