Wednesday, October 20, 2010

How To Be Paid Based On Viewer Time Sheets Rather Than Agency Time Sheets

First off, what’s a viewer time sheet?

Simply the amount of time that a viewer spends with a commercial. Was it ten seconds out of sixty? Or sixty seconds out of sixty?

Chances are, advertisers would find the latter to be more effective than the former. If for no other reason than it would mean that they would have a received a better ROI (return on involvement) on the production dollars they spent to produce the commercial.

Viewer time spent is now measurable on the digital platform.

Paying based on viewer time sheets means that some of the cost of production, as well as agency fee, is withheld until after it’s determined how much of the commercial was consumed by the viewer. Working this ways allows the initial cost of creation and production to be reduced some 25% to 40%.

This is without any reduction in the quality of the finished commercial. (Which makes it a much more effective form of procurement.)

The more of the commercial that is consumed, the better the commercial works for the advertiser. So, the more they should be willing to pay their agency.

It’s an outcome-based model where the outcome is strictly in the control of the creative agency. Up until now, advertisers have been trying to base outcome on sales, which has way too many variables involved to be able to hold anyone directly accountable.

Viewer time sheets isolate accountability.

Isolating accountability allows advertisers to hold their media agencies accountable for how many viewers are exposed to the message while at the same time, holding their creative agencies accountable for how long viewers are engaged in the message.

Exposed to and engaged in. Both are necessary for success.

Of course, advertisers can continue to pay their agency based on hourly time sheets, or how long the agency worked on creating the commercial.

And, some will.

But if I were a CFO I would certainly start to question why my company was still paying for effort when they could be paying for outcome.

No comments:

Post a Comment