Friday, November 05, 2010

A Mutual Fund Approach To Buying Time Spent With Commercials

There appears to be some consensus forming that more time spent with a brand’s commercial is better than less time spent with the commercial. Advertisers are finding it difficult to argue with the fact that viewing a commercial is a precursor for persuasion taking place.

Length of view can be measured by time spent with the commercial.

Granted, time spent doesn’t guarantee that persuasion will occur. The only guarantee is that if the commercial isn’t viewed, persuasion will not occur.

Today, models exist that allow advertisers to pay their creative agencies based on the amount of time spent they deliver for the client. Yet the question remains, how would one go about buying and selling time spent from publishers?

Time spent can only be measured after the fact. You can buy thirty seconds upfront, but how do you know how much of those thirty seconds the viewer actually spent with the commercial until after the commercial has run?

You don’t.

Which is why I think a mutual fund approach makes the most sense here.

It would work like this. The advertiser buys a fund of seconds at so much a second. Let’s say the cost per second is $30. If the advertiser invests $600,000 into the fund, he would then have 20,000 seconds to invest. By invest, I mean procure the data that indicates whether the commercial was actually watched by viewers or not.

The advertiser could invest thirty seconds here, sixty seconds there, across a whole range of publishers, until all 20,000 seconds are invested.

The cost to the advertiser doesn’t change - $600,000. The cost per second of data would go up or down, depending on the publisher. But that’s for the second-broker to deal with. Obviously, he wants to buy the data for as low a price as possible.

Once the data is in hand, the advertiser can go to the creative agency and show them how much or how little of their commercial was actually being consumed by viewers. This allows advertisers to hold their agencies financially accountable for commercial viewership.

Obviously, on the surface, this appears to be a radical approach. But in actuality, it’s not. It doesn’t replace any revenue streams for publishers. Rather, it adds an additional revenue stream. Publishers continue to get paid for placing the commercial.

But now, they can also get paid for delivering the data on how well the commercial performed.

All the while, not personally being held accountable for that commercial’s performance.

If I were a publisher, I'd see it as a win/win.

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