Wednesday, February 09, 2011

Engagement versus Intrusion. The Debate Continues.

Across all online video viewing, only 1.6% of a viewer’s time is spent watching commercials.

With TV, 25% of a viewer’s time is spent watching commercials. (Or, to put it another way, 25% of a viewer’s time is interrupted by commercials.)

ComScore says that we’re under-serving ads online. They claim that the viewer will accept many more commercials than they’re currently getting.

Jason Kilar, CEO of Hulu, disagrees. He says traditional TV has too many ads and that’s why people are watching programming online. Particularly on Hulu.

Kilar has some support for his point of view from comScore of all people. According to comScore, 42% of people say the reason they watch a program online is because there are less commercials versus traditional TV.

Is there a right and a wrong in this discussion?

Omar Tawakol, CEO of BlueKai, believes that there are only two ways to deliver advertising: Loud and interruptive or relevant. And that if we don’t allow behavioral targeting to enable the delivery of relevant ads, then publishers will have no choice but to make ads louder and more interruptive in order to pay their bills.

In other words, online will become more like TV.

What no one seems to be talking about is Door Number 3. Instead of arguing about whether more or less is better, perhaps the answer is to change the way that publishers are paid.

Instead of being paid based on how many are exposed to a commercial, why not pay the publisher for how long viewers are engaged in the commercial. This will help to encourage longer commercials rather than shorter commercials.

Longer commercials mean fewer commercials. So clutter gets is reduced.

Of course, publishers will say that they’re not accountable for engagement. They’ll claim that their job is to bring the horse to water. That they can’t force it to drink.

And, they’re right.

But what they do have is data that tells the advertiser whether the horse drank or not. That data is valuable to the advertiser as it allows them to hold their creative agency accountable for engagement.

How much will advertisers pay publishers for this very same data that today, publishers give away for nothing?

Quite a bit. Why? Because the average :30 commercial costs around $12,000 per second to produce. How much will an advertiser pay to see if every second of that commercial was actually consumed by a viewer?

Would $50 for a second of data be out of line?

At $50 per second of data, advertisers would be paying less than half a cent for each dollar spent on production to make sure that each dollar spent on production was well spent.

Now let’s say advertisers based a portion of their creative agency’s fee on how many seconds of a commercial were watched. All of a sudden, this half a cent for every dollar spent on production seems like a very inexpensive insurance policy, doesn’t it?

Which is why I don’t see the current argument as only having two sides – more ads or behavioral targeting.

Perhaps the best solution is to understand that’s what really important to advertisers isn’t just measuring how many viewers are exposed to a commercial, but also measuring how long viewers are engaged with a commercial.

And then, for publishers to sell that engagement data to advertisers.

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