Friday, July 22, 2011

Targeting Ourselves Into A Corner

According to the so-called experts, advertisers are getting better at distributing their advertising messages.

Now we’ll only be subjected to advertising for products that somehow, someone has predetermined that we will like.

Others, AdKeeper being one of them, allow the viewer to time-shift advertising, watching it when they want. The thinking, which AdKeeper says is backed up by data, is that a viewer will be more engaged in the advertising when they come to it on their terms, rather than the advertiser’s terms.

We couldn't agree more. After all, we've always said that viewers don’t mind investing time in a commercial when they control the amount of time invested.

The problem, as we see it, with giving control to the viewer, as with better targeting, is audience size.

It will get smaller.

For an industry where the economics are built around the idea of scale, lack of such is a problem.

Let’s look at commercial production. The current economics of commercial production can only be justified through large audience size and repeat exposures. Both of which are compromised through better targeting and giving more control to the viewer.

In the mass media, impressions are what currently underwrite the cost of content creation. With the number of impressions decreasing, advertisers are finding it difficult to justify the costs of creating an emotionally impactful commercial.

Ironically, this means that while we can now more narrowly define our target, we won’t be able to afford to create a message in which to talk to them. Unless, we change the way we look at things.

Mass media is defined by size or, well, mass.

Digital media is proving to be less defined by size and more defined by time. Rather than how many, digital media is about how long. On the digital platform, we can stay with something for as long as we’re interested. The viewer controls the time invested.

If so, then the question becomes, how do we use time rather than impressions to underwrite the cost of content creation?

To us, the answer is this. Rather than justifying the cost of a commercial by how many it will be exposed to, we need to start justifiying the cost of a commercial by how long people spend watching it.

To put it simply, advertisers pay more the longer the commercial is viewed.

Instead of paying everything up front, advertisers pay some on the back end, relative to view duration.

This will allow the worth of a commercial (worth being defined as how long viewers find it to be interesting) to affect its cost.

In the mass media, the formula is as follows: share of voice = share of mind = equals share of market.

In the digital space, it’s share of time = share of mind = equals share of market.

In the mass media, we bought share of market. Thirty seconds here, sixty seconds there.

In the digital space, advertisers need to earn share of market. After all, advertisers don't control the length of time someone spends with something. The viewer does.

The more time earned, the more dollars earned in the marketplace.

Is it a direct correlation?

Don't know yet.

But, time will tell.

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