Thursday, February 13, 2014

Whose Time Should The Advertiser Be Paying For? The Agency’s? Or, The Viewer’s?

Consider how most advertisers pay their agencies for the creation of a commercial.

Usually it’s based on some variation of how long the agency worked on coming up with, and, producing the idea.

To put it simply, time = money.

I have nothing against time = money.  My question is simply this:  

Whose time should the advertiser be paying for? 

The agency’s? 

Or, the viewer’s?

I believe it should be the latter.  I believe that advertisers should pay their creative agencies based on how long the viewer watches the commercial for, rather than how long the agency spent working on it.

If viewers watch, say, 55 seconds of a 60-second commercial, the agency would make more money than if the viewers watched ten seconds out of sixty.

The longer that a commercial is watched, the better that commercial has a chance of working for the advertiser.  The better that a commercial works for an advertiser, the more the advertiser should be willing to pay the agency that created it.

So what does this mean for advertisers?  Rather than paying for effort, advertisers would be able to pay for outcome.  Granted, the outcome isn’t a sale, at least not directly. 

But the chances of a sale increase the longer that a commercial is watched for.

Is a commercial that’s watched worth more to an advertiser than a commercial that isn’t watched?  If the answer is yes, then isn’t it only fair to allow the worth of a commercial to affect its cost?

If you’re an advertiser, the answer is rather straightforward. 

But, what if you are an agency?

Great creative agencies have always chaffed at the idea of being paid based on how many people worked on the business rather than how good their work actually is.

The problem has always been that ‘good’ was based on sales, an indirect measurement at best.

Today, sales are never solely the result of a single commercial, or, in most cases, a single agency. 

On the other hand, whether a commercial involves a viewer or not is solely the responsibility of the creative itself.

The accountability for the view duration of a commercial runs in a straight line back to the agency that created the commercial.

If agencies truly want to be paid based on ‘how good they are’, being paid based on view duration offers them the opportunity to do just that.

View duration compensation is one tool available now for advertisers as the marketing model changes from impression-based marketing to involvement-based marketing.

Impression-based marketing is about size.  It’s about how many are exposed to a message. 

It’s about efficiency.

Involvement-based marketing is about time.  It’s about how long people are exposed to a message for. 

It’s about effectiveness.

Slowly, change is happening.

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