Thursday, May 07, 2015

Media Transparency Vs. Creative Transparency

With the current brouhaha over undisclosed agency rebates and kickbacks from the media, it’s apparent that greater transparency will be soon called for.

But media is not the only place transparency is needed.

According to the Association of National Advertisers (ANA), overall agency compensation (even outside of media kickbacks) remains a contentious issue.  Only 40% of agency executives believe it is currently fair versus 72% of advertisers.

Procurement is probably not the answer as only 46% of clients and 10% of agencies think of procurement as a fair process.

So what do we do next?

In terms of video creative, there seems to be a transparent solution already in place.  That is, if the advertising community chooses to embrace it.

The reason they may not want to embrace it is because it would hold creative agencies accountable.  And accountability is something that most agencies don’t want to sign up for.

So what is this apparently transparent solution?  Let creative agencies be paid for their video creative based on view duration.

Both agencies and advertisers will probably agree that a thirty-second commercial viewed for the full thirty-seconds will prove to be more valuable than a thirty-second commercial viewed for just five seconds.  (If not, agencies will need to figure out an answer as to why they don't just create five-second commercials.)

If this is indeed true, it raises an interesting question.  

If view duration creates value for the advertiser, then shouldn’t it also create value for the agency that created it?

In other words, the longer the commercial involves the viewer, the more the agency makes.

On the digital platform, view duration is completely transparent—obviously we’re only talking about viewer-initiated commercials here—not forced views.  Digital data tells us when a person has opted-in to watch.   And, when they've opted-out of watching.

 Right now, the industry is based on the following formula:

                        Share of voice = Share of mind = Share of market

It’s all about media dollars—the more spent—the greater the chance of building market share.  Ironically, the more media dollars spent, the greater the kickbacks and rebates.

But let’s say the formula was changed to this:

                        Share of time = Share of mind = Share of market

In other words, the more involving the creative, the greater the chance of building market share. 

While this doesn’t completely eradicate the issue of media dollar kickbacks, it does do the following.

By letting the viewer determine the value of a commercial (by measuring how much time they spend with it), it allows the worth of a spot (in the viewers' eyes) to affect the cost of a spot.

Perhaps I’m wrong, but I don’t remember a media agency ever saying they’d like to allow the worth of an impression to affect the cost of an impression.  

Do you?

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