Commentary
Digg This: Digg's Newest Innovation Will Save Advertising
- by Joe Marchese , June 9, 2009
Google has made billions for a lot of reasons, but no reason is more important than the fact that Google created a marketplace that rewards good advertising. Sure, good advertising should always be rewarded by selling more product, but when Google's magic system started rewarding marketers by reducing the price per click for "good" ads, it created a virtuous circle: better ads, happier users, efficient pricing for marketers... oh, and of course more money for Goooooooooooogle.
With all Google's success, one would think all interactive advertising systems would begin rewarding marketers for making ad content people like. Yet, surprisingly, there are few such systems. One problem is that for ads where there is no direct-response action required (all "brand" advertising), how can you tell if the community likes it? Enter the Digg community and Digg's recent announcement of "Digg Ads." Digg has built a community on the back of people telling Digg, and each other, what they like. Why not advertisements? And if people like the ad (or at least don't hate it), shouldn't the marketer get a break on media pricing?
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Think of it this way: If an agency creates something so compelling that people would share it with each other on their own, then they could get "free media." Of course this presents a variety of problems. Most important, it turns advertising into a studio model, with lots of flops and a couple of hits in terms of reach. That economic model isn't one most marketers I know would want to apply to their product launches. Also, as mentioned here many times before, consider the dreaded result of a viral video that gets millions of views because it's funny or edgy, but doesn't sell product.
What the advertising world needs is a spectrum somewhere between "Give us whatever message you'd like to shove down people's throats and we'll make sure they see it as long as you pay for the media" and "make a video of a cat playing piano, wearing a hat and singing about your product and you won't even have to pay for media."
Imagine what creating a pricing spectrum based on how much people like particular ad content would do. Quality creative agency work would result in cost savings for marketers on media distribution. The new agency role would involve a far more integrated media planning, buying and creative development. Agencies could allocate the proper mix of resources against asset production vs. media spend (very similar to search engine marketing).
This model would also begin solving the issue of where agencies will generate revenue. Agencies could earn an entirely different fee, based on optimizing the allocation of a client's budget to achieve maximum message reach and impact based on a system that rewards great creative. And by the way, advertising online could start to get better -- and eventually, it might even start to make sense in social media!
Now Digg isn't going to do this by itself, and as Jeremiah Owyang points out, this isn't a necessarily a new tactic, as Facebook and others
have started allowing people to vote on how much they like an advertisement. But it's easy to see how we are at the beginning of a new definition of "good advertising" that is going to be better for
everyone involved.
Should advertisers get a discounted media cost for advertisements people like better? Send me a note @joemarchese (www.twitter.com/joemarchese ) and leave a comment below with your thoughts.
Google doesn't reward good advertising, it penalizes ads its brain dead decision making software doesn't understand by jacking up the click price even if no one else bids on the key word.
Its not the media who need to be rewarding agencies for great creative that works, its the client. As you mentioned, great creative already gets shared through viral expansion and social media such as Digg, Facebook, Twitter, etc. And the client benefits from better ROI, higher brand regard, and more sales. So why wouldn't they reward the agency!
Great creative also serves as a measurement of which media outlets are performing. Even great creative, in the wrong environment, underperforms. So the media that perform the best should be rewarded with more volume, which, in essence should be rewarded with lower pricing.
Nice win/win for everyone!
Great insights as usual Joe, thanks. I can help but think that this all comes into alignment with the recent pressure on agencies from advertisers to switch to a performance based model. This approach is clearly in line with it.
Keep up the good words.
When I saw the Digg announcement last week, I just wondered why it took so long. Though I frame it differently than your perspective of rewarding marketers with cheaper prices, the bottom line is publishers need to take control of the process and add value for the three constituents - marketers, users, and publishers themselves.
My perspective is to give users control over which ads they see, as Digg is planning. It incentivizes better, more innovative marketing, gets consumers to interact more with the advertising, hopefully leading to a mutually beneficial cycle where consumers want to interact with ads because marketers make them just as interesting and relevant as the surrounding content.
In the end, the inventory becomes more valuable. I immediately wrote a blog about this after the announcement.
A new slant on an old idea—Word-of-Mouth advertising. This was always the most powerful form of monetizing "flattery." Extract a referral and we're on to the next one!
Show up, serve your clients, be reliable and not trendy, and you'll be surprised at the loyal following you'll have.
I'm wondering if Digg plans on expanding with this concept beyond their site after they fix all the kinks and bugs they find after their initial launch. While I can picture seeing many different websites having a small "Digg This!" icon next to their ads, I'm not sure how practical it is to have it or how realistic it is to have a website's developer incorporate into their site. It might be more worthwhile for sites that generate a huge amount of traffic, but not for the medium and smaller ones. Also, depending on the type of audience a publisher has, one might not be able to get a satisfactory enough response to determine how much an advertiser is charged.
I agree with Michael in that users should have control of the types of ads they see. However, I also feel that publishers should also have more control on what ads appear. Instead of having users give feedback and force publishers to go through a trial process in order to find out which ones work best, it may be easier for them to have the option to choose which ads they want to place in the very beginning (or have a consultant to recommend which ads would work and then allow publishers to choose).
Ultimately, there is a symbiotic relationship between the publisher and the user-in order for both to get most out of the website, publishers must know their audience well and users must respond to the publishers.
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