Commentary
Advertising Is Becoming A Consumer Choice
- by Joe Marchese , September 14, 2010
All attention that consumers give to advertising comes at a cost. The easiest measure is how much time a consumer spends with advertising vs. the consumer's actual goal of content consumption. Just to get ahead of it, please don't tell me that some consumers like highly relevant or high quality advertising. Sure, the Old Spice Man is great, but is he so great that you'd like to stop watching the show you were immersed in to see the new advertisement? Don't be ridiculous.
If this was even remotely true, then cable companies could just put advertisements in the on-demand section and people could just go find and consume all those advertisements that they love so much. Or even better, why don't we stop movies at various points for some advertisements -- I mean, of course, only for the really good ones that people are going to like. For that matter, DVD sets of "24" should include all the advertisements that people really liked that ran during the season, maybe with some cool "behind the scenes, making of the commercial" specials.
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The reason movie theaters and DVD sets don't interrupt their audiences with advertising (even the really good stuff they showed during the Super Bowl) is because people would ask for their money back. And there it is: People are willing to pay money for enjoyment of content without advertising.
With the "iTunes-ification" of all content (micropayments for microcontent), people who have more money than time, or at least value their time at a greater rate than advertisers are willing to pay content producers, are increasingly being given the choice to pay for advertising-free content. In effect, consumers are given the option to "outbid" advertisers for their own attention.
While it's true that not everyone will make this choice, those with the most disposable income or the most hectic schedules will increasingly opt out of advertising experiences. And these are two groups advertisers are very interested in. So what advertisers will find is that they are not bidding against other advertisers for marketing reach, they are in fact bidding against the very consumers they are looking to reach.
And with all this new competition for consumer attention, and a significant decrease in the supply of attention to advertising overall, advertising is likely to see sharp increases in the price of quality consumer attention. Sure, advertisers will still be able to buy 50 billion impressions on various faceless Web sites, but the quality of attention received from such methods will simply continue to decrease.
In the end, advertisers will pay more for quality consumer attention, because it is the price consumers will set in the market for their own attention. It will be really interesting to watch what content consumers value enough to pay for, and what content they do not. A good sign that a publisher can be effective for an advertiser is if that publisher produces content consumers would pay for, but instead can offer free with the right advertising support. This could be a test every advertiser should consider -- because soon they may have to.
Feel free to tell me I am wrong on Twitter @joemarchese or in the comments on the Spin board.
Joe, couldn't agree more with you. Interesting to see if the NYTimes fulfills its promise to stop publishing print newspaper and have subscribers purchase online. Now, that's content I would use. Loved the Old Spice dude but would never, never want to see him interrupt my DVD. Plugging upcoming movies is bad enough!
A couple, even a few ads well placed are not a bother. About what you speak is more than a bother. Another phrase that others have contributed to these situations is cannibalizing your audience or cancelling yourself out. Limitations only limited by the increase of profits.
Yup.
Isn't there a place for both options to to exist. Only thing that is certain that is if we are talking about network TV, with DVD penetration, something has to give asap. DVTR penetration si about 90% ,production costs are way too high and if you are watching live TV (only during sports in my case) you get so annoyed by the same damn commercial airing 1000 times it turns you off to the brand.
Hey, you just described our business model. Creating compelling content for brands, broadcasting the content from the brand website, and attracting an audience that WANTS to be there.
Very interesting and all very true. But what if I don't want to have to pay for my own time and attention? Is the only solution to enable me to pay to hide from advertisers? That shrinks the advertising economy.
How about giving consumers an opportunity to monetize their own time and attention? Consumers are very valuable. More valuable than the media they consume. Share the value directly with consumers and they may not make the choice to run and hide.
That's what we're trying to do at Gomper.
Joe,
I wouldn't dare disagree with you. I've spent the last three years designing and developing that exact business model and platform.
There's so much talk of privacy, targeting, behavioral advertising, real-time bidding, DSP's, and more, that the core element has been missed.
I've repeated asked media executives and ad executives the following... What is the pricing mechanism? How do you achieve price discovery? I am always treated to a blank stare and "to be determined".
It's great to read your take on this subject. You're the first person I've come across who makes this very important argument.
Best regards,
Jeff Rosen
Interesting premise but lets talk economic realities of today. Could your favorite magazine sustain itself and would you buy it at $10 an issue or more? Under the current tech capability and control, would you pay ~$200 a month for cable service to maintain the existing channels or loose half and pay ~$100? But that's today.
From an editor's standpoint it is their dream to not beholdent to any advertiser and a pub would get rid of all their salespeople. Clearly the internet space has still not figured out the online sub model as advertising online has this roi expectation because it can be measured and conventional can't be.
However a new day is dawning. I do believe the electronic pad form factor is the game changer to current publishing economic structure to remove the enormous cost of printing, paper and distribution. The problem is that Apple is taking a strong arm approach with top line publishers and trying to change the model from annual subs to single copy sales. DEAD WRONG. This is a short term problem that they will be forced to deal with as new devices emerge for Christmas that are also flash capable. On the issue of cable, it maybe direct distribution to consumers of programming, thus eliminating all this cable overhead.
The premise of the article I inevitably agree with. Content creators could give a rats hinny who pays in support for it- advs or consumers, all money is green. But someone has to pay for it. The question is making the economics work one way or the other.
We all will be able to definitely answer this question in 5 years as Arthur Sulzberger predicts.
'Free' always has a catch. Paying will often prove easier. Nice call.
Interesting. Does the conclusion (people's attention is becoming more expensive) result from an overexposure to info and the attendant paradox of choice? Does it mean the Internet experience is less and less a good one?
Does all this mean that Gutenberg will be making a comeback?
Your article is dead on. One problem these days is that advertisers are trying to fill every void, and then still creating more advertising where there were no voids. The only choices a consumer has are to pay to watch/listen to avoid the ads or totally stop watching/listening to what they want to avoid the ads... or do what many have done for years, simply ignore the ads when they are on. Funny thing, the advertisers still think we pay attention. The only thing we pay attention to is the number of and intteruptive factor of the ads.
So, what we have:
1. Consumers want content (No ads, Please)
2. Online publishers want to make money
3. Advertisers pay publishers to put their ads in front of consumers eyes.
We @Publishedin suggest a new model in which:
1. Consumers get content (No ads)
2. Marketers reward online publishers through Publishedin Reward-Per-Click™ program
3. Online publishers make money
For more info www.publishedin.com