Commentary

What If They're Wrong?

As everyone knows, people don't like advertising.

So it's not surprising that as television viewers gain control over what they watch and when, they're choosing to opt-out of the commercials. At least, that's the prevailing view of the industry experts.

But what if the experts are wrong?

What if it's not advertising that viewers are opting-out of? What if, instead, viewers are trying to avoid interruptions to their programs? If so, then the ad industry is spending enormous amounts of time, effort, and financial resources attempting to solve the wrong problem.

If viewers are opting out of interruptions, then the industry's focus should be on finding ways to run commercials that do not interrupt the programming, rather than finding ways to circumvent viewer-control.

Will viewers opt in to commercials that don't interrupt their programs? Indications are that they already do. And the best part is, only those that are interested in the product and/or category opt in. In other words, waste is eliminated.

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What's ironic is that if agencies possessed as much confidence in their abilities as they portray in new business pitches, they would not only gladly give the viewer control, they would also solve the two largest concerns facing advertisers today: media inflation and lack of accountability.

How so? As viewers gain control, advertisers gain knowledge as to exactly how many watched and for exactly how long. When advertisers know how many viewers watched a commercial (rather than a program), they will no longer have to pay for those that didn't watch (current CPM model), and media inflation goes away.

If advertisers know how long viewers watch for, i.e. involvement, they can then pay their agency on the basis of that information. The longer the commercial involves the viewer, the more effective it is for the advertiser. And hence, the more the advertiser should be willing to pay the agency. (Obviously, the converse will also need to hold true.)

Agencies could start being paid on the basis of outputs rather than inputs, on results rather than effort. These results-based revenue models would enable advertisers to hold their agencies accountable. No, not for sales. But for what agencies have said they have always wanted to be held accountable for: the creativity of their work.

So why aren't agencies pursuing this? Cynics could argue that it violates what everyone knows, but no one dares to say. It is far more lucrative for agencies to be paid for the possibility of success than it is for the actuality of results.

Which makes one wonder, is it losing viewer control or financial control that concerns agencies most?

It is true that putting viewers in control will undermine the current agency and media compensation models on which a very large and lucrative industry has been built. Change, after all, will need to be structural in nature.

That said, change is also imperative, because the critical thing that advertising is losing is not viewers, it's relevance.

The future of advertising is a future that understands how to monetize digital information in a way that empowers the advertiser while it financially motivates the agency.

Fortunately, the measurement tools already exist, as do the revenue models. What needs to change is the industry's mindset.

After all, if accountability is inevitable, the focus should be on making the inevitable invaluable.

Not invalid.

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