Agencies couldn¹t be happier. After all, there is nothing more lucrative than the profit margin on a 30-second spot. Of course, this does mean that agencies will have to go back to their clients and explain that all that branded entertainment and product placement stuff that they¹ve been touting, isn¹t--well, oops--quite as effective as previously promised.
But hey, why bring that up now? It¹s time to celebrate. The beloved thirty is back!
Or is it?
What if all this new evidence is based on the wrong assumption? Obviously, if consumers have to continue to pay for DVR technology, the impact could well prove to be small. But will consumers have to continue to pay? Time-shifted technology, be it DVR or VOD, is very close to becoming advertising-supported. Once that happens, the technology will be embedded in cable boxes just as channel-surfing technology is today.
Viewers don¹t have to pay to channel-surf. And viewers won¹t have to pay to time-shift.
Of course, having the technology and actually using it are not one and the same. Granted, some viewers won¹t take to it right away. But most will. According to Yankelovich, 37 percent of Americans are currently giving up sleep because they¹re pressed for time. It¹s probably not too farfetched to imagine that people value sleep more than advertising. If viewers can save twenty minutes per hour of prime-time viewing by skipping the interruptions (oops, sorry, commercials), it¹s a good bet that they will do so when they can.
So, maybe the advertising industry isn¹t quite out of the woods just yet. And as much as most want the facts on DVRs to be negative, wishing doesn¹t make it so. The simple fact is that digital technology is changing the way that advertising works. Advertisers will soon find that they no longer reach viewers. Viewers reach them. And the only way that advertisers will be able to regain control will be by giving the viewer complete control.
Scary thought, that. After all, giving the viewer control means that the industry will need to change the way that it gets paid. "Time bought" will no longer be what matters. "Time spent" on the part of viewers will be what counts.
To be paid for "time spent," the industry will need three new business models--one for agencies, one for programmers, and one for operators. To keep it simple, think of the three new business models as comprising a new operating system for a new platform.
The linear platform already has its own operating system, based on reach, frequency, and cost per thousand. But the nonlinear platform works on relevance, involvement, and cost per person. Creating advertising under linear rules for the nonlinear platform creates digital liabilities.
And what advertisers want most today are digital assets.
So what the industry needs is a Digital Asset Operating System, or DAOS, for short. In a nutshell, DAOS would offer advertisers "a new way of working," just as digital technology offers viewers "a new way of watching."
If, of course, viewers were indeed watching in a new way. Thank goodness the research says they¹re not.
Looks like we can all stop worrying after all.
Or can we?
Gregory Wilson is the founder of Red Ball Tiger, a nonlinear communications group that is introducing the Digital Asset Operating System to the nonlinear platform.