As the automobile became the primary transportation method for the nation, the buggy whip inventors created their best offerings. Too little, too late- and other than for collectors of buggy whips- totally valueless.
That’s our analogy for commercial ratings.
Nielsen has been ruling the roost with abstract data for decades- taking a percentage of the total viewers and making an educated, statistically based guess on how many viewers are watching a program. While this worked well with only 3 networks, in the days of cable tv, satellite tv, vcr’s and dvr’s it became less relevant- but the system was so well dug in, and the alternatives so few- that the advertising industry stuck with it.
With broadband sneaking into more homes, with DVR’s doing the same thing- and with Internet use skyrocketing- and the advent of Internet Protocol TV (IPTV) with products like AppleTV, we are seeing the last days for Nielsen- and no real use for rating TV spots.
Here is why: Advertising is expensive- and therefore, advertisers aren’t interested in reaching people via “broadcasting” anymore. Broadcast reaches “broad audiences” including those who aren’t eligible to buy your product. The web, IPTV, and hard-drive enabled TV systems (cable and satellite) are able to deliver content that is targeted and able to generate hard data back. The ultimate one-to-one marketing, where if an ad dollar is wasted- it will only be wasted one time. This is the future, and with the ad industry being a multi-billion dollar business, it won’t be long before marketers demand accountability more exact than if someone saw the commercial- as offered by Nielsen- or even if they liked the commercial- they want to know if you are a real business prospect- and what it would take to make you one.
Nielsen to Offer Commercial Ratings
NEW YORK Nielsen will begin supplying national commercial ratings starting in the fall, the company confirmed today.
If the networks and advertisers can agree on a standard, the commercial ratings could be used as currency to buy and sell ads by as early as the start of the 2007-08 TV season.
But for now, program ratings will continue to be the currency for ad transactions.
A Nielsen representative said it received requests from all five major broadcast networks (ABC, CBS, CW, NBC and Fox) for commercial ratings based on live viewership plus seven days of recorded DVR playback viewing. Nielsen will begin delivering that data “sometime this fall,” the rep said. That will give the industry about a year to analyze the data before deciding whether or not to use it as currency in the following season.
The commercial ratings will provide the average audience for all paid national ads airing during each program transmitted by national broadcast and cable networks, the Nielsen rep said.
While the trade press, the buyers, and the networks talk about this “next big thing” they are just fiddling while Rome burns. The entire system of delivering advertising messages will be more like YouTube and GoogleVideo- with meta-tags driving ad choices with a rebate per-click to the viewer (that’s right- you will get paid for watching and interacting with advertising in the future) or similar to Amazon‘s suggestions with a profile built from information you have volunteered.
Soon content producers will take their programming direct, via online hubs like the iTunes store or Amazon- getting paid directly from the consumer for their content. Discounting your media bill will be accomplished by your willingness to watch targeted TV spots- that help build your profile.
If you accept more commercials than your media bill- the proceeds go to the media producers- not to the intermediaries. This levels the playing field- and allows capitalism to do its thing- the way it was meant to.
There are two articles in Ad Age- talking about “engagement” and how “YouTube isn’t getting it done” which are still based on the idea that TV is driven through the old school “Network as middle-man” model. Once you realize that the new middle man will be the one who delivers 2-way feedback and links to your product- you realize how stupid this whole commercial rating discussion is.
If Proctor and Gamble took their “Soap Operas” offline- and onto their site- and charged $1 per show for an enhanced program- with 2 way connections with the characters- and then offered the content for free- if you answered some questions about Pringles, Tide or Gillette- don’t you think they would find that infinitely more useful than a rating of the viewership during their commercial?
Commercial ratings- the best buggy whip for last centuries marketers. Get used to it.
If you have questions about how to navigate this new media landscape feel free to contact us. Surf at the next wave dot biz.
Note: in today’s Ad Age, an article called “Revenge of the nerds” talks about this very subject- it seems Backchannel media has the right idea- except the part about the delivery system still including the networks.
Mr. Kokernak’s vision is to implement long-sought dreams of fully interactive, individually addressable and accountable TV. Backchannel wants to become the software and technology backbone of a new era dawning in TV as it transitions from analog to digital broadcasting — one Mr. Kokernak likens to the broadband tipping point that ushered in the age of YouTube.
In this era, ads are served to people according to the blocks or households where they live. They respond to TV ads with a simple remote click on an icon to, say, get more information about a car they just saw advertised, buy a song they just heard on the Grammys or the book Oprah just touted, or reserve a table at a nearby restaurant. In this era, based on real-time analysis of who’s clicking on what offers and programs, media plans change continuously.
TV, like the internet, but better?
In Backchannel’s vision, TV is a direct medium a la the internet, only, as Mr. Kokernak sees it, much better — without click fraud, phishing scams and other security threats. It’s enough, he believes, to shift much of the money that’s been going into search and other direct media back into TV, replace eyeball counts with the harder currency of response, and ultimately eliminate most upfront deals as dollars gravitate daily in a continuous-improvement cycle toward programming proven to generate response.
Sounds like a pay for performance plan doesn’t it?
Everyone knows the 80/20 rule, in fact an extension of this idea has become known as “the Long Tail.” However, the 80/40 rule might become the most important rule to marketers in the age of search engines and advertising effectiveness.
First- a reminder of what the 80/20 rule is:
Pareto’s Principle - The 80-20 Rule
n 1906, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country, observing that twenty percent of the people owned eighty percent of the wealth. In the late 1940s, Dr. Joseph M. Juran inaccurately attributed the 80/20 Rule to Pareto, calling it Pareto’s Principle. While it may be misnamed, Pareto’s Principle or Pareto’s Law as it is sometimes called, can be a very effective tool to help you manage effectively. Where It Came From
After Pareto made his observation and created his formula, many others observed similar phenomena in their own areas of expertise. Quality Management pioneer, Dr. Joseph Juran, working in the US in the 1930s and 40s recognized a universal principle he called the “vital few and trivial many” and reduced it to writing.
In an early work, a lack of precision on Juran’s part made it appear that he was applying Pareto’s observations about economics to a broader body of work. The name Pareto’s Principle stuck, probably because it sounded better than Juran’s Principle.
As a result, Dr. Juran’s observation of the “vital few and trivial many”, the principle that 20 percent of something always are responsible for 80 percent of the results, became known as Pareto’s Principle or the 80/20 Rule.
Traditional media based advertising has a major flaw: all ads are temporary. The ad in todays paper is in tomorrows trash, the spot in the TV show is over and gone (or skipped by Tivo- or ignored the second time it’s viewed) and most importantly- the old John Wanamaker adage about half his ad budget being wasted- only he didn’t know which half- still, even in todays hyper-targeted media, is pretty close to true. I’ve seen many ads for feminine hygiene products- but will never need them.
The difference between spending your budget on old-school media campaigns and putting your best efforts into online strategy- is that only people interested in your product or service will be interacting with your site- and they are there actively looking for information to substantiate their buying decision.
This is where the 80/40™- rule comes into play- insight directly from The Next Wave: 80% of Internet usage begins in search, 40% of people using search- type your URL into a search, instead of a direct access to your site- and get search results- which could include people talking about your business negatively- or trying to steal your eyeballs- even after you have spent millions of dollars promoting your URL.
Once they get to your site- what do they get? If your site is in Flash, often times they get frustrated. Also- remember, since 80% of use begins in search- are they able to access the specific information they seek? Or just get to your site? Many Flash sites do not allow your visitors to link to interior content with an exclusive URL.
One of the new realities in advertising and marketing is that people are depending on the Internet more for researching purchases- even having access when mobile to the web through WAP enabled sites- or soon- to any site with the introduction of the Apple iPhone. Everything is changing rapidly- and if you don’t make your information search friendly- you won’t be relevant in the decision making process.
How do you solve the 80/40 rule™? Building sites to be search friendly is just the start. Also, remember, it’s not about chest-beating ego sites- it’s about delivering information to the consumer that answers their problem (and the consumer can be a B-to-B customer just as easily as a B-to-C consumer). Your site should be searchable as well. Make every piece of relevant data available- in a web friendly form- and don’t remove material- always update it with relevant news (since links shouldn’t be broken by your maintenance).
But most importantly- always be aware- that when someone is looking for you- 40% of the time, they may get search results instead of directly to your site and someone else may have the answer and steal your lunch- and that is a much bigger problem than the old 80/20 rule.
One of the first design and advertising books that really spoke to me was Pentagram’s Living by Design (long out of print). Its basic premise was that design extended to more than graphics, architecture, advertising- but was the entire consumer/brand experience- long before people were talking about experiential marketing.
I was lent the book by a former employer, who had been given it as a gift by one of his professors. After I read it, I tried to talk to him about it, his response: “I don’t read books.” I didn’t stay at that job very long (probably because I did read).
I went to Pentagram’s London office to find a copy, several years later. They were nice enough to give me a copy- that had a section removed- and she copied the missing pages. I later got a complete copy from an art book store in Santa Monica- it’s one of my most prized books.
So, when I stumbled onto Pentagram’s blog- and saw this logo- I was instantly reminded of why I believe design does make a difference.
Take a look at this elegant logo- then read their description:
The identity is a hieroglyph, designed to be universally understood, that utilizes the icons of the OLPC laptop interface, also developed by Pentagram. The website design employs these symbols as the basis for navigation. Each icon leads to a corresponding section of information: the laptop to a section about hardware and software, the arrow to a section about participation, and so on. The site launched in English but is currently being translated into many languages.
For all the companies that don’t think they can afford to do a proper logo on start-up, just remember, you can pay now, or pay later. A well designed brand mark can make the difference between having a corporate identity- and becoming a lifestyle brand, ala Nike, Apple, BMW, Mini etc.
And, by the way, if you aren’t familiar with the One Laptop Per Child initiative, you need to read more about it- it’s truly something that could change the world.
Today, the Greater Dayton Advertising Association (formerly known as the Dayton Ad Club) made an effort to finally bring it’s members into the year 2003. The speaker was Matt Bailey from SiteLogic- a Search Engine Optimization consultancy.
All great stuff- all stuff we’ve been trying to get the ad club to discuss for over 2 years. All the stuff that we’ve been offering in our Websitetology seminars- but, of course, if you aren’t from out of town, you can’t be an expert.
Matt had a hard time coming up with business to business blogs as an example of generating business- yet, had we been the presenter- we would have been able to point to this blog- to show the b-to-b results. I looked at Matt’s blog- and found this bit:
SiteLogic - Marketing Logic » Why are Analytics so Difficult? by Matt Bailey
Building a website requires an understanding of search engines, as search engines are one of the primary methods of acquiring visitors and customers. However, once the search engine’s information requirements are met, the site has to be able to communicate a different message to the human visitor.
We agree- since 80% of Internet use begins in search, search is key. And, once they get to your site- they need to engage. Apparently Matt’s blog isn’t providing him the kind of traffic he needs. We think we know why.
In the Q&A, someone asked if “tags” in a blog are like Meta tags of old- and he answered they weren’t the same- which is true. Metatags were for the machines; blog tags/categories/taxonomy are for the user. He got that straight- but then, he took what I call a Guru Nosedive- he said that he didn’t use them much, they aren’t that important- content is.
WRONG. At least with WordPress, categories are a way to supercharge a search term, by grouping a bunch of posts into a single post. It’s probably one of the most important SEO techniques we teach- but, alas, the Dayton Ad Club people won’t learn that. Their Executive Director still won’t attend our seminar- and is still building sites the old fashioned way.
It was particularly telling of the 2.0 literacy in the room when there was only one other person in the room that knew what the Long Tail was (besides yours truly) and only a handful (including SAA students) had heard of Digg.
If the Greater Dayton Advertising Association and it’s members (and SAA students) hope to survive, they are going to have to do some serious catch-up. Web 2.0 is only the beginning of The Next Wave, and they aren’t there yet.
Advertising is usually delivered in what we call “paid media” - which would include TV, Radio, Print, Direct Mail, Outdoor, Internet etc. It’s usually your company talking about yourself.
There is also what we’ve come to know as “unpaid media” which is usually described as Public Relations- where your press release, guerrilla stunt, amazing feat, etc. is actually newsworthy- and you appear in the media- usually print, radio, TV or Internet. This could be defined as others talking about you.
Then we have the new media form, and by that, I don’t mean web, Internet, etc. and it’s new name “earned media”- this is where something is so interesting that it gets circulated and watched out of fascination. It is the basic building block of a viral campaign. It is becoming the most valued form of advertising- but there is no price tag on it. You can’t just pony up money and get the eyeballs. Earned media is the result of the new currency in advertising (which really has always been the true currency) creativity. Creative solutions, creative executions, interesting, funny, informative and unexpected messages can take your brand message places that conventional (paid and unpaid media) can’t and won’t.
This creates a huge problem in advertising agency compensation - are you as a client, willing to pay for the value of a good idea? Or are you still basing your compensation plan on the size of your media buy or on hours worked? If you want to earn eyeballs instead of pay for them, the first thing you need to eyeball is what you are trying to buy from your ad agency.
And then decide what kind of media is going to get you what you want.
I’m totally convinced that within 5 years, the only people selling targeted ads in video will be Google. The networks (broadcast and cable) will be toast. Content producers will be uploading their content to Google Video- where we will go to download our programs. Some will be free, others will cost, and if you can’t afford to buy the program at full price, you’ll be able to opt in to sell your eyeballs to some marketer who wants to reach you.
So, when Google wants to know it’s future, they call on Seth Godin- and this 48 minute video shows you why Seth Godin is one of the go-to guys for the future of marketing and advertising.
When I have some more time, I’ll pull out the juicy parts- but for now- I’ve pointed you in the right direction.
