Interviews with Digital Media Thought Leaders
Ten Months Ahead of Bloomberg
Podcast Audio | Posted by Phil Leigh on May 31, 2010
Prompted by the recent GoogleTV announcement, last week Bloomberg-BusinessWeek reported that the product concept would revolutionize advertising in two ways. First, it would lead to a new policy whereby sponsors only pay for ads that get watched. Second, it would enable video ads to be better targeted.
However, regular Inside Digital Media subscribers recognize that we’ve been chanting this mantra since last July’s Future Developments in Video Advertising research report. Another example is our Thinking the Unthinkable about Video Ads last September.
Ever since the 1930s when John Wanamaker commented, “Half of my advertising is wasted, I just don’t know which half”, sponsors have longed for better ad accountability. There are three reasons why that wait is now ending for video advertising.
First, Google has conditioned AdWords sponsors to an expectation that they should only pay for ads that actually get used. Nearly all of the company’s $23 billion annual revenues come from AdWords. They are search terms selected by advertisers to be associated with targeted banner ads. However, advertisers only pay for the banners when viewers click on them.
For example, a Louisville State Farm agent might sponsor the phrase “auto insurance, Louisville” as a Google search term. Thus, when a local resident searches Google for “auto insurance, Louisville” that agent’s banner will appear on the screen, so long as the agent out-bid his competitors for the phrase. Should the viewer click on the ad, the agent is required to pay Google. Conversely, if the viewer ignores the ad, or merely looks at it, the agent owes Google nothing. It is a powerful method for the State Farm agent to catch a Louisville car owner who appears to be shopping for auto insurance.
Second, as Internet Video gains momentum there’s no reason for sponsors to conclude that video ads should be treated any differently than banners from pay-only-if-used viewpoint. It will be an epiphany to advertisers and viewers alike. Furthermore, when a Google-like experience gets on the TV screen the revelation will hit us with all the force of Paul’s vision on the road to Damascus.
Third, once ad agencies discover that sponsors will resist paying for ads that don’t get watched, the agencies will have to change in two ways.
One is they will adopt behavioral targeting as a means of putting ads in front of the viewers with the most interest. Much like Amazon.com and iTunes display ads consistent with our prior purchases, cookie-enabled browsers on our televisions will permit video ads to be similarly targeted. A second change will be a quid pro quo requiring sponsors to pay bounties whenever viewers click-through video ads to buy merchandise or complete a similar call-to-action.
Importantly, the changes noted above are most effectively accomplished by shifting all video to the Internet. Attempting to replicate the Net’s proven technical capabilities on the disparate standards of existing CATV and Satellite Networks — as attempted by Project Canoe — are a Fool’s Errand.
For those who would like to learn more about how our research can keep you ahead of industry developments consider our free Webinar on at 2:00pm Eastern Daylight Time on June 10th to discuss our Future of Apple research report. Please e-mail phil@insidedigitalmedia.com if you would like to participate.
Categories: Podcast Audio
Tags: Add new tag, advertising, Bloomberg, BusinessWeek, future-of-advertising, Future-of-Television, Google, GoogleTV, Internet-Advertising, Internet-video, Market Research, Television-Advertising
Permalink | Email This |
Leave a Comment
If you would like to make a comment, please fill out the form below.
