One of my better moves at DrJays was taking our outsourced online advertising campaign in-house and buying ads directly with Google, Overture, and others. The flat per-click rate our partner was charging us far exceeded what we needed to spend on what was then a relatively uncompetitive keyword market for “urban streetwear” brands. I waded into the copy edit and ad management waters and discovered the ease with which one could test, iterate, and ensure profitability. Interestingly, I found Google’s ad placement algorithm functions such that both bidding price and “relevance” of the ad (ie. whether Google searchers clicked on your ad) factor into how prominently one’s ad is placed. In theory, one could bid less than a competitor on a keyword but receive better placement if one’s ad garners more of a response. As such, Google keeps its brand value as relevant search engine while maximizing revenues, and advertisers face fluid placement, constantly moving based on end-user implicit feedback. The Internet’s largest ad engine relies heavily on “commercial ratings.”
Against this backdrop, I’m keenly watching television advertising evolve and anticipate that the adoption of commercial ratings for TV will be seen in hindsight as a punctuative event in the quest for advertising efficacy. In a meandering Advertising Age article published April 8th, Jack Neff highlights this impact, noting the following:
The overlooked advantage of commercial ratings — which are about to emerge in the U.S. next month and could be part of the 2008 upfront — is that they’ll give networks a much stronger incentive to fix their business model so it rewards marketers whose ads people love and penalizes those who produce ads that viewers hate.
Indeed; television will join the world of marketing accountability. Transparency, of course, will yield a slippery slope, and one not easily adapted to the linear format. Who wants to be the advertiser that follows an ad with terrible ratings? Will networks offer rating guarantees or screen ads based on focus groups? Perhaps up-front ad fees will depend on the agency or production firm behind the ad, which offer a pre-air proxy for quality. It’s early days on this front but commercial ratings are important and will surely change things. Stay tuned.
Matt,
Good point about advertisers not wanting to follow bad ads. In the end, all of this will be a win/win. Advertisers will get more transparency and premium venues will be able to prove their value.
How about using the number of youtube views as a proxy for ad quality?
This is an interesting discussion as most of the “bleeding-edge” discussions around advertising seem to be focused on product-placement ads, embedded ads, in-game ads (for video games) since DVR’s have turned a captive audience into an active audience. By rating and building a competitive industry around TV advertising, one can engage an active audience and this advertising content could become part of the entertainment of television itself. This in turn would arguably bring us full circle back to the product-placement advertising discussion where ads and entertainment become seamlessly merged.
Chris, agree re win/win but it’s sure going to ruffle some feathers in the process!
Loren, love your point re youtube views as proxy for quality; it’s real-time feedback which is what advertisers will eventually demand. And, yes, in the midst of advertising “clutter” and DVR, ads have to be content unto themselves.
If I’m understanding things appropriately, we’re going to see ratings re commercial “pods” come out first. In other words, advertisers will know only how popular an entire slot of commercials was, not how their individual commercial fared. Again, it’s early days.
Best,
Matt
Sounds good in theory but they are two different animals. Most people are turned off by television ads, they tune them out, lower the volume, leave the room etc. Internet ads are different people actually look to them for info, if the two ever merged it could mean the death of one of them.
Just a comment; the Jeep ad with the wolf, birds and chipmunk(?) is sooo refreshing. I usually mute all commercials but not this one. “Ain’t it good, ain’t it right…BABY BABY”!!!!