Yet again the topic of advertisers dollars and the spend around web (video) content was front and center at the NewTeeVee summit hosted by Om and team in San Francisco yesterday. TechCrunch offered a nice summary of the discussion, including projections and analysis of advertising spend. The data shows that video content on the net garners far lower CPMs than the same or similar content on broadcast TV. Last January, Jeff Zucker's had in effect predicted this when commenting on the writer's guild strike and the wrangling over digital content rights.Zucker said that mass (analog)media companies fear that large dollar ad spends associated with broadcast media drop significantly (to pennies on the dollar) as those viewers and content is ported over to the net. Prophetic to say the least.
In a previous post, I covered the myriad reasons why CPMs are valued so differently between the net and mass media. However, I think one point continues hit home, and I want to re-highlight it-- advertising delivery in digital media is essentially a transposition of existing and outdated forms advertising created for broadcast media. And, mass media models do not work (in any form) on the internet. Stated differently-- consumers of digital media on the internet have powers not available in broadcast media-- a sea of instantaneous choices, interactive computing power, and social connectivity-- and these powers make them far more resistant to advertising consumption common to the (powerless) world of broadcast media.
So how do we deal with this? A simple answer that will be complicated to deliver-- create new forms of advertising and sponsorship that leverage the powers of the digital consumer. Embrace interactivity, connectedness, and specificity as the governance of marketing to the digital consumer. Instead of continuing to re-purpose 30 second pre-roll/post-roll creative from broadcast media, throw it out and start from scratch. Ask the question: how can we engage a consumer in a conversation about our brand in ways that are authentic, meaningful, and useful, given the powers they possess? Do that well, or even close to well, and you will open the doors to the treasury of the digital media consumer. CPMs go up, brands convert customers and build loyalty, and broadcast media will be left with the tailings.