Do not Interrupt me, I am in Control
Five years ago, after successfully exiting my last company, I was remodeling my home and I saw the most beautiful pendant lights on the show ‘House of Cards’ in Frank and Claire’s kitchen. They were the right color, size and style, but the problem was that while I could see them, I could not shop for them, I could not perform any research on them, and I could not share them with my wife to get her blessing.
I remember thinking at the time that video advertising is truly broken. Why am I bombarded with ads for things I’m not interested in, and why can’t I shop what I see?
That day, I decided to start revealit, a company dedicated to allowing viewers to shop what they see in video and putting the viewer at the center of the experience.
Viewers are doing everything they can to avoid ads
Raise your hand if you love commercials? This is something that I ask at the beginning of every revealit presentation, and not surprisingly, not one person has ever put their hand up. There has been a war raging between viewers and content creators, the latter of which rely on ads to support their business. Despite a lot of pretense, the good news is you dear viewer you have already won that war.
Here is the score sheet:
- 50% of 12–34 year old’s have abandoned TV
- $40B of ads are blocked every year
- 90% of people skip digital ads
- Netflix ad free streaming services have 150M subscribers, and climbing
“Lies, damn lies, and statistics!” I hear you say. Ok then, let’s hear what Marc Pritchard, Chief Brand Officer of the world’s largest advertiser and brand, Proctor and Gamble, has to say:
“Consumers are doing everything they can to avoid ads. We’re getting ads from less push to more pull”Marc Pritchard, Proctor and Gamble
The viewer message is loud and clear: do not interrupt me, I am in Control about what I am interested in, not you!
Video advertising’s ‘Back to the Future’ format issues
Despite the newly enlightened, like Marc Pritchard, part of the problem with video is that we’re still marketing based on concepts and constraints from a nearly 200-year-old advertising format.
The very first banner ad was published in the Parisian newspaper LA Presse back in 1836. This new paid advertising model allowed the paper to lower its pricing, which in turn helped the paper increase its readership and profitability. This ad supported business model soon became the standard around the world.
A few years later (around 1840), Volney B. Palmer acquired large amounts of advertisement space within a number of newspapers at discounted rates, and then re-sold that space to advertisers, helping establish the patterns for modern day advertising agencies. While the Agency model has expanded to include a full range of creative services, the standards for ad sizes have remained fairly consistent — even into the digital era.
For television and video, advertising has taken a similar course, with very little change. Back in 2016, Fortune highlighted a story about the first television commercial, which took place on July 1, 1941 during a Brooklyn Dodgers-Philadelphia Phillies baseball game on WNBT in New York. (“The First ‘Legal’ TV Commercial Aired 75 Years Ago Today”).
“The black-and-white ad shows an image of the United States and a Bulova watch. It runs just nine seconds and includes a simple voiceover: “America runs on Bulova time.” According to an AdAge report from 1995, Bulova is reported to have paid $9 for the spot, including $4 for airtime and $5 for station charges.”
With all of our technological advances and new digital platforms, amazingly, the formats for video advertisements have changed very little.
So the question remains: If digital dislocation in music brought us Apple’s instant gratification, the iPod, and the death of over-priced albums, what has digital video done for us lately? More importantly how is it that a banner ad format that was designed for newspapers in 1836, and a television commercial created for broadcast linear tv in 1940, have survived on the new digital platforms?
Content is king, innovation scarcity, and the advertising duopoly
A large part of the answer to the question of why we have 200-year-old ad formats in new digital video platforms has to do with Google’s and Facebook’s overwhelming dominance of the burgeoning $34B digital video advertising market. Who needs innovation when you are running a massive duopoly, where brands and agencies are reduced to the role of price and product takers?
When two private companies like Google and Facebook control the world’s eyeballs, data, and a $300B dollar ad spend, there is bound to be disruption that the world will have to grapple with, such as Cambridge Analytica, congressional hearings, anti-trust cases, privacy breaches, Brexit, Russia, #FakeNews, data theft, military hacking, conservative bias, liberal bias, de-platforming, and, despite being fined billions of dollars, this list goes on and on.
Unfortunately, disruptive innovation is not one of the byproducts.
It’s not just the duopolists that are scarce on innovation, either. Hollywood is so in love with Netflix’s success and their “Content is King” mantra that they are planning to spend $30B in new content in 2019 alone in an attempt to win the streaming-video-on-demand (SVOD) wars. With a one-punch playbook like that, and the inability to inject any meaningful technical innovation or understand where they went wrong with viewers, it’s a safe bet that some executive producers, in the very near future, are going to be crying while sipping their morning triple venti half-sweet non-fat caramel macchiatos.
As was the case with the newspaper and the music businesses before them, the move by viewers to consume video on the internet — combined with the ceaseless ambitions of big tech — is going to deliver a severe case of digital revenue dislocation and deflation with broadcasters, content creators, celebrities, brands, and agencies.
Meanwhile, Millennials , with their high disposable incomes, are flocking to self-directed and inherently social two-way digital channels that they have grown up with. They are doing anything they can to avoid ads. Again, the message is pretty clear: do not interrupt me, I am in Control. But is anyone really listening?
A viewer-centric approach
As video traffic has risen rapidly to more than 80% of internet consumption, becoming the fastest growing digital advertising category in the world, it’s inheriting the same intractable problems of the text-based digital advertising market. It is generating the same unpredictable returns, reach, and conversion metrics and, as with text, over 40% of advertising budgets are knowingly allocated to fraud. On top of that, video brings with it an entirely new batch of issues, such as pirated content, questionable attribution, and low fill rates.
Brands need effective advertising inventory designed to take advantage of video, and transparent data insights to measure effectiveness, while viewers demand a contemporary video experience that does not interrupt them and puts them in control.
According to Business Insider (Davos 2019), consumers are “cord-cutting and watching less TV than ever before” as they escape branded messaging, forcing major brands to change their marketing strategies. A few forward-thinking brands, like Proctor & Gamble, are recognizing the decline of traditional advertising and are rethinking how they approach consumers through video.
From the Business Insider report:
“With the rise of over-the-top streaming, P&G has started to create and commission content specifically for the medium.
It’s also started to unabashedly take strong points of view in its ads, embracing technology and sustainability like never before, because consumers are asking that of brands today.
The consumer-packaged-goods giant knows that traditional marketing is being disrupted and that consumer expectations have evolved, and it’s trying to reinvent how it reaches its consumers, P&G chief brand officer Marc Pritchard told Business Insider in an interview at the World Economic Forum in Davos, Switzerland, last week.
“Traditional TV continues to decline; digital is being increasingly blocked,” he said. “What we’re doing is reinventing our media, using privacy-compliant, anonymous consumer IDs to be able to reach people more directly. So we give them ads when they want them, how they want them.”
The growth of over-the-top streaming has meant that P&G has started to create and commission content specifically for the medium, Pritchard said. Such content is geared at expressing a certain P&G brand’s point-of-view and sponsoring a program in such a way that it appears not to be an ad at all.
“The younger generation in particular is really looking at ads in a different way,” Pritchard said. “Not as we know them and have known them; they’re looking at ads with a point of view: what does this brand stand for, who are the people behind it?”
“They create this content, people see it, they search, and then they buy,” Pritchard said. “These ads actually turn into purchase intent, which is then sustainable.”
Ultimately, the company is increasingly embracing technology and embedding it into its products in a bid to compete with direct-to-consumer upstarts. With this approach, the technology often replaces the ad or becomes the ad itself, he said.”
The revealit way
With 40% of the $30B video ad spend allocated to fraud, at revealit we calculate the potential value of the shoppable video market today as approximately $12B dollars. We believe a shoppable video solution that combines great content, contemporary technology and that is viewer-centric can unlock that wasted value and address the lessons we have failed to learn from the decline of Broadcast TV.
We also strongly believe viewer centricity is the primary critical issue and “getting advertising from less push to more pull” is just a good start. Building the revealit shoppable video platform over the last two years we did so with the following researched convictions about what it means to be viewer centric:
- Viewers must never be interrupted
- Viewers always get to shop what they see in-frame.
- Viewers expect shopping to be entertainment, education and engagement.
- Viewers demand zero friction while shopping
- Viewers should be rewarded for their attention.
It is inevitable all video experiences in the future will be shoppable, interactive and viewer-centric because doing so delivers fully qualified buyers to advertisers.
But it’s more than that.
The process of moving from more pull and less push involves a higher integrity, higher value, and more transparent bargain between viewers and advertisers.
What brand, agency or viewer does not want that?
Postscript
This is the first in a series of planned articles on what I believe is the most exciting markets in the world today: Media, Advertising and Content Creation. I look forward to sharing my ideas and hearing your feedback and showing you more of revealit’s shoppable video platform over the coming months.
You can follow revealit on Twitter at @revealit_io and me @revealitCEO
References
- 50% of 18–24 Year Olds have abandoned TV https://www.marketingcharts.com/television-24817
- 40B of Ads Blocked Adblocking Reference https://pagefair.com/downloads/2016/05/2015_report-the_cost_of_ad_blocking.pdf
- 90% of people skip ads https://www.mediapost.com/publications/article/277564/survey-finds-90-of-people-skip-pre-roll-video-ads.html
- 150M Netflix Subscribers https://www.cnn.com/2019/04/16/media/netflix-earnings-2019-first-quarter/index.html
- Were getting advertising from less push to more pull http://www.adnews.com.au/news/marc-pritchard-on-pandg-s-marketing-reinvention
- $34B digital video advertising category https://www.statista.com/outlook/218/100/video-advertising/worldwide
revealit TV Blog 