August 8th, 2007
It’s Easier For Advertising To Create Value With Information Than With Entertainment
Nielsen asked 1,000 consumers on its new “engagement” panel if they could recall any TV commercials they had seen — only one third of them could. In contrast, 79% could recall at least one TV show. This is not the least bit surprising because traditional TV advertising creates NO value for consumers in the moment — or very little.
Contrast your average interruptive TV ad with the other end of the advertising value spectrum, which is currently occupied by search advertising. Search advertising brings you relevant information about a company’s products or services, in the moment when you’re thinking about it, and typically takes you directly to the company’s website where you can actively “engage” (depending on the quality of the site).
The push for “branded entertainment” as a form of online advertising is still closely aligned with the traditional TV commercial ethos — it’s also aligned, on the positive side, with the YouTube Web-as-micro-entertainment ethos. But as anyone who has ever tried viral video knows, creating value for consumers around entertainment — to actual ENTERTAIN — is very hard to do well.
In contrast, creating value for consumers by providing useful, relevant information is MUCH easier. That’s why there are tens of thousands of advertisers that have done so successfully with search advertising — and so few that have succeeded at creating truly entertaining content.
Certainly there is an emotional component to branding — a world of pure utility information-based advertising wouldn’t be a panacea either.
But it’s embarrassingly clear how bankrupt of value most traditional TV advertising is — and how wasted the majority of those billions of mass advertising dollars are.
How long before big TV ad spender wake up to the imperative of creating REAL value for consumers? How long before the shareholders of big public company advertisers spending millions on valueless advertising start holding their feet to the fire?
Until advertising agencies realign themselves to themselves with digital advertising platforms that create more value for consumers, it may still be awhile.
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(I’m up in Seattle visiting friends and attending the grand opening of one of their stores) I’ve been just overwhelmed. You know what they say about excuses, of course.. So, other stuff that I’ve been thinking about, the advertising edition: Creating value with advertising Targeting, personalization and your personal involvement Becom ing an evangelist Pontifications on Yahoo!, the ad market and how we should go make life even more confusing.. Part 3 will be dealing with networks (social and otherwise..).
went from $36B to $7B in valuation. With a title like “Naked Strategy”, Google should send lots of interesting search traffic their way. Forbes has an interesting article on spectacular acts of central banking. Scott Karp notes that advertisers can create more value with information than with entertainment. This week’s Businessweek cover story is about the future of work. A new web show tells you everything you need to know to start blogging. The New York Times has a good article on why
they had seen. There are a million places to go with this kind of data. I might say people can’t remember their own phone numbers either. In fact, 21% of the people polled in this survey could not recall any TV programs they’d watched. Scott Karp of Publishing 2.0 considered the same data but took another angle. He says: This is not the least bit surprising because traditional TV advertising creates NO value for consumers in the moment — or very little. Contrast your average interruptive TV ad with the other
Scott Karp
Scott, I understand where you are coming from, but feel like you might be comparing apples to oranges. Or, to pick a much closer analogy, you might be comparing TV advertising to the Yellow Pages — Google is, in fact, mostly the Yellow Pages of the Internet. Many advertisers need to reach customers even when they are not searching, especially when online searching is not part of the buying process. Under digital, there will be more highly segmented audiences receiving ad exposures than ever before, and unprecedented opportunities for advertisers to target only the best prospects. But, there will always be a lot of wasted impressions. (Steve Boriss, TheFutureOfNews.com)
If large brand advertisers decide to pull the plug on TV (maybe at next year’s Upfront), the house of cards that’s now holding up the networks, agencies, local affiliates, talent, etc. will come tumbling down. However the cards will also come down hard on the marketing bosses at CPG, finance and auto companies. If they don’t have $70B to spend on TV where are they going to put it?
It’ll be interesting to see how these new tough-as-nails private equity owners handle advertising budgets. I’m looking at you Chrysler.
I don’t disagree with you at all and it’s a point well made. Today’s advertising is still missing some of the key ingredients to how to actually get someone’s attention and generate some brand recall. Advertisers are still not taking full advantage of reaching out to consumers even with all the mediums available to them these days.
There’s been a lot of talk recently about how viral videos are being used to generate awareness of products and services on sites like YouTube etc and with good reason.
We spent roughly around $8k on having videos produced professionally for our site and they’re still producing results. My take on advertising, (especially online) is to provide value in the actual advertising where the brand is right front and center the whole time, but integrated into a story line with actual content. People are willing to watch advertising if there’s something in it for them.
Our videos have been watched over 1 million times now on the various video sharing sites, getting passed around from person to person and still being watched 10,000 times per day — all on an initial investment of $8000.
If you simply make an ad for the sake of advertising you’ll never see the maximum benefit of getting your message out, you need to wrap a value-added experience to effectively get consumers to interact with your brand.
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