Time-Based Advertising Could Save The Display Ad And Premium Content
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A new advertising format based on time and attention could save media companies and the display advertising unit. We may finally move away from impression-based advertising and to attention/time based ads. The winners will be advertisers and premium publishers. The immediate losers will be advertising agency trading desks, programmatic buyers, RTBs, and long-tail publishers.
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Time-Based Advertising Could Save The Display Ad And Premium Content
- 1. A new digital advertising model might SAVE premium content on the web
- 2. The US advertising market is huge 250.0 200.0 150.0 100.0 50.0 0.0 2012 2013 2014 2015 2016 2017 2018 Billions of Dollars TV Spend Digital Spend Print Spend Other Spend Source: eMarketer
- 3. Advertising on all of those mediums is sold based on impressions or actions Why?
- 4. It’s really easy to measure There are 2 impressions in this view* *AOL sells this rich media ad as one unit and gives the advertiser 100% share of voice at a premium price.
- 5. Since it’s easy to measure, it’s easy to price Total cost x 1000 Number of impressions CPM =
- 6. Ad agencies and media companies are used to pricing this way New York Times Pages 3 – 5, June 11, 1974 8 impressions 1 impression 5 impressions
- 7. But there is a huge PROBLEM with this model on the web… What?
- 8. In 2013, there were 5 TRILLION impressions served! $17.6 billion x 1000 5 trillion impressions $3.52 eCPM = 1 2 1. eMarketer estimate of display ad revenue in the US 2. comScore estimate of US impressions served in 2013
- 9. $3.52 eCPM CANNOT support the traditional media business model
- 10. 3,000 2,500 2,000 1,500 1,000 500 0 Newspaper ad revenue drop-off has been dramatic 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008 New York Times Ad Revenue (Millions of Dollars) Total Newspaper Industry Ad Revenue (Billions of Dollars) Total Newspaper Industry Ad Revenue NYTimes Ad Revenue
- 11. No large paper has been spared 6,000 5,000 4,000 3,000 2,000 1,000 - Ad Revenue (Millions of Dollars) NYT Ad Revenue McClatchy Ad Revenue Graham Holdings Ad Revenue Gannett Ad Revenue
- 12. - 500 1,000 1,500 2,000 2,500 3,000 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Revenue (Millions of Dollars) Ad Revenue Circulation Revenue For the first time since 1953, the New York Times subscription revenue is greater than its advertising revenue
- 13. THE SUPPLY of impressions is unsustainable
- 14. Before the internet impressions were constrained and SCARCE
- 15. CIRCULATION PAPER PRINTING constrained the supply of impressions
- 16. Now, an advertiser can buy any audience CHEAPLY and AUTOMATICALLY via programmatic buying technology
- 17. WE’RE IN TROUBLE IF SOMETHING DOESN’T CHANGE! “our print and digital products face increasing competition for audience and advertising from… digital advertising networks and exchanges, real-time bidding and other programmatic buying channels and other new forms of media.”
- 18. Advertisers are LOSING too Why?
- 19. When was the last time YOU looked at a digital ad?
- 20. The average interaction rate with a display ad is 2.94% 1 5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Interaction Rate Percentage 1. This is the percentage of ads served on the Double Click network that a viewer interacted with
- 21. A lot of money is spent on digital ads that DO NOT work 2012 2013 2014E $45.0 $40.0 $35.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $- Display $14.8 $17.6 $20.6 Search $17.3 $19.6 $21.6 USD (Billions) US Digital Advertising Spend Source: eMarketer
- 22. What’s going to SAVE premium content?
- 23. A NEW ADVERTISING MODEL
- 24. TIME is the only SCARCE asset on the web
- 25. In 2014, Americans had a shorter attention span than GOLDFISH 1 1. Nancy Kane, Harvard Business School
- 26. Technology has improved – we can measure EVERYTHING
- 27. Rising content engagement increases the percentage of ads seen Percent of Ads Seen Engaged Time on Page Source: Chartbeat
- 28. As an audience spend MORE TIME reading content with an ad in view, ad RECALL INCREASES
- 29. The best content DEMANDS our attention, and advertisers will pay for it
- 30. Rather than being forced to play tricks, media companies can focus on grabbing OUR ATTENTION
- 31. User experience benefits Focus on great, attention grabbing content No need for annoying slideshows One ad that scrolls with content 1 2 3 4 Eliminate pagination
- 32. The Media Ratings Council APPROVED and 2 publishers are now selling time-based ads
- 33. Soon, all premium digital ads will be sold based on ATTENTION
- 34. THE WINNERS 1 Premium publishers 2 Advertisers 3 The display ad
- 35. THE LOSERS 1 Digital ad trading desks 2 Real-Time Bidders 3 Programmatic buyers 4 Long-tail publishers