Article written by Sean Cunningham, CAB – President & CEO
Picture this: You’re on your way to test and buy the new Cadillac CTS-V, with a 550 horsepower engine and best-ever features. Right outside the dealership door, you are stopped by an energetic man who introduces himself as “your new friend.” He says he knows you’re here for the Cadillac but he assures you that the enlightened option is a combination of 39.3 Vespa Scooters (14 HP/scooter).
“It’s transportation with 550 horsepower,” he says. “And you’ll get 4,600 miles per gallon with your Vespas. That’s an astronomically higher return on investment.”
When you ask about delivery and warrantees, though, New Friend has two disclaimers. A web of middlemen handles fulfillment, so you won’t know where your Vespa is coming from. About a third of the scooters might not even exist, some may not have brakes, others may be stolen, and others may never leave Ghana. As you grab the handle on the showroom door, New Friend insists you’re not focused on what’s really important. “We’re clearly moving into the Post-Cadillac Age,” he says. “It’s a new transportation paradigm altogether!”
You make a mental note to keep talking with New Friend. There’s a good idea in the Vespa proposition. It’s just not a substitute for the Cadillac.
Aggregation isn’t concentration
That’s a parable of this year’s pre-Upfront posturing. Ad tech giants and startups alike proclaim they’re ready for their “just like TV” close-up. Just don’t look too closely. They’re trying out TV-like content in an environment that lacks the scale of commitment required to be the bedrock of $280 billion in advertising spending.
Their decision to focus on original programming (and the promotion associated with it) presumes that’s all that has been missing, and that the math will do the rest from here on out. The feeling is that mixing old-school content with the best in ad tech, what can possibly go wrong?
At the moment, though, pure-play online video confronts advertisers with a hodgepodge of newcomers and niche content from across the internet. To mimic TV, unconnected audiences need to be aggregated. The magic’s in the math, supposedly – profiling, aggregating, optimizing.
Two assurances make the TV Upfront more mission-critical than ever for the world’s biggest advertisers. Viewers committed to TV shows convene for them by the millions, and extend their commitment across screens and social networks. They convene in time and over time, and their commitment deepens along the way. So advertisers get the unifiers they can plan and count on to move products en masse throughout the year, year after year.
Concentration is power
TV means iconic content brands airing more than 3,000 programs a week, with more than 2 trillion video streams annually on TV alone, and a viewing commitment of more than 75 hours/month. Add in internet interaction with TV content and brands, and the commitment exceeds 90 hours/month. That’s for cable alone, where nearly 50% of revenues go toward a $25 billion a year commitment to original programming, with 3X the “normal” TV trial period for new shows.
This content commitment intensifies and produces increasing returns over episodes and seasons. What’s more, it acts as an authentic bonding agent in the digital diaspora. Advertisers buy their way into the bond to create the kind of sales call that’s missing in much of today’s online ad model. The ad contract and model are proven and transparent. You get what you pay for.
In the case of pure-play online video, the benefit for advertisers gets a little cloudy. Theoretically, they get a chance to be circulated and seen by people across a breadth of sites. The picture gets murkier when you consider the truths coming to light about the internet as an advertising frontier: 36% ad fraud, 55% unwatchable ads, 55% “tech tax,” and more. You don’t really know where your money’s going or what you’re getting en masse.
Pure-play online video is alluring. It’s new. It’s just creating rules of a road it is paving. And that is valuable. But we need to keep things in perspective.
Aggregation is relative; commitment is absolute. We are entering an era where advertising is framed by the commitment of audiences to the content they invest time in. In this era, TV is more valuable than ever. It’s not about how much horsepower you can aggregate; it’s what happens when you put your foot to the floor.