Tuesday, June 9, 2009
Digg This: Digg's Newest Innovation Will Save Advertising
By Joe Marchese
Google has made billions for a lot of reasons, but no reason is more important than the fact that Google created a marketplace that rewards good advertising. Sure, good advertising should always be rewarded by selling more product, but when Google's magic system started rewarding marketers by reducing the price per click for "good" ads, it created a virtuous circle: better ads, happier users, efficient pricing for marketers... oh, and of course more money for Goooooooooooogle.
With all Google's success, one would think all interactive advertising systems would begin rewarding marketers for making ad content people like. Yet, surprisingly, there are few such systems. One problem is that for ads where there is no direct-response action required (all "brand" advertising), how can you tell if the community likes it? Enter the Digg community and Digg's recent announcement of "Digg Ads." Digg has built a community on the back of people telling Digg, and each other, what they like. Why not advertisements? And if people like the ad (or at least don't hate it), shouldn't the marketer get a break on media pricing?
Think of it this way: If an agency creates something so compelling that people would share it with each other on their own, then they could get "free media." Of course this presents a variety of problems. Most important, it turns advertising into a studio model, with lots of flops and a couple of hits in terms of reach. That economic model isn't one most marketers I know would want to apply to their product launches. Also, as mentioned here many times before, consider the dreaded result of a viral video that gets millions of views because it's funny or edgy, but doesn't sell product.
What the advertising world needs is a spectrum somewhere between "Give us whatever message you'd like to shove down people's throats and we'll make sure they see it as long as you pay for the media" and "make a video of a cat playing piano, wearing a hat and singing about your product and you won't even have to pay for media."
Imagine what creating a pricing spectrum based on how much people like particular ad content would do. Quality creative agency work would result in cost savings for marketers on media distribution. The new agency role would involve a far more integrated media planning, buying and creative development. Agencies could allocate the proper mix of resources against asset production vs. media spend (very similar to search engine marketing).
This model would also begin solving the issue of where agencies will generate revenue. Agencies could earn an entirely different fee, based on optimizing the allocation of a client's budget to achieve maximum message reach and impact based on a system that rewards great creative. And by the way, advertising online could start to get better -- and eventually, it might even start to make sense in social media!
This commentary is insightful. I recommend it to others.
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Joe Marchese is President of socialvibe.
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