Even channel 10 dont want you to watch ads

During the screening of the movie Kenny this evening on channel 10 a strange thing happened. Just as they went to the break, Kenny pops up in a 10 promo screen and says "its probably a good time to duck out for a quick number 1s, or a really quick number 2s". Being that the movie is about toilets it kinda made for a funny opener to the ad break but I'm interested to know what the advertisers who have paid good money to screen their ads during the break think of it. I'm guessing they would not be overly impressed with channel 10 telling their viewers that they can stop paying attention for the next few minutes..

I'm sure these advertisers are well aware of the fact that during the screening of a movie people will often get up and do something else whilst the ads are on, but to have channel 10 actually promoting it is something I didn't expect.

Telstra's Handle on Truth in Advertising

Telstra, Telstra, Telstra. Can nothing go right for Telstra? Today a report in The Age, that Telstra pulled a series of advertisements about its Next G mobile telephone network after the Australian Competition and Consumer Commission (ACCC) raised concerns regarding the validity of particular statements. The statements in question – “Everywhere you need it" and "Get the coverage you need" were of particular interest to the ACCC.

When the ACCC head, Graeme Samuel, says "when the whole of Australia is not covered and coverage is not always available where consumers need it" – it comes across not only as a critic of Telstra’s advertising, its a damning critic of Telstra’s services and products.

No matter what you are selling, a product, service or yourself - you have to be careful in what you promise that you can deliver. Nothing is worse than a “let down”, and nothing destroys integrity and authenticity like false claims and incorrect brand positioning.

On the whole “truth in advertising” topic just a couple of random points:

1. Your Consumers can handle the truth. In fact we crave it and when we don't get we are disappointed.

2. Consumers are great at taking the piss out of you brand - and in the process redefines your brands image...FOR THE WORSE! Check out these good examples from valley of the geeks…

3. The Heart Foundation Tick of approval. A friend of mine worked one of the campaigns for the Heart Foundation Tick. The original copy for the ad was "the Heart Foundation Tick - the label that can't be bought". After some due diligence, the lawyers worked out that they couldn't say this, because companies do have to purchase the right to have the tick displayed on their products packaging, even though the food also has to meet other nutritional requirements. That is the label can be bought, and in fact, is bought. So they had to revise to the new tagline: “the tick that can't just be bought". I thought this is good anecdote that highlights sometimes how fickle all this truth in advertising can be. I am sure Telstra will live and learn…well at least live!

Has Adwords already ruined Youtube overlay advertising?

There was once a time in Youtube's life where industry luminaries questioned how a startup that burnt millions each month in bandwidth costs could be financially viable. This was before Google jumped in with their $1.65bil life raft and set the company on the its current path of world domination. The questions went away after this happened and since then very few have given much thought to the problem but undoubtedly it was consistently appearing on agendas in the Googleplex boardroom meetings. Last week google announced they will be offering overlay ads on Youtube videos and more than a few in the advertising world started to wonder if this could be the next Adwords, the next great revolution in online advertising.

There is no doubt that Youtube gets a lot of traffic. This time last year Youtube were serving up 100mil videos each day but taking a closer look at the figures, overlay ads may not be the great white hope they would like it to be. In fact Adwords may just be the reason this never takes off.

The new system charges advertisers $20 per 1000 views and Youtube say they are likely to get between 2.5% and 5% click though on the overlay ad. In the old world of pre-Adwords advertising that would have been fine but thanks to Googles pay-per-click system of advertising advertisers have become accustom to only paying for what they can measure. They like it this way. They can now finally justify their marketing spend.

Of course the 95% of viewers that don't click though are still registering an impression and from a branding point of view that might be all well and good. The problem is advertisers are being asked to go back to the old model of "pay for something you don't see a tangible result from" and this will undoubtedly be a tough pill to swallow.

If you had spent the last few years only paying a spruker per person that enters your store then all of a sudden they said "but I deserve to be paid for the people that will come back another time" would you do it?

Fragmentation and Advertising Value

So I listened to the Cameron Reilly interview with Geoffrey Bowll, Managing Director of Melbourne based ad agency Starship today. Excellent interview! Two intelligent guys, not afraid to call a spade a shovel. Definitely give it a listen. And thanks to Jake to bringing it to our attention :)
One thing Geoffrey Bowll was talking about in the podcast was, with the decline in TV audiences and increasing media and audience fragmentation, how this could be used by advertisers and marketers to their advantage.

Consider a simple (crude example). Suppose a clothing manufacturer has two choices to advertise their products; TV ads and Podcast sponsorship.

TV ads: cost of ad airtime = $20,000 for 1,000,000 views or eyeballs.
So, disregarding notions of brand awareness and loyalty etc, for this ad to just break-even (at an industry standard 10% EBIT return on Sales) it would require $200,000 worth of sales. If we assumed each purchase for a person was approx. $50, that would be 4000 customers, from that one ad, that would need to be compelled to purchase the product to achieve an acceptable ROI on the advertising expense.
To break-even:
TV ad rate of return per set of eyeballs is $0.2 (each person who sees the ad needs to spend approx 20 cents on your product to break-even)
TV ad conversion rate needs to be 0.4%, which is the percent of people who saw the ad that need to buy the product to break-even, (given an average purchase price of $50 per person).

Podcast sponsorship: Now let’s consider the alternative. Suppose there was a podcast dedicated to fashion. This podcast has a modest audience of about 30,000 listeners. Rremember people who are listening to a fashion dedicated podcast are most likely fashion enthusiast, industry people and early adopters - a marketer’s wetdream.
Ok, so the audience is small but the cost of the sponsorship will be small also. Let’s say the cost of sponsorship is $1000 per podcast episode (this is an upper range estimate - the rate for most popular podcast is $25 per thousand listeners / downloader’s).
To break-even the podcast ad would need to generate $10,000 worth of sales. This gives us the following to break-even figures:
Podcast ad rate of return per set of eyeballs is $0.33
Podcast ad conversion rate needs to be 0.67%

If you are aiming to get 4 people out of every 1000 people who see your TV ad to purchase your product (with the likely TV audience a scattered demographic), getting 7 out of every 1000 people who hear you podcast ad, with an audience that you know is interested in a similar topic, likes to support the "free podcast” they are receiving and are generally early adopters, seems like a walk in the park.

My advice to anyone considering moving from traditional media advertising to new alternatives: Give it a try on a small scale. Build in tools and applications that enable you to track results. The small cost of new media makes it a small risk in which you can easily track the results.

And for those that think fragmentation and the shift from traditional media is not happening, check this article on Afterworld. Afterworld is the first television series to be made available on mobile phones and the web simultaneously, created by three-time Emmy-nominated producer Stan Rogow.