The issue with digital media

This Sunday the Superbowl took place in America and for marketers it’s a massive excuse to spend copious amounts of money on half-time T.V. ads. Placing an ad costs $4 million, a lot of money regardless of how much it costs to create the ads. Lets ignore the production costs for a moment and focus on that $4 million figure. Digiday pointed out some interesting stats about what you can do with that kind of money:

Over 100 million video impressions on Hulu

According to media buyers, Hulu currently sells its video ad inventory at around a $30 CPM. Therefore: $4 million / $30 CPM = 130 million impressions

 

Twitter’s Promoted Trending Topic every day for a month

Promoted trending topics on the social network currently sell for up to $120,000 a day. Based on that figure, $4 million would afford you the paid placement every day for at least a month. $4 million / $120,000 = 33 days

 

50 million Forbes.com first-page interstitials

Media buyers say Forbes charges around an $80 CPM for its welcome interstitial ads. At that price you could buy around 50 million impressions, but even if every impression hit a unique user, that’d still only be half the potential audience for a Super Bowl ad. $4 million / $80 CPM = 50 million impressions

That’s a lot of advertising bang for your buck. Locally if you wanted to put that figure into perspective $4 million equates to R36 million, which at a CPM rate of R250, equates to around 145 million impressions. According to the DMMA you could essentially buy every single publishers impressions for about two weeks with this kind of money. Considering this is a high-ish CPM for such volume you’d be looking at even more impressions and reach possible.

If marketers can get such “bang for their buck” why aren’t they pumping even more money into digital ad placement? Yes I know digital grows 20% year-on-year but the truth is that it’s going to take a while for the revenues to be meaningful and massive T.V. productions such as the Superbowl will still need impressive adverts.

The reason marketers will still spend $4 million simply placing an advert is because of the flash and the story. The one thing a banner, rich media or interstitial ad will never do is make you enjoy a story. Viewers watch the Superbowl adverts then go home and Youtube the videos again and again. No one in the history of the world has said “wow I want to watch that banner ad again!” Have you ever heard of model Kate Upton (who appears in an ad this year for Mercedes) in a digital ad campaign? I think not.

What’s the solution? It’s time to add a narrative to online advertising. Hire a writer, a storyteller or someone who can help create a reason for a user to go from a banner to a site that has a story that really engages the user.

FederatedMedia

The banner advert is dead

It doesn’t take a genius to know that the online advertising model is damaged goods. It makes little to no sense to sell thousands of impressions for cents and then have to undercut the price of those ads to compete with low cost bloggers or content farms. The old adage of “trading analog dollars for digital pennies” remains true and the only people really making money are the advertisers who charge for the production. Federated Media, an American company that sells display advertising for various types of websites. It’s a bold move but it makes sense:

“The model of ‘boxes and rectangles’ – the display banner – is failing to fully support traditional ‘content’ sites beyond a handful of exceptions,” wrote Federated Media founder John Battelle in a recent blog post. He explained that the next generation of native ads on social networks and strength of Google Adwords make direct sales more competitive, and that ad agencies must evolve with the growing trend of advertisers who want more social/conversational ad campaigns.

 

Essentially, it no longer makes financial sense for companies like Federated Media to hire a team of people to find and keep track of advertisers who want to buy banner ads. And if publishers still want to fulfill what they view as a demand for premium-level direct banner ad sales, they’ll need to use a self-serve ad service like isocket.

 

Federated Media plans to refocus all its resources into the two areas of advertising it believes is growing. The first is its premium conversational & native advertising, which includes sponsored posts, special coverage sections, and ads/promotions that are more directly integrated with a publisher’s content. The second area is in less expensive, “programmatic” advertising, which automatically displays ads on websites at all times.

It’s about time someone took a stand. Publishers are quite literally getting screwed, it’s almost a charity to be an online publisher these days. Federated Media is going to hurt in the near future but it’s a move we all should support.

Source (Venturebeat)