A couple of interesting articles I read the last couple of weeks. An ANA survey showed that only 1% of the advertisers their agencies compensate on the value they deliver. Time Inc. is partnering with Starcom Mediavest Group to guarantee that magazine ads will work and today on adage a statement that media owners need to join the compensation discussion. So there is a trend going on but moving like a heavy weight truck. Slow to start but will be hard to stop. But I would like to tell media owners, embrace this as it provides a wonderful opportunity!

Ok, so today’s reality is that media owners sell reach (eyeballs, impressions, exposures, opportunities-to-see, etc) and the agencies try and reach those relevant for the brand through the most effective and effcient media. Right? Not really!

The real reality is that media owners sell reach because agencies buy them and agencies buy them because advertisers hardly see the value difference between 1000 targeted exposures here versus 1000 targeted exposures somewhere else (and agencies and media owners have a hard time making the case differently). But the trade being based on reach and exposures has led to a significant decrease of value delivered. And the reason is simple, agencies want cheap exposures and as a result media owners try and optimize the amount of exposures they can deliver; and nobody is really concerned about the value that is being delivered. Result: clutter, ads in irrelevant environments, lack of demand towards quality media, etc.

So much will change if media owners would start to optimize their inventory based on the added value they create for their clients. For example, I truly believe that a well positioned 1-minute ad in a 1-minute commercial break (pod) could easily deliver more added value to the one client compared to the total value creation towards 10 clients with the current practice of 10 ads in a five minute break. In theory this means that clients would be willing to pay more than 10x as much for a uniquely owned one minute break than having 30 seconds in the cluttered environment. Makes sense?

So the media owner would increase revenue, the client gets more bang for its buck and this would also be great for consumers. Instead of having five minute intervals they only get a 1 minute break with an ad that is much more likely to be relevant. So this is a win-win-win!

The reason this is currently not happening is the fact that agencies and media owners have not been able to fully quantify value ad(d) in a credible way. A media owner would of course not be trusted with the argument, spend more than 10x as much in my medium as we have commissioned research that shows that you get more for your buck. Also, quantifying the added value is quite technical and specialist and not an easy subject to engage clients with.

But the changes will happen when media owners start to sell value. If a media owner would, for example, guarantee a certain increase in brand recall they could find out for themselves (and not for their clients) that delivering a 1 minute exclusivity in a break is the fastest way to deliver on the guarantee while minimizing usage of inventory. At the same time they’ll see ratings go up (less annoying breaks) and the decrease of supply would further increase prices.