You Tube Ad Selection Could Unlock Online Advertising Value

By giving users the option to choose which ad they prefer to see, and allowing them to pick pre-roll or in-stream, You Tube is one of the pillars of digital media into digital advertising – interactivity. My only question is what took so long.

Content providers and social media mavens preach about the user controlling their experience. It’s where the proliferation of technology has taken media – from a one-way, produce controlled experience to an interactive user-controlled phenomenon. Everyone writes about it, acknowledges it, knows it, but it has yet to successfully take shape in digital advertising. Until it does, the economic model for digital will struggle.

Though I have not seen the You Tube implementation, I see many benefits to the implementation I envision. First, users are immediately more interested in the advertisement because they chose to watch it, thus likely picked something in which they have at least some interest. It creates a self-selection process better than targeted ads, in which users say “I want to see this ad”, which goes a step beyond sophisticated software telling them what ad they want to see. Of course, that software may eventually play a role in what choices the user has. Second, regardless of how privacy issues play out, it opens the door to a slew of valuable market research – linking who is choosing to watch ads from certain brands, what type of videos are affiliated with certain advertisements, to name a few points. Clever marketers could also do indirect surveys, by providing users with a list of different ads for the same brand to evaluate effectiveness, or ads for different brands for the same company to test target market.

Also important, it puts the onus on the creative. Part of the reason ad dollars online lag traditional is the ineffectiveness of the marketing. Simple banner ads, or boring slogans don’t cut it. Users want informative, they want entertaining, and they want interaction. Essentially they want content. Digital ads need to become content. Putting users in control forces marketers to develop the best ads possible, or nobody will watch them. Besides not getting the message out it will create a negative perception for the brand in the digital world. Challenging marketers will improve quality across the board. Possibly more dynamic ads, or ads that are custom to the individual and have direct interaction, bottom line it should stimulate innovation.

The question remains how to implement the economic side of this model. Do you penalize poor marketing by charging higher rates, or charge more to ads that more people like, which could remove some incentive to be great. Is CPM, CPC, how often its selected, or any of the above the right metric to use? More to come on that front, for now let’s see it action and work out the model.


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