Publishers clinging to 25-year-old CPM model while everyone else talks commerce
Steffen Svartberg, founder and chief executive officer of Cavai, believes that brands want outcomes, users want experiences and, basically, no one necessarily wants an ad. So how does adtech keep the internet free?
Nice ads alone won’t cut it anymore
How’s that mission going? The shift of so many publishers into subscription models indicates that it’s not going terribly well. Much of the best content on the web sits behind a paywall, accessible only to the privileged who can afford to pay for it.
So no, the prevailing advertising model isn’t keeping the internet free, and it isn’t doing a great deal for publishers either. Where they are increasing their share of advertising dollars, it tends to be through content marketing, a tricksy model that blurs the line between commerce and content in a way that may or may not damage the trust they share with their audiences.
Clearly, if we are all serious about keeping the internet free, we need to do better than a media pricing model that is failing to grab much of a share of advertisers’ vast spend from the big tech platforms.
At this point, it is standard practice to bash Google, Facebook and Amazon and lament the fact that publishers, while pumping out the best of the internet’s content, struggle to get on the scoreboard in revenue terms. We hear that big advertisers would like to shift their budgets out of the monster platforms; but, if anything, they always find a reason to invest more.
The fact is, the big tech companies aren’t beating publishers to digital ad budgets simply because of some inherent unfairness in the universe, but because they talk in terms that advertisers – many of them publicly-traded CPGs with a burning need to sell as many products at the highest margin possible – find irresistible.
While publishers talk excitedly about rich-media ad formats and attention metrics, big tech sells advertisers real business outcomes. And while publishers cling to a 25-year-old CPM model, the new world order understands that big advertisers, very much like the platforms themselves, think in terms of results, not incidental metrics.
Publishers can sell a brand a nice ad; they can assemble a pre-warmed panel, give them burgers and ice creams and prove that some people saw it; but then what happened? How did it move the dial? We don’t really know.
In a hard-headed commercial world, brands have moved far beyond the time when you advertised just because you had no other means of reaching people. Marketers want outcomes, and if pretty ads aren’t working, they have other ways of achieving them.
Other parts of the digital marketing business know this. There is a reason, after all, why so many agency jobs nowadays mention the word ‘commerce.’ Brands need to sell, they need to genuinely engage, and with commerce woven so completely through the internet, ads can’t just hope for sales and engagement; they need to make them happen.
Ah, say the publishers. But what about the value of branding? Showing what you stand for? Being considered, being top of mind?
Of course, branding is important across the board. But in digital, where a thousand images flicker across our retinas every moment, the type of funny, or clever, or beautiful imagery that would make an impact in out-of-home (OOH) or TV or radio struggles to cut through, however it is framed. We have inherited metrics from the old times, but whereas TV and other traditional media offer a finite number of impactful ad slots, the internet explodes with unlimited images and videos, all signaling for our attention from every angle. Even if they are successful in catching it, how can a consumer possibly remember any one of them after a day of browsing?
That is why, in digital at least, branding now means user experience. Amazon’s own best advertisement for its brand is the experience it provides: the choice, the convenience, the swift service. Not every brand is Amazon, but every brand needs to create its own version of those experiences.
So that’s the world as it stands: users want experiences, and businesses want outcomes. Nice ads alone don’t cut it.