Broken Contract

Hitting a target no one else sees

Monday, the US Supreme Court declined to block the use of new technologies, like DVRs, which make it easy for consumers to record and time shift content while avoiding commercials.

There’s a really good piece in AdvertisingAge, written by Omar Tawakol, entitled, Advertising: The Price of Free Media that speaks to this issue. 

The main thesis is that technology — DVRs and ad-blocking software on the internet — has broken the contract between consumers, who want free content, and advertisers, who were willing to pay for that content in order to expose their products to the consumers.

But that contract was built on a “push” model and limited availability of content: everyone watches the same shows, or hears the same radio programs, or subscribes to the same newspaper, and we all have to watch the same commercials, whether we are interested in the products or not.

We know the “push” model will not be coming back. Consumers have too much choice, and too little patience.

Which brings us to the era of targeted advertising and content, and the need for a new model that serves both sides.

It’s really not a long piece, but if you’re too busy to tackle it, here’s the main points Omar makes: By making consumers a part of the process, I think we can reinvent an acceptable implicit contract: Publishers provide content that is, by default, free for consumers but paid for by advertisers; advertisers get to fund the content in return for targeting the right consumers. Why would they pay for an ad that isn’t targeted?(Are you listening, Radio?)

Consumers get free content in return for allowing advertisers to show ads that are targeted to them. In addition, consumers get to monitor the data being used to target them. In order to make this a fair trade, publishers and advertisers that want to use the targeting data need to disclose their data practices on every page and every ad that uses the data. We can’t ask for free content while asking advertisers to serve untargeted ads.(emphasis added)

This should be good news for radio.

It will be for those radio stations and groups that have invested in sales training, in copy writing and brilliant creative production, and who are focused on results for advertisers, and compelling, irreplaceable content for listeners, rather than weekly revenue reports and cookie cutter formats for Wall Street.