By Joseph Gray
TEMECULA, Calif., Oct. 1, 2006

The potential for such a CPA Television model begins with a reverse adaptation of the existing DRTV model. One where the currency of trade is simply to pay media based on consumer responses in a bid environment somewhat similar to the Pay per Click Internet Industry. Such a bid environment would consider what the advertiser is willing to bid per consumer response as well as track and measure the response rates of your commercial. A CPA yield based measurement and management approach would allow stations to understand what they are making each time they run your commercial on a CPA basis. A sophisticated and automated platform would operate behind the scenes making sure that relevant delivery of your commercial is taking place while also insuring that the campaign is optimized to produce maximum yield for the TV stations.

Isn't it about time we let technology do some of the heavy lifting in the television advertising industry while at the same time providing media with real transparency in terms of how ad inventory is priced and sold? It is precisely because of the transparency that media prefers not to cooperate with traditional internet auction types of models some of which have been recently proposed. In an evolved CPA Television model, TV stations are not concerned because they are not really selling advertising, they are in fact selling consumer response. Try to work that formula backwards, you can't. And because there is not a correlation between revenue generated and inventory sold, television media gains the transparency they have longed for. Internet Media Affiliates, working through Google's Per Click model, enjoy this advantage today why not Television Media?

Now that you understand how the proposed model would work, let's take it to the next level. Imagine the possibility of being able to target your consumers across the huge fragmented television industry without the overhead of traditional DRTV management. Finding out what TV media your customers are watching is easy, just choose from an automated menu of demographic targets or programming segments. Now brace yourself, you've just successfully executed a comprehensive television campaign across over 1000 plus television stations where your results are guaranteed. Not getting enough airtime? Simply increase your bid rate to make your creative more profitable for the media in comparison to the market competition bidding against you. Don't be fooled, the traditional DRTV model works the same way; it's a bid environment but one that doesn't leverage technology and puts the onus on the agency or advertiser to manage risk and manage programming choices that in the future will be far too vast for any human to be able to manage.

TV TIME AUCTION HURDLE

With metrics as the clarion call of agencies and advertisers, the Wall Street Journal opined early in 2006, "Much chatter this year is likely to center on marketers' increasing demands for better measurement of the effectiveness of their commercials. Advertisers are no longer content with simple measures such as circulation numbers or Nielsen ratings..." (2) Such sentiment was further championed by John Stratton, CMO of Verizon Wireless, at a Madison and Vine Conference in February when he encouraged the industry to become more relevant: "Your clients are absolutely in trouble and they are looking for you to save them...What you've been selling for the last 50 years no longer works."(3)

Is it any wonder then that advertisers, such as Wal-Mart(TM), Lexus(TM), Hewlett-Packard(TM) and Microsoft(TM), among others, are working on a pilot online trading system for television airtime with eBay(TM)?(4) But non-CPA based auction systems essentially pit stations against each other in competition for advertiser dollars. While it may seem a solution for advertisers demanding more quantifiable results, it actually treats media as a commodity and is likely to fail for a variety of reasons, including the inability to make buys far enough in advance, as well as the inevitable station backlash over the idea of commoditizing their lifeblood - their airtime. Stations want and demand more transparency. Let's give it to them while at the same time achieving what advertisers and agencies have been screaming for, guaranteed results.

It’s All About Results

In contrast to traditional media buying where consumer audience profiles and volume is the basis of decision making for pricing, the next decade of multicasting advertisers will target relevant programming through technology enabled systems and buy consumer responses instead, thus embracing fragmentation. This creates a fair balance between the interests of stations requiring a safe way to monetize their inventory, and the interests of advertisers wanting a media with price guarantees tied to ROI. Advertisers get their offers on the air quickly and easily, and pay only for leads generated. What could be easier or more effective?

The future of television advertising is here now and it is open to everyone...where will your next move take you?

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