Terrific Ad Week article that illustrates why advertising can no longer be about reach and frequency. While that measurement might work in a linear, one-way world, the web brings interaction and better ways to measure engagement. And while CPM and CPC prove a known standard for pricing, it does not measure the attentiveness and interaction with the brand. "'It's like going to a 3-D movie without the glasses,' (Morgan) Freeman (CEO of Betawave) said. 'The Internet is more dimensional, but [for the most part] measurement criteria are the same as a one-way medium. You don't have the glasses so you're not appreciating the dimensions.'" What a great a analogy.
The web, and soon interactive TV, is more than just impressions. It is about the consumer spending time and interacting with the brand, from reading its blogs, to watching a related video, from playing an on-line game to downloading a coupon. It is at the heart of social networking and affords an opportunity to build real stickiness of the consumer with the brand.
For that reason, Facebook has great revenue potential. "Facebook, for instance, has a two-tiered ad system. Its self-service ads are mostly cost per click, while it sells "engagement ads" on an impression basis. A Facebook rep said the company has no plans to change that, pointing out that 'most of the industry still expects to buy on the standard CPM/CPC models.'" Still, they seem poised to take full advantage of the trend in advertising engagement that is taking place.
And yet the ad community is slow to adapt. I recall how hard it was to convince ad agencies that cable TV offered a more effective reach, than broadcast, with niche programming rather than general entertainment. The same holds true today. Studies have shown that consumers are far more digitally savvy than agencies give them credit. Thus ad dollars are slower to be moved into this new medium. Eventually, they will catch on.