Posted by What if everything we knew about buying and selling advertising was about to change?
Charlene Li is the co-author of the groundbreaking best-selling business book, Groundswell, with Josh Bernoff. The former Forrester Research executive (she now runs her own consulting firm, Altimeter,) gave the opening keynote at the CMA – Canadian Marketing Association National Convention and Trade Show where she discussed a very interesting (and different) perspective on how we may be buying advertising in the near future (full disclosure: I sit on the Board of Directors of the CMA, and I am also the Program Chair of this event).
In a slide titled, Personal CPM, Li mused about flipping the funnel on the traditional way that media is bought. Instead of looking at the publisher’s inventory, location of the ad, size or length, reach of audience and overall value, we should forget those metrics and look at who is interfacing with the ad and what value they – as an individual have. Who cares what the ad space is worth if we can define what the individual seeing the ad is really worth?
Let’s look at how this might work.
In order for the concept of Personal CPM to be effective, advertisers would need a major indoctrination into the world of web analytics (this won’t surprise people like Avinash Kaushik or Bryan Eisenberg) and be able to merge and sort this data with a blend of how (and who) they are connected to through online social networks – think about a world where people have given you (the advertiser) permission to connect not only to them, but to who they are connected with (something like a Facebook Connect on steroids).
What if we stopped measuring the reach and audience of a traditional ad within a media property and started measuring who was seeing the ad and based the value of the ad on metrics like:
- The value that the individual has as a potential customer (i.e. if you’re selling sneakers and this individual has it listed in their profile that they like running and long walks).
- The overall influence of the individual.
- Some kind of influence number. Even if they have thousands of real connections, it does not mean that they have any significant level of influence to their network. We could look at who links back to them, how often someone re-publishes their content, or how frequently they are mentioned outside of their direct connections.
- The number of influential friends they are connected to. This is somewhat like the concepts discussed in the book, The Tipping Point by Malcolm Gladwell or Unleashing The Ideavirus by Seth Godin. We could also look at how "well-connected" this individual is to others who are either popular or recognized as influential. The biggest win here would be to not just look at the pure mass number of people, but rather their circle of influence in relation to the advertising being present (i.e. you might be very well known in the marketing circle, but how influential are you when it comes to people making decisions about buying a new pair of running shoes?).
New models of advertising and media will scare a lot of people. It’s easy to look at the notion of a Personal CPM and find a million holes in it. It’s easy to take shots, dissect it, and be a non-believer. Or, you can think about what Li is proposing and re-imagine a new way of really measuring brand engagement and the value of advertising by shifting it’s worth away from the space and over to the individual seeing it and what they are worth.
It’s your choice. What do you think?
Never another podcast episode or article 
Now I am confused. Is this new? I thought concepts like this had been proposed already in the past? I know, and I am sure this was inspired by SPOS that I blogged about it before, kind of wishful thinking from a consumers point of view.
I guess it makes more sense to saddle the horse form the advertiser’s POV.
Mitch, I do think influence is a big component but here are a couple of tangents…
One: What if the influence one has is based on their political office? i.e. the mayor of a local town, or a state legislator, or constable. Could said influence be a black hole that gets bigger and bigger? Political power begets influence begets more power begets more influence. Could be hard to steer that ship when it comes to advertisers…see lobbying government.
Two: Does the active mother of a large family have as much influence and purchasing influence on her circle of friends as a blogger with a thousand subscribers/followers? Sidenote: She does little to nothing online to build her community. Most of her interactions are WOM and small groups.
I’m a big believer in measurement and think the days of traditional media (radio and tv)getting a free pass when it comes to accountability are just about over. I think businesses must follow Eisenberg’s approach of “Always be Testing.” See what works and make it work better. A specific Influencer number or not, there is value in knowing how your customers view your company and how they are impacting it, with purchasing dollars or words of criticism. see domino’s,dell,comcast
@stefanholt
@Sebastian This has been talked about a lot before. Organic had a post about it a few weeks ago as well. However, I think it was TED last year when people started talking about it more recently.
It’s always been a great idea, but that’s just it. It’s only an idea more then anything else right now. I would love to see a major brand/site test this out with 5% of their inventory and see how it goes. We need to more beyond the idea stage and into the reality stage.
I think we keep forgetting the fact that for the media platforms, the ads are part of the their products. It is up to them to make sure they are appealing to their audiences. That includes: earning their audience’s permission; refusing to run any SPAM or SCAM ads; and/or working with advertisers to offer more values for their customers.
Godin would call this a “sneeze per thousand” or maybe “cost per sneeze”.
Flipping the traditional buying funnel is possible…. Online video metrics will shift from CPM to a TV-comparable iGRP soon… very new way to capture behavior but very needed to bring TV and online video advertising together. An iGRP doesnt take “influence” in to account but it does factor in viewers; behavior (what they watch, what they dont)
White paper on iGRP: http://www.yume.com/resources_downloads/YuMe_iGRP_Whitepaper.pdf
Measurement is a problem in what Li suggests. Without being intrusive I don’t see how you can data for any sort of a model of the worth of an individual.
I would challenge you that the notion of Personal CPM is not new. Well not to me anyway. To some degree the model Li proposes is just the tip of a massive marketing opportunity iceberg which advertisers will soon be chipping away at in order to connect their products to aggregated online social networks. I.e. a person who loves M&M’s has 1,000 friends who in turn connect to some hundred’s of thousands, if not millions, of people. Ad agency offers this individual (and each one thereafter) an incremental percentage of the revenue based on ‘how the message’ is carried throughout the swarm.
In this case the campaign will have a media tracking code (MTC) which will identify who connected with it and when and where they made a purchase. New, sophisticated monitoring and measuring programs will enable the agency to differentiate between real-world offline purchases (those not enticed, nor aware of the campaign) and those whose purchase was directly influenced by the campaign itself – even via which digital media – mobile, internet, TV.
There is of course a term for it……….which I will write about in due course.
TFD