There's a hidden lesson in fellow MediaBizBlogger Walter Sabo's, The Internet: Nobody Knows Anything. Don't know if Walter intended this, but my thanks to him just the same for giving me fodder for what follows here.
Walter quotes an "advertising expert" re: pre-roll as saying "…and if they watch it all the way through it tells us the viewer was really interested." Bear in mind, pre-roll ads suffer a 40% (and growing) abandon rate. But it isn't so much what this statistic says about those who outright reject the pre-rolls that begs closer scrutiny (heck, we know how they feel), it's what it says about the other 60%, and the news isn't good.
Let's start with television. Time-shifted viewing enables us to eliminate the ads outright if we so choose – the TV equivalent of pre-roll abandonment (although in the case of DVRs it's more like pre-meditated murder). But what about real-time viewing? Are we to assume that TV viewers in real time are any more tolerant of (let alone interested in) the ads just because they can't as easily avoid them? I think the more logical interpretation of this behavior would be to conclude that those of us going out of our way to avoid the ads on TV correlate with the folks jumping ship on the pre-rolls. The rest of us just haven't put on our lifejackets yet, even though the water is getting deeper. At the very least, pre-roll is a business model based on a specious premise: that somehow we will tolerate the online version of something that we willingly pay extra to avoid on TV.
Pre-roll's 40%+ abandon rate notwithstanding, 100% of the online audience has turned a blind eye to the ads (according to Econsultancy, nearly 30% of young adults aren't even aware of the ads online). Case in point, just last week I challenged a group of ad execs from a big agency in Chicago to describe the creative for three online ad campaigns – their own agency's work included. No one could do it. Can any of you reading this? Me neither. In essence, we have adopted an online ad model that, for all intents and purposes, performs at statistical zero. That's what an average CTR of .06% (1-in-1667) describes. At these levels, even a doubling of clickthroughs to 1-in-833 still equals statistical zero. And remember, 1-in-1667 is the average, which means that every better-than-average response is offset by a worse-than-average response.
So, from a brand reach perspective it would seem that the online ad space has little to recommend it. And this isn't just my opinion, it's the USP behind Facebook's rapid rise to dominance in the online display ad space. They let you know right upfront how worthless their product is by offering all the empty impressions you can eat for only pennies per thousand. Their unique selling proposition is that they have more of what doesn't work than anyone, and at a better price!
The whole thing is idiotic. We have an overabundance of a commodity – the ad supply itself – in which there is (statistically, at least) absolutely no consumer interest and for which there is absolutely no consumer demand, and we have the world's biggest seller of this commodity, Facebook, proclaiming its utter worthlessness by pricing it at only pennies per thousand. And yet, somehow this business model has been able to capture a 60% share of the market in just a few years.
Am I the only one who finds this all a little silly? I mean, if the audience has neither interest in nor demand for the ad space, and the biggest seller thinks it's worthless, why in the world would an advertiser want to buy it? It's like justifying the reason for drafting a particular ballplayer by saying, "He's not much of a hitter, but he's slow."
Back to that hidden lesson in Walter Sabo's piece: Maybe the problem resides in the quality (or lack thereof) of our advertising experts. Maybe we should look to the big dog, WPP, for the lead on this. The timing couldn't be more propitious. Just last week they announced a new social-media initiative whereby they're planning to tap the collective brainpower of some 5,000 social media experts. I wish them luck, but I have a feeling what's going to emerge is something that many of us already suspect: apparently Facebook is doing the same thing to the meaning of "expert" that it has done to the meaning of "friend".
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