Google's Ad Success Has Lessons For Television

from the ads-are-content dept

Patri Friedman points to a fascinating post by a Yahoo employee (speaking only for himself) speculating on the reasons Google is clobbering Yahoo in the search ad market. In a nutshell, Google was a lot quicker to figure out the benefits of ranking ads by ad quality rather than simply auctioning off the top slot to the highest bidder. Given that online advertisers pay on a per-click basis, more relevant and useful ads can generate more clicks -- and therefore more revenue -- than lower-quality ads. Because ads with higher click-through rates became more highly ranked, advertisers began to compete on relevance as well as price. They began to optimize their ads to generate higher click-through rates. The average quality of ads on Google began to improve. And here's the really important point: as the quality of Google ads got better, users started to discover that Google ads were actually useful and relevant, and they got in the habit of looking at them. This is an example of a principle Techdirt has been emphasizing for years: ads are content, and they're a lot more effective if they contain information people actually want. Google's experience belies the conventional view that ads are a necessary evil users have to put up with as the cost of getting the content they want.

Nowhere is that conventional view of advertising more entrenched than in the television industry, which is constantly wringing its hands (and filing lawsuits) over the detrimental impact of devices like the TiVo and Replay TV that include ad-skipping technology. I think the Google example demonstrates how short-sighted that attitude is. With a little ingenuity, TV networks could be using devices like TiVo the same way Google uses click-through statistics: as a way to gather data on user attitudes toward different ads. If networks priced ad inventory the same way Google does, giving a discount to advertisers whose ads had lower skip rates, advertisers would respond by trying to make more entertaining and relevant ads. And as ads became more entertaining and useful, viewers would be less likely to pick up the remote and push the "30-second skip" button.

Even more radical, the networks could be using TiVo-like devices to distribute shows and ads directly over the Internet. In that case, the device could display a different set of ads to each viewer, with the ads chosen based on the individual viewer's show-watching and ad-skipping history as well as some basic demographic characteristics. For example, users who frequently skip car ads would be shown fewer car ads. Viewers under 40 would never be shown ads for adult diapers, and all-male households would never be shown ads for feminine hygiene products. Such a system would be a win-win for both advertisers and viewers: viewers would find ads more useful and less irritating, while advertisers would be willing to pay higher rates for ads that were precisely targeted at relevant subgroups. And that would solve the "TiVo problem" once and for all: not by forcing users to watch ads they'd rather avoid, but by finding ways to show users ads they actually find entertaining and useful.



Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Douche, Oct 30th, 2007 @ 12:11pm

    feminine hygiene ads

    But I like those ads.

     

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  2.  
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    anonymouse, Oct 30th, 2007 @ 12:15pm

    irrelevant

    While watching some plastic surgery TV show last night, an ad was shown for a children's doll. Completely irrelevant, and all I could think of is - someone is paying for this commercial? There has to be zero value from having this commercial played at this hour.

     

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  3.  
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    rbb, Oct 30th, 2007 @ 12:16pm

    Just block 'em all...

    I guess I'm the type of internet user ad sellers hate. As soon as a new ad server shows up, I add them to the ad-block plus data file ;)

     

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  4.  
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    Anonymous Coward, Oct 30th, 2007 @ 12:27pm

    Re: irrelevant

    What are you talking about? Moms watch those plastic surgery shows and buy dolls for kids and grandkids and so forth. Marketing a doll for a kid to a mom is a strange idea so I bet the dolls are just marketed at kids and the moms know how to process it.

     

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  5.  
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    Dam, Oct 30th, 2007 @ 12:28pm

    It's Up To The Advertiser

    No matter how entertaining a TV ad is, if the advertiser believes in the hard sell, they will never go for the funny, entertaining ad.

    A product currently making the TV rounds is some pain reliever called "Head-On". It's essentially aspirin in a roll-on bottle. I would nominate them for having the most irritating ads on the air in the US to date. In fact, if more ads were made like theirs, any business making ad-skipping devices would be a Fortune 500 corporation.

    Then, there's Miller Lite beer, Fedex and a few other intelligent advertisers who realize the subtle, humorous or entertaining approach works well. These are examples of products and services that are at the top of their industry through ads that entertain.

    As long as the advertiser is paying the bills, obnoxious hard sell commercials will continue to exist.

     

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  6.  
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    Buzz, Oct 30th, 2007 @ 12:37pm

    Re: Just block 'em all...

    rbb, you are an evil evil user. How could block those ads? Those ads were paid for! The companies paid good money for those ads to be made! Those ads pay for the content you so earnestly seek! You should be ashamed...

    ...I use ABP, too. ^_^

     

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  7.  
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    Danny, Oct 30th, 2007 @ 12:38pm

    But...

    if the ads that I see become targeted to my demographic doesn't that mean that someone is somehow monitoring the ads that I watch?

     

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  8.  
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    I like Mike, Oct 30th, 2007 @ 12:39pm

    I would love targeted ads if it meant never having to watch another ad for feminine hygiene, hemmerroid cream, or erectile disfunction.

     

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  9.  
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    HIPYRO, Oct 30th, 2007 @ 12:45pm

    Re: It's Up To The Advertiser

    Yes, but the point of the article is that ads such as the Head-On spot will quickly fall out of sight of most viewers in a system such as this. There will always be incompetent marketing teams, but at least we will have an effective means of filtering out their inane attempts to sell us useless products.

     

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  10.  
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    James (profile), Oct 30th, 2007 @ 12:47pm

    Re: feminine hygiene ads

    I like the "older women" makeup and hair product ads. Those ladies are tha hottness.

     

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  11.  
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    Chuck Norris' Enemy (deceased), Oct 30th, 2007 @ 12:53pm

    Re:

    In 30 years you'll want those ads...well, maybe not the the feminine hygiene but you never know these days. /=}

     

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  12.  
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    TheDock22, Oct 30th, 2007 @ 1:09pm

    How does that work...

    How would this system work as you get older? If you blog all the ads for medications and other stuff...then grow older and block all the ads for beer and things you liked at the time...would you be left with no ads? Or would they try to sneak an ad in on you just to see how you react.

    Maybe you could set some general settings, like birth year and gender, then they would just show ads that MOST people in this demographic want to watch?

     

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  13.  
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    BTR1701, Oct 30th, 2007 @ 1:22pm

    Ad Skipping

    > If networks priced ad inventory the same
    > way Google does, giving a discount to
    > advertisers whose ads had lower skip rates,
    > advertisers would respond by trying to make
    > more entertaining and relevant ads. And as
    > ads became more entertaining and useful,
    > viewers would be less likely to pick up the
    > remote and push the "30-second skip" button.

    I don't know about anyone else here but when I skip the ads while watching a TV show, I don't stop to see if they're entertaining first. As soon as the show comes up on an obvious ad break (usually cued by a dramatic rise in the music or something similar), I pick up the remote and hit the FFW button. It doesn't really matter what ads actually follow or how entertaining and clever they are. I'm not interested. And even if I were, even the most clever ad in the world is only entertaining the first time. After the 82nd time I've seen it, it's lost whatever marginal charm it may once have had.

     

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  14.  
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    Avidhiker, Oct 30th, 2007 @ 1:59pm

    ads are such a pain, I quit TV

    My family and I gave up TV in general back in April, 2007. Mainly due to the cost to watch reruns and stupid commercials, and of course those hateful reality TV shows popping up everywhere. We buy our TV shows on DVDs now and watch them ad-free. I'll tell ya, we don't miss it one bit and for the same cost of cable we get about three new seasons of shows we like per month, without ads!

     

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  15.  
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    Haywood, Oct 30th, 2007 @ 3:26pm

    Re: Ad Skipping

    "After the 82nd time I've seen it, it's lost whatever marginal charm it may once have had."

    You've hit the nail on the head!!
    How can advertisers be so dense that they don't get this. Some ads are 1 timers, some are good for 3 views, I've yet to see one I could watch continuously, but some nights it seems like that is exactly what is going on. I don't have it quite worked out yet, but I have a media center PC with DVR, once that gets worked out, bye bye commercials, and they bring it on themselves. I actually enjoy a good commercial, once, and a great one perhaps mor than once, but 7 time per night, I wouldn't buy it if I needed it and wanted it.

     

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  16.  

    Better Target Marketing

    The better targeted ad I receive, the better my chances of checking it out further. They will continue to fine tune the process to the point that everything you will see be relevant to you.

     

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  17.  
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    Max Hardcore, Oct 30th, 2007 @ 4:55pm

    Unlikely

    Search is a special case where the user is searching for information, and the ad had certain relevancy attributes (an advertiser is willing to pay to put it in there) that tend to merit it's place among the otherwise superior organic listings.

    TV and movies, maybe you could argue that you could integrate product placement more, but you simply can't provide as relevant of ads to as receptive an audience. Since the audience is passively consuming typically some extended storyline which the ads can't help but disrupt.

    WRONG!

     

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  18.  
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    Michael Schmitt, Oct 30th, 2007 @ 5:35pm

    Let me tell you the type of ad I want...

    I like abc.com to help me play catch-up on my favorite ABC shows. The only problem is I have to watch a Dove commercial or some Brita commercial in order to see the show. I'm on the internet, so why can't get fill out a profile and have the ads be dynamically changed to match my profile as I am watching things on ABC?
    I suppose it would take a bit of infrastructure to be able to pull all those 30 second commercials into one place in order for the commercial that is tailored for me to be streamed to my computer at the right time... oh wait... that's what YouTube is for...
    Figure it out guys! I WANT to get some information and a bit of entertainment when I'm watching TV. You don't have to broadcast and hope you get the right people in your audience. You can have your audience TELL YOU what they want and you can deliver in real time!
    *sigh*

     

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  19.  
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    dualboot, Oct 30th, 2007 @ 5:43pm

    I'm a skipper... but still...

    When I installed Weatherbug I got to setup preferences for the types of products that would be advertised in the side bar. If I could do the same on my Replay TV, I would stop clicking past commercials.

    Also, when clicking through right now, I wait about 1 second between each click. If it looks interesting or relevant, I actually skip back to watch the commercial. For instance, I'm in the market for a car, so I still watch car commercials.

    Finally, If there were more good commercials, I wouldn't skip as much... which is why this sport non-lover records Super Bowl... there are usually great commercials for that one day that I want to see. Just some thoughts from a commercial skipper.

     

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  20.  
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    Twinrova, Oct 31st, 2007 @ 4:27am

    Ads should die, not be revamped

    Treating ads as content isn't going to help the industry no matter what. With today's technology and "expensive" programming, if ads are the way to recoup revenue expenses, we're all boned.

    Web ads:
    It's a known fact that people are "stupid" when it comes to the internet. If it's a link, it's going to be clicked regardless if it's an ad or not. The average web surfer still has no clue how web pages work and, more importantly, hasn't grasped the concept of the difference between a content link and ad link.

    And since this article states ads should be more like content, this will only add to the confusion to help people know the difference.

    TV ads:
    Has anyone here at TechDirt noticed the loss of the "2 minute" ad window? These things have grown to as much as 4 minutes and people just don't seem to care.

    Oh, wait. Actually, they do care but there's nothing they can do about it. DVR usage is increasing as people are beginning to learn that these sweet devices can actually allow a user to fast forward past ads.

    And "studies" indicating people will watch ads seem to contradict other "studies" that show ~90% of DVR users skip ads (I'm definitely one of them).

    Turning ads into content is a useless strategy because it's doomed to fail when people bore of the change and thus, return to the habit of trying to bypass them.

    A new feature of ads seems to be taking visual media by storm, and that's product placement. Eidos is a gaming studio that is incorporating in-game ads which doesn't seem to be irritating the gaming market.

    People are complaining about TV ads because of the number of them, and it doesn't matter if they're "enjoyable" or not. Who here can watch the same ad 10+ times per week?

    The ad system of this country is poorly designed and maintained and I have to disagree that turning them into content will make a difference.

    Because once Corporate America gets its hands on it, "content ads" will be destroyed very quickly leading to yet another topic for TechDirt to discuss in the future.

    Enjoy your Halloween.

     

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