Prediction: Pay-per-spot Advertising

By January 9, 2012 Ads, Items to Ponder No Comments

I predict that all advertising will eventually become a bidding system, or pay-per-spot advertising, similar to Google’s AdWords model.

Implementing a bidding system across all electronic forms of mass communication (that are Internet-connected) and having controls in place, will increase the quality of the ads, the competition for these ad spots, and the effectiveness of the ads. Not to mention, publishers stand to make more money on each spot, which should control the cost to the consumer (print and broadcast subscribers).

Remember how annoying and irrelevant early Internet ads were? Google’s AdWords model increased the quality (they actually score ads based on various criteria and won’t serve “bad” ads), and led to improved targeting, and less-invasive/more-relevant ads.1

I feel the same thing will happen within other media, too…

Almost all newspapers and magazines are offered online (i.e. they have a website). The ads displayed online are either media buys, or auction-based and served through an ad network. Now, these printed publications are being offered through Internet-connected tablets (e.g. the iPad) and ads are placed based on what was in the print version.

However, as these devices become more connected (i.e. Wi-Fi costs decrease, and public bandwidth expands), they can update more often, or even on-the-fly, leading to the ability for advertisements to be streamed from an online source the instant they are accessed.

Streaming ads can be personalized based on you’re location, whether or not you’re traveling (e.g. moving or standing still), the time of day, the weather at your current location, and various other environmental factors that can tailor the ad experience to the user making the ads more effective and increasing competition for these spots.

While ads haven’t really reached this pinnacle of personalization, they do take into account the time of day, the show you’re watching, and if you’re logged in, the person watching the show (i.e. your viewing history, etc.).

Google TV Ads are already based on their AdWords bidding system, and if you watch TV through an online source (e.g. Hulu), you’re already seeing these ads.

Factors that influence the cost are popularity of the show and the dayparts in which you’re trying to advertise, so again environmental factors influence the ads you’re seeing, and advertisers are already bidding on those spots.

I think radio will eventually catch on and do the same as they realize that increasing competition among radio advertisers will promote growth in the industry, and increase the quality and effectiveness of radio advertising (as it has online). Google tried this a couple of years ago, but was unsuccessful (I think it was too soon).

This is just my opinion, so please take it for what it’s worth.

[1]: There are various compliance organizations that protect consumers, ensuring ads are not invasive.

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