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> if you could combine a streaming TV service with Netflix-like penetration using FB login and FB ad targeting, I'd wager you could make more in ad revenue usin

by mason55 12y ago

> if you could combine a streaming TV service with Netflix-like penetration using FB login and FB ad targeting, I'd wager you could make more in ad revenue using only a small fraction of airtime than traditional TV. IE 10 second "preroll" ads, unobtrusive banner ads (on pause, buffer, etc) with FB's targeting would earn more per viewer than traditional TV's. It's coming. The next wave in advertising will be ad targeting based on addressable set top boxes, which basically means targeted video ads on TV. Advertisers will be able to do things like "make sure each household sees my ad five times" to avoid cases where people who watch lots of TV see it twenty times and people who don't watch much only see it once. With addressable STB's + microtargeting there will be a whole new set of companies for which it will be profitable to advertise on TV. Right now the long tail of niche companies has no chance of profitably advertising on TV because their target only makes up a very, very, very small percentage of an individual program (think about a company advertising Bitcoin ASIC's for example). But if they get addressability + microtargeting right then they can make sure that only households which are interested in Bitcoin ASIC's see the ads. https://www.experian.com/assets/marketing-services/white-papers/audience-iq-addressable-tv-wp.pdf https://www.experian.com/assets/marketing-services/white-pap...

netcan 12y ago
Plugging into FB's user identification gives you way more than just location. Targeting and performance/conversion tracking. To give you an example, imagine you own a gym and you are recruiting members. I think with a really well targeted campaign to 1,000 people could yield a 5% signup rate over a month, 50 people. That's a guess, but I think it's not unreasonable. Most gyms would gladly pay $50-$100 per member for that result, so $2,500-$5,000 to target 1,000 people. That means a single SME advertiser could pay half the current price of a netflix subscription for a 1000 . Obviously, those 1,000 people will be targeted by more than one advertiser. Targeting & performance tracking are super enhancers. A significant improvement in either of these can yield 10X improvements in ad performance and similar increases in ad revenue. Scale is very important. So are supporting assets, good data sources and ways of creating links between them. FB already has the best (by far, IMO) platform for creating target groups and one of the best platforms for attribution/performance tracking/conversion tracking. You can upload a list of you gym members and get back an "audience" of their friends, who are 25-40, live in the area… Then you can subdivide it into single women, married women, married men, single men, etc. and try different ads for different people. That's the kind of improvement over TV ads that creates a 1000X increase in value per second of advertising airtime. *Reading back, it seems from my comments that I'm asserting a lot of things fairly confidently. Obviously, this is a lot of speculation and guestimates based on my understanding of the ad economy and my experience as a buyer.
bpyne 12y ago
I dread this scenario and hope an alternative to pay more for television programming is provided. We're down to 45 minutes a day of television right now. Shows consist entirely of Netflix/Amazon Streaming/AppleTV. Forcing ads on us would cause us to drop it all and go back to a movie outing every few weeks. Besides, ads are all over streaming television but they're in the form of product placements within the content. They're more subtle and don't interrupt the flow of what you are watching.
- soylentcola 12y ago
  I think that at least in theory, the idea is akin to what Google did for regular web advertising. Originally before targeting the only real strategy was to blanket sites with every sort of ad imaginable and the only way to stand out was to be more annoying and more flashy. Ad space was worth less so site owners made less money to support their services. People looking for new customers wasted more money because they could only target very broadly based on the topic or general demographic of a website. Then you got Google ads and the like. Since you could target based on someone's general region or search topics or some other demographic info, ads could be more relevant. They didn't need to be flashy and noisy and could sit alongside search results or website contents as plain text or simple images. People trying to attract customers could focus their ad budgets where they were more likely to have a return and site owners could charge more for ad space since it was worth more. I think that in theory, cable and other ways of getting TV-type content could move in much the same direction. Instead of just running more ads and hoping that people watching show (x) will be interested, they could run ads for stuff in your city or things in the categories you're interested in. Higher relevance would mean less total ads for the TV company to make the same profit selling ad space. It would mean less ads for things you'll never be interested in. And it would mean less money wasted by companies advertising on deaf ears. But yeah...while this could happen I'm not really that optimistic. A young Google could take on the old model and replace it but the entrenched TV and cable companies would likely just add it to their arsenal. Instead of fewer, more lucrative targeted ads paying for now-free service, you'll just see the same subscription fees and the same pile of interruptions. Just now they'll be targeted.
  - 12y ago

by mason55 12y ago

netcan 12y ago

Plugging into FB's user identification gives you way more than just location. Targeting and performance/conversion tracking. To give you an example, imagine you own a gym and you are recruiting members. I think with a really well targeted campaign to 1,000 people could yield a 5% signup rate over a month, 50 people. That's a guess, but I think it's not unreasonable. Most gyms would gladly pay $50-$100 per member for that result, so $2,500-$5,000 to target 1,000 people. That means a single SME advertiser could pay half the current price of a netflix subscription for a 1000 . Obviously, those 1,000 people will be targeted by more than one advertiser. Targeting & performance tracking are super enhancers. A significant improvement in either of these can yield 10X improvements in ad performance and similar increases in ad revenue. Scale is very important. So are supporting assets, good data sources and ways of creating links between them. FB already has the best (by far, IMO) platform for creating target groups and one of the best platforms for attribution/performance tracking/conversion tracking. You can upload a list of you gym members and get back an "audience" of their friends, who are 25-40, live in the area… Then you can subdivide it into single women, married women, married men, single men, etc. and try different ads for different people. That's the kind of improvement over TV ads that creates a 1000X increase in value per second of advertising airtime. *Reading back, it seems from my comments that I'm asserting a lot of things fairly confidently. Obviously, this is a lot of speculation and guestimates based on my understanding of the ad economy and my experience as a buyer.

bpyne 12y ago

I dread this scenario and hope an alternative to pay more for television programming is provided. We're down to 45 minutes a day of television right now. Shows consist entirely of Netflix/Amazon Streaming/AppleTV. Forcing ads on us would cause us to drop it all and go back to a movie outing every few weeks. Besides, ads are all over streaming television but they're in the form of product placements within the content. They're more subtle and don't interrupt the flow of what you are watching.

soylentcola 12y ago
I think that at least in theory, the idea is akin to what Google did for regular web advertising. Originally before targeting the only real strategy was to blanket sites with every sort of ad imaginable and the only way to stand out was to be more annoying and more flashy. Ad space was worth less so site owners made less money to support their services. People looking for new customers wasted more money because they could only target very broadly based on the topic or general demographic of a website. Then you got Google ads and the like. Since you could target based on someone's general region or search topics or some other demographic info, ads could be more relevant. They didn't need to be flashy and noisy and could sit alongside search results or website contents as plain text or simple images. People trying to attract customers could focus their ad budgets where they were more likely to have a return and site owners could charge more for ad space since it was worth more. I think that in theory, cable and other ways of getting TV-type content could move in much the same direction. Instead of just running more ads and hoping that people watching show (x) will be interested, they could run ads for stuff in your city or things in the categories you're interested in. Higher relevance would mean less total ads for the TV company to make the same profit selling ad space. It would mean less ads for things you'll never be interested in. And it would mean less money wasted by companies advertising on deaf ears. But yeah...while this could happen I'm not really that optimistic. A young Google could take on the old model and replace it but the entrenched TV and cable companies would likely just add it to their arsenal. Instead of fewer, more lucrative targeted ads paying for now-free service, you'll just see the same subscription fees and the same pile of interruptions. Just now they'll be targeted.
- 12y ago