A New Way To Buy Advertising

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?