A rapidly growing advertising segment: compelling content people flock to watch

A few months ago I wrote a piece about new business models for content, sparked by a fascinating dream I had. In the post I mused:

My dream sparked off many thoughts about content business models, including the evident one of replicating the model in the dream – getting people to pay to skip ads. If you extend this far enough, you get to a model where you can price advertising by how much people are prepared to pay to skip it. Consumers should be able choose how they pay for content – by payment or attention. Ultimately we should be able to move to dynamic content markets, where there is a different cost depending on whose attention you are capturing, and the context in which it is embedded. Perhaps people will pay a lot of money not to have an ad inserted in the middle of a chase scene in a movie, but they will even be prepared to pay to see the ads during the break in the Super Bowl.

Now the model of ads being presented as content is rapidly gaining prominence. People are not quite yet paying to watch the ads, but they’re certainly choosing to watch them. An article in the New York Times titled Now, the Clicking is to Watch the Ads, Not Skip Them and a piece in AdWeek called Ad Portals: Will Viewers Tune In? lay out some of the current and forthcoming offerings:

VeryFunnyAds.com, an online version of a TBS show, is predicted to have reached 75 million viewers in its first year. The ads are mainly 30 second TV commercials.

Honeyshed, from Publicis and Droga5, will be an online space dedicated to branded entertainment.

Didja.com (as in ‘didja like it?’) is due to be launched in early 2008 by NBC Universal will feature outstanding TV commercials, as well as other branded content.

AdPerk is an advertising network for opt-in viewers who choose to watch ads and branded network (this model pays people with magazines for watching content, but has a similar intent, says Gregg Hano, publisher of Popular Science, which has just launched AdPerk on its site, in a Beet.TV interview )

Techcrunch thinks the stats suggest the trend doesn’t have legs. Paidcontent quotes Joseph Laszlo of Jupiter, who notes that only 8% of people say they chose to watch commercials online. Ryan Stewart, however, hopes that the trend to providing quality entertainment shifts into application software.

There are currently two kinds of TV and video advertising. The majority is crap that people want to avoid, even though it can sometimes be effective at increasing sales. And there is quality content that people will choose to watch. Yet both kinds have been lumbered with the rigid strictures of the 30 second TV commercial. Now that this has been transcended, there is no reason that advertisements shouldn’t become a totally open format. Why not 2 minutes or 10 minutes or even an hour? Stories can be told, people engaged. I don’t doubt that advertisers are going to create more and more compelling content that people choose to watch, particularly once the legacy of thinking in terms of TV advertising starts to fade.