Why is Madison Avenue quaking in its boots about Spot Runner?

Because of an itch one gets when looking at Spot Runner and then switching over to YouTube.com, then over to istockphoto.com. Then back and forth. This idea was first hinted at by Umair Haque at bubblegeneration.

With me? No?
Stay with me then.

A full explanation of Spot runner and its services will be followed by a prediction that should turn the television industry on its head.

Upending TV’s business model isn’t brain surgery in this day of the TV spot’s increasing irrelevance, but it is a very welcome addition to what we here at idfive have termed Advertising 3.0. (I had to put in a plug, mea culpa!)

It is worth repeating before beginning: TV is a big fat waste of your advertising dollars.

Let me explain.
From the buyer’s perspective, TV advertising hasn’t always been a pleasant or productive experience. Tons of money, a great deal of time and energy goes into a 30 second spot with little or no proof of its statistical relevance or impact.

In effect, your company must be large enough to sustain a financial loss in the blind hope of a win. TV advertising is little more than gambling. Because current TV technology makes it impossible to track who is watching what with any specificity, you are just hoping that revenues will increase enough to cover the cost. (And hope, as we remind ourselves around the office, isn’t a strategy.)

So ok, you say, TV is a waste, what’s to be done?
Well you could certainly migrate to online advertising, which is what we recommend. But if you want to stick with something that has no real metrics, then what Spot Runner has done is make TV slightly LESS of a waste by decreasing the costs substantially and making the whole shebang hyper-efficient. That is to say… cheaper.

Spot Runner’s hyper-efficiency is worthy of note.
The vast majority of advertisers in the United States (let alone the world) have a total annual budget of less than $20,000 a year. But there are SO MANY of them. This is the long tail on the purchasing side. Every small business has a good 5k to throw at TV advertising, right?

Spot Runner has targeted that market with their services.

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How Spot Runner works

Imagine you are a small web designer who gets a hankering to do some advertising for yourself.

You ignorantly remember that some people still watch TV, so you go to Spot Runner and select a tv ad template.

1. Select an Ad
You go to the ads “select menu’ and choose your general industry (arts and entertainment), you specify further (visual arts) and still further (commercial and graphic arts) – and lo and behold you have narrowed the selection down to one template:
http://www.spotrunner.com/advertiser/ads/select/detail/?id=ATWK

My ad is only $499 if I buy it today! COOL!

They offer some nifty other necessities: I can assure its exclusivity in my market, meaning my competitor down the street won’t have access to the same template. Also, this specific spot is only in English, but others are in Spanish.

2. Personalize it
That’s right, there is an online form that allows you to submit personalized changes to your ad. Then, 48 hours later, your ad magically appears in your inbox, all ready for your approval. What could be cookie-cutter-better?

3.Media Buying / Scheduling
If you want the simple and easy method, (and at this point in my blogwriting, I do) then choose a campaign package.

http://www.spotrunner.com/packages/?adcode=ATWK

Because this is extremely localized, I chose Northern Baltimore County as my region.
I get a starter package for $2,170 for the first 4 weeks, with every continued 4 week period thereafter only being $1600.

Here is what they are offering me: I chose these demographics because my best bet is that teens, senior citizens and toddlers aren’t buying graphic design all that much – I could be wrong, but who cares, it is all SO cheap:
Men, 25-34
Men, 35-49
Men, 50-54
Women, 25-34
Women, 35-49
Women, 50-54

Here is the description of the campaign package I chose:

This package is ideal for first time Spot Runner users or businesses with a limited budget. You'll get access to all of our professional quality commercials, and you'll purchase an ad, a television schedule, and expert assistance from our team all together, with a simple process. This is a great way to explore our service, test a new market, or stay thrifty and still have a fantastic ad on TV!

1) Expert ConsultationOne of our Express Launch representatives will schedule a telephone consultation with you to help you choose an effective ad for your business, personalize your ad, and answer any questions you may have about television advertising.

2) One personalized ad.Each of our ads is created to allow you to insert information that's specific to your business. We'll personalize your ad by including graphic elements like your logo or your telephone number and web address written on screen. In some of our ads, you can even send us a photograph of products, or storefronts.

3) Ongoing 4 week TV schedule.We'll choose the best networks and timeslots to most effectively reach your customers. Your airtime schedule will run in 4 weeks cycles. This means you'll be charged $2,170 initially for your ad, airtime, and expert consultation.

At the end of your initial 4 week campaign, Spot Runner will continue to book airtime for you at a rate of $1,600 for 4 weeks. You will have an opportunity to review your airtime schedule prior to each purchase. Actual Price may vary slightly due to shifts in market availability and pricing.

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And there are more refined tools for scheduling when you want your spot to air, so that it doesn’t get slotted into the highly desirable 2 am - 3 am hour. The available networks are exciting, and all in all on the surface it looks like you have a lot of options.

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So what is the damage? Not bad! I have put out almost no effort, and I am $2669 poorer for the first 4 weeks, and $1600 poorer for every 4 week period after that. We are looking at slightly over $20,000 for a YEAR of TV advertising! Most advertising agencies would charge twice that just to do a horrible ad, not including the media buying and scheduling. You’ve managed to do a somewhat ok, if generic, ad for MUCH MUCH less.

But as I said in the opening of this blog, it is still a waste. No one is going to assure you that your money isn’t better invested in a guaranteed cd making 4%. It is a bet. A gamble. And maybe worth it if you can afford to lose the cash. The basis for all the arguments against TV advertising are still as substantive and still as cogent as they ever were, the potential damage is just minimized as the costs have been reduced.

Spot runner has taken the low-end market by storm, sure, but why does this make Madison Avenue tremble?

Because YouTube and google video is a hell of a lot more exciting than anything the advertising community has ever come up with. All that is needed is a button, maybe even a small one, that says: “Click here to turn this video into a television ad for your company”.

The sweet spot is in the massive influx of talent we are seeing on youtube mixed up with the hyper-efficient Spot Runner model. You can see it at work on istockphoto – a million amateurs are uploading their work and making money (credits, sorry) off of their truly fantastic work. Everyone is better off and the only people who suffer, sadly, are the professional high end photographers (i.e., in my analogy, Madison Avenue).

Labels: Old Media Deathwatch