Friday, July 20, 2012

Simultaneously The Solution and The Problem

For any company who generates revenue from advertising, such as magazines, newspapers, television networks, websites or sports leagues, the answer to all of their budget-crunching problems appears, at least on the surface, to be more ads.  In order to make more money, you must sell more ads.

However, there is a self-defeating side to this under-analyzed equation.  The more ads you sell, the less effective they become.  That's because your client, who is paying for the space, now has more competition for the attention of the audience being delivered.  In turn, the price should drop along with the client's returns.     

Back in December, I wrote about this exact problematic advertising cycle while discussing Facebook's decision to sell advertising in newsfeeds of its users. It also explains why seven months ago, Facebook increased its limit of ads per page from six to seven and now, only seven months later, is testing ten ads per page.

See the trend?

Many advertisers consider sports a holy grail of returns. They garner a lot of attention from desired demographics and with rapid escalating costs, sports teams are also desperate for the money.  So it's no surprise that stadiums and arena's have become cluttered with advertising over the past twenty to twenty-five years.  They even pioneered the practice of selling the name of the building.

So it comes as very little surprise that today, with very little valuable space left to sell, the National Basketball Association announced a tentative plan to sell advertising on team uniforms, thus becoming the first major professional sport to take the plunge for game uniforms.  A "final decision" on uniform advertising is expected to be made in September. 

Although it's being reported slightly differently by some people, the advertisement will be about two square inches and located over the heart on the uniform.

But when you understand that in advertising, more is simultaneously the problem and the solution, then you know better than to believe that.  Instead, it recreates the problem its supposed to solve.

No comments: