Consumer Trust: The New CPM

There has been a lot of ink spilled lately that continues to paint a grim picture for traditional, mass market advertisers.  Most troubling for some is the continued pressure on traditional metrics of accountability, such as CPM (cost-per-thousand viewers).  (Last week I posted some thoughts on how rating services such as Arbitron are scrambling to develop more reliable measures of exposure in an increasingly fragmented media environment...  An exercise I continue to believe is  misguided).

In Bob Garfield's AdAge.com piece, "Chaos Scenario," he explains that the cost for reaching 1,000 households has jumped from $7.64 in 1994, to $19.85 in 2004.  At the same time, the proliferation of time-shifting devices -such as TiVo - which are now used by eight percent of American households - will grow to 40% by 2009.  Of this group of television viewers, 70% currently skip advertisements.  According to an Accenture study reported in AdAge.com, this is projected to translate into a $27 billion loss in ad revenues over the next five years.

Garfield sums it up the emerging adscape nicely: 

Fragmentation, the bane of network TV and mass marketers everywhere, will become the Holy Grail, the opportunity to reach -- and have a conversation with -- small clusters of consumers who are consuming not what is force-fed them, but exactly what they want. Producers and broadcasters capitalized with billions of dollars will be on approximately equal footing with podcasters and video bloggers capitalized with $399.99 12 -months same-as-cash from Best Buy.

While fragmentation provides new conduit for target marketing, applying old injection-theory tactics will continue to fail unless there's widespread adoption of marketing communications based on trust, transparency, and relationship-building. Within the context of recommender engines, search and online communities, marketing wins will be based on word-of-mouth and interpersonal trust, not impressions or exposures.  Therefore, value will need to be   based on metrics related to credibility and trustworthiness, instead of eyeballs.