Improving the quality of ads: making advertisers feel the pain

Advertisers feel their pain (and pleasure) in sales. They have to - that's the way they're judged. Hence, the entertainment value of the ad is of secondary importance to them. Obviously, all things being equal, they should rather choose an entertaining ad over an odious piece of advertis vomitis.

But, marketing is not always a science, and 'all things' is a theoretical concept - so we are seldom afforded this choice.

The lack of quality, or watchability, of an ad carries no quantifiable cost to the client. But what if it did? What if they were to feel the pain of a bad ad? What if they were to feel the humiliation as you sit in your living room with your friends feigning a heart attack, in preference to dealing with the question: "Did you make that?"

Nalebuff and Ayres (2004) propose an interesting adjustment to the market dynamics in media; "Why not charge advertisers based on how many people switch channels during their ad?"

Most industries reward their suppliers for quality product. So why not media?
Why should ads that reduce hopping and grazing not reward the supplier? It's in the media owner's interest to have good content, whether that content is the programme or the commercial.

So, if the ad discourages channel hopping, the client should be rewarded. The media owner depends on viewership for profit, and if your sloppy product reduces that, then you should be penalised. But negative reinforcement makes for poor media-advertiser relations - so why not flip it around and introduce a quality rebate for ads that encourage viewers to stay put?

Instead of feeling the pain of being penalised for a bad ad, the advertiser would be rewarded for a good ad with the pecuniary pleasure that only a rebate can provide.

People need to feel two things to motivate them to behave in a certain way.
Jeremy Bentham, one of the founders of British utilitarianism points them out: "Nature has placed mankind under the government of two sovereign masters, pain and pleasure..."

Barry Nalebuff and Ian Ayres (2004): Why Not? How to use everyday ingenuity to solve problems big and small, Harvard Business School Press.