Cutting to the Chase on Set Top Box Data - Bill Harvey - MediaBizBloggers

It seems everybody is talking about Set Top Box STB data nowadays Last week Nielsen put out not one but two articles focusing on STB both in MediaPostManish Bhatia who runs Nielsen39s STB program pointed to the fact that if STB data were used today as the measure of audience size cable networks would inherit an extra 31 billion a year in ad revenues while broadcast networks would lose 11 billion he did not spell out where the other 2 billion going to cable would come fromEd DeNicola whom MediaPost indicates gives quotSTB 101 presentations to media companies and advertisersquot talks about how STB research quotis difficultquot and quothard to calculatequot and calls for a quotmore open dialogquot Those of us who have been chopping the first path bringing ARF standards to STB for over ten years are tempted to feel the sin of pride at that It sure was hard at first Now when somebody talks to me about 39more open dialog39 I hear the words 39let me pick your brains39A researcher with broad and deep industry experience responded by sending me a note quotThere is something for your next bloghow to keep the industry from progressing If the industry can39t work their way through these issues then they may as well fold up and go homeamp8230this is like not moving from LPs to DVDs because you have to buy new equipment amp8211 or not moving from Sami Warehouse Withdrawal data to store level POS because it is not censusamp8230these types of mindsets make me crazyquotFrankly there is nothing in the two Nielsen articles that I have not been saying myself for over ten years It is perhaps the way these things get said that cause confusion in the marketplace So I decided to address the Nielsen articles in my blog not by way of refutation or complaint but simply to keep minds clear as we all approach a future that will be increasingly heavily based on STBIn a 2002 ESOMARARF paper with Tony Jarvis and Russ Booth entitled quotBetter Television Audience Measurement Through Cable and Satellite Set Top Boxesquot we wrote under a subhead called quotUniversequot in a section devoted to the challenges of STB quotAll TV audience measurement is imperfect and the real question is which set of methods is least imperfect The authors suggest that the use of set top box data with the appropriate edit rules adjustment factors and demographic questionnaires in conjunction with a method for attaching people data offers the least imperfect method available largely because of the sample size and secondbysecond measurement aspectsquotNielsen itself acknowledges that the same flaws it continuously cites regarding STB can be dealt with by means of processing adjustments as Manish says in his article quotWe view settop box data as an extremely valuable source of information that once adjusted for inaccuracies and gaps can provide deeper insights on TV viewing advertising delivery and effectivenessquot Italics addedManish39s dramatic point about the shifting of billions of dollars stems from the fact that cable including ATampampT and Verizon and satellite digital set top boxes DSTBs are the only means by which Nielsen TNS and Rentrak get their STB data DSTB homes also by definition all get hundreds of channels most of which are cable channels The broadcast shares in these homes are lower than broadcast shares in basic cable homes and much lower than broadcast shares in overtheair OTA homes Hence if these cablesatellite DSTB homes were to be used as the audience size measure audiences and dollars would shift from broadcast to cable just as Manish saysBy contrast TRA and TiVo differ from Nielsen TNS and Rentrak in that TRA and TiVo measure all types of homes including those that do not have cablesatellite DSTBs and therefore do not receive hundreds of channels In addition to measuring hundreds of thousands of DSTB homes the ones that receive hundreds of channels TRA for example measures hundreds of thousands of basic cable homes that generally receive fewer than 100 channels and has more OTA homes that receive a handful of channels than the entire Nielsen national sample size But that is not the main point which is as followsThe articles ignore the differences between TRA and all other companies in the ways in which STB data are used This would perhaps not be worth mentioning except that Joe Mandese identifies TRA at the end of Manish39s article along with TNS as two companies that have already learned how to process STB and are commercializing STB data in the marketplaceThere is a difference between the way TRA uses STB and the way everyone else has been using it It is important to recognize that profound difference because nothing said in either Nielsen article has any bearing whatsoever on the way TRA uses STB data todayTRA does not use STB data as a measure of audience size although our system certainly allows the user to do so if desired The shifts of vast amounts of money to cable away from broadcast that Manish says would occur if STB were the size currency do not occur with TRA TRA assumes that its users see my prior blog posting for example are using Nielsen for audience size measures What TRA measures is the probability that the audience reached by a given program is the right viewer aka purchaser set that the brand ought to be targeting for maximum ROI We are measuring composition within the audience not the absolute audience size We consider this a valuable use of STB data that can be made today with none of the downside consequences Nielsen points out for leveraging STB for audience sizesPeeling the onion a little farther for those who have not read the prior blog posting Today39s planningbuying practice is to crossanalyze two variables cost and the number of average minute viewers in a sexage group TRA39s recommendation is to add a third number that gets weighted into the value rankings of TV programs for a given brand The third number is the likelihood that these viewers are actually the kinds of viewers aka purchasers the brand wants to reachBecause networks price inventory based on number of 1849 or 2554 viewers the index of value equation comes out where all TV programs are very close together in value Cost Per Thousand viewers TRA39s purchaser likelihood weighted CPM suddenly shows huge differences in real value to the brand across TV program options and opens up the ability to increase the ROIproducing power of the same TV budgetFor example let39s say there are two programs Program A and Program B and they each have an average audience of 1 million viewers who are W2554 Let39s say one costs a little more than the other so that Program A has a CPM W2554 of 20 and program B39s corresponding CPM is 22 The practices of the last half century say pick Program ANow what if you had a way of analyzing what these audiences buy and found that the type of purchasers you want to reach are 30 of Program B39s audience and 20 of Program A39s audience Then weighted by this highly relevant measure of value and predictor of ROI Program B would have a purchaserweighted CPM of 7333 and for Program A the corresponding CPM would be 10000 Now we can see that Program B is the better choice That is the way its customers are using TRA today plus post evaluation of ROI by subsets of total TV that offer planning strategytactical options different creative brand integration of various types program types frequency levels recency related analytics and much moreSince it is not aimed at being a measure of audience size TRA steps aside from the fray churned up by the Nielsen articles That is a debate among those using STB to replace Nielsen39s current methods todayAs a final note we would be remiss if we did not mention that the overall correlation between TRA STB data and Nielsen is close to 9 This is a result of TRA weightingprojection edit rules and the overall processing algorithm regime we have learned over the past ten years and exclusively licensed to TRA to address the challenges that others are just beginning to face right nowBill Harvey has spent over 35 years leading the way in the area of media research with special emphasis on the New Media Bill can be contacted at billtraglobalcomRead all Billamp8217s MediaBizBloggers commentaries at Bill Harvey MediaBizBloggers

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Cutting to the Chase on Set Top Box Data - Bill Harvey - MediaBizBloggers

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