Media Currency Devalution -- Steve Grubbs

Analytics, Audience Targeting, First, Second & Third party data, Set-top box data, Data Mining, Big Data… there are a huge number of companies providing these services for the TV and digital ecosystems and new entrants every few weeks. They are supported by marketers, agencies and media companies with the goal of divining in-depth consumer and media insights. It's all laudable. We are moving ever closer to validating the delivery of the right ad message to the right viewer at the right time.

It occurs to me, though, that with all the technology, research and measurement innovation, sometimes we overlook the obvious. The TV impression, one of the two components which comprise our basic media currency (CPM), is still defined and quantified by the TV ecosystem in the same manner as it was 40-50 years ago. Yet, it's pretty obvious that it, too, has undergone a significant transformation. Today's TV impression certainly doesn't make the same impression on the viewer that it once did, and that devalues our media currency.

Simply put, the contract between TV network and advertiser guarantees the network shall deliver a client's commercial within a designated program at a designated price, and the audience for that show shall have the opportunity to viewthat ad. Whether viewers actually watch the ad or it registers with them or it engages them is hard to judge, but it is still reported by Nielsen, Rentrak and other as a media impression. At a very basic level, should an opportunity to view a commercial still be the gold standard upon which we base our media currency?

For years the TV business didn't differentiated between opportunity to view and actual viewers because the measurement technologies did not allow for it. But, in the 60's and '70's, you could almost equate the two. Maybe someone missed a commercial if they left the room. Channel surfing wasn't significant, because there were less than a dozen channels available to a household (less in smaller markets). So, media buyers accepted opportunity to view, because there was a very good likelihood that people were viewing if Nielsen reported it.

Fast forward to 2015… our remote controls are now frequently used as commercial avoidance devices. We have commercial breaks in one-hour shows that are now longer than the entire commercial load for a one-hour primetime show in the 60's – 80's. (The NAB code, which placed limits on TV network commercial loads, was abolished in 1986).

Furthermore, we now have, on average, 1-2 other technology devices in our hands when watching TV. We have multi-tasking moms and millennials. We have an epidemic of "distracted" viewers, who are focused on other tasks during commercial breaks…. not the commercials themselves. Frankly, we have so over-commercialized the TV entertainment experience, that we have conditioned the viewer to mentally or physically tune-out commercial breaks.

So, many viewers today are declining their opportunity to viewcommercials. This doesn't show up in the Nielsen ratings and it is not reflected in TV buying decisions. Minute by minute or second by second audience measurement is an improvement, but it only reduces the magnitude of the problem. Looking at it another way, the value of our industry's currency has been greatly devalued without notice or much objection. We put the pot of water with the frog in it on the stove in the 1980's, then turned up the heat and now it's boiling.

This is where the digital media should have a huge advantage over traditional media. They have the capacity to determine which people are viewing their ads and how long they view them. Their challenge is two-fold. Click rates are often miniscule and advertisers and agencies have been reluctant to pay significant cpm premiums for engagement. So, many just choose to default the industry standard impression metric.

Both the TV networks and digital publishers should chart a course to selling "engaged" views and charging a premium for them. Yes, it's an uphill battle to even mention "cpm premium" in today's procurement driven, cost conscious environment. But with all that Massive Data available to us, we should be able to determine the value of an engaged view.It's certainly worth significantly more than an opportunity to view. As there is more consumer adoption of connected TV's, over-the-top boxes and interactive TV ads, certainly the TV folks will be able to measure engaged views.

Opportunity to view , as our industry's currency, suffers further devaluation each year. If John Wannamaker were alive today, he might revise his famed adage, "I know 25% of my advertising is working, I just don't know which 25%.

Steve Grubbs is President and founder of Second Act Media consultancy. Second Act advises mediaand emerging tech companies on how best to monetize their products and services across the advertising ecosystem. Steve can be reached at steve.grubbs@secondactmedia.com.

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