Earlier this month at ad:tech, a digital marketing conference in New York, I had the pleasure of moderating a session on the hot topic of “measurable television”. As a TV executive with a long history of traditional, as well as digital television distribution experience, this was naturally a perspective on advertising’s favorite medium that I was keen to explore.
With a distinguished mix of participants from CBS, TRA, Rentrak and Simulmedia, we endeavored to look beyond the world of plunging Nielsen ratings, and into the world of hyper-measurability afforded by the increasingly accessible data provided by television set-top boxes (STBs).
Yes, yes, I know that broadcast research mavens like Alan Wurtzel of NBC have throttled back their enthusiasm about STBs, and the Coalition for Innovative Media Measurement (CIMM) has clearly communicated all the challenges inherent in making STB data a universal currency for television audience measurement, but I’ve come to realize that not much of that matters. As a good friend of mine used to always say, “reality has a funny way of marching on in the background.”
While most seasoned media executives agree that Nielsen data will remain the common currency for television planning, buying, selling and posting, it’s clear that available, flexible and affordable STB data will continue to “leak” into the media conversation at the CPM level (the specific dollar value of a commercial spot within a rated program or time period based on thousands of people watching). For buyers, detailed audience profile data beyond square peg demographic categories, such as “Men 18-49”, will better inform where and how to spend their budgets. For networks, a better grasp of the true value of their audience will help justify the CPM rates they want to charge buyers.
A Closer Look
At the local level, Rentrak is making short work of signing up station groups (including network affiliates), to provide vital audience measurement data to stations whose audience numbers have either been misrepresented by Nielsen, or don’t show up at all – and for a fraction of the price of a Nielsen contract. TRA is matching specific household purchases with the ads those same households actually see, providing the long awaited closed-loop control environment that allows advertisers to accurately measure the efficacy of their television ad spending against sales. TRA has had so much success with this type of TV ROI measurement that they are now even adding an index column alongside the Nielsen data within their clients’ own media plans, reflecting the concentration of impressions within the types of purchasers that are responding to a campaign. Simulmedia has gotten so sophisticated with their ability to extrapolate and articulate viewer profile data from set-top boxes (ex: “aspirational chefs”, “rugged reality watchers”, “Sci-Fi lovers”) that they can essentially separate people from shows, allowing advertisers and program suppliers the ability to more accurately, and freely, find the viewers who are most likely to respond to a specific product or show - wherever they might be. And since the tools to mine the insights gleaned from these data sets are still relatively new, Simulmedia is continually turning undervalued ad inventory into TV marketing gold for its clients.
The Big Picture
Despite these exciting and very real examples of STB value, there is a still a large contingent (many, not surprisingly, with a vested interest in maintaining the status quo) who view these advances in TV audience measurement as quaint, or experimental at best, with little or no application at the national broadcast level. However, this will begin to change for buyers of regional “spot” inventory, where increasingly available location based audience profile data will start chipping away at the otherwise static, 12 month, big brand buying cycles. Additionally, the so-called “scatter” market, already gaining ground in today’s fast paced, opportunity driven media landscape, will also become more dynamic as buyers see the benefits of moving beyond broadcast demographic categories for the more detailed, profile driven data afforded by 24/7, second-by-second, STB information.
Leveraging advances in digital technology to improve profits is only too fresh in the minds of many online media millionaires, who witnessed, first-hand, how companies like Advertising.Com, 24/7 RealMedia, DoubleClick and Tacoda were able to turn million dollar companies into billion dollar businesses. They did so simply by allowing the intelligence captured from a dynamic and measurable real-time media ecosystem (read: ad networks) to continually perfect the “targetability” of advertisers’ campaigns and creative executions. Sure, :30 second TV spots - which take weeks to budget, shoot, approve and air - are nowhere near as nimble as banner ads, but TV spots can enjoy the web-like targetability that digital technology is now bestowing upon the television medium, which officially “went digital” over a year ago.
Advertising history has proven that media + technology = greater effective reach. Historically reach has been synonymous with mass, a la “bigger is better”. But today, in a world of too much reach (noise), effective reach is synonymous with ROI, and ROI requires access and insights beyond the blunt industrial age tools of reach, frequency, and gross rating points. While these universal tools will continue to facilitate the transactional aspects of the television economy - ensuring Nielsen’s common currency status as “uber metric” for the buying and selling of TV ad inventory – the quiet storm of television set-top box data will continue to infiltrate all levels of the television industry.
Conclusion
Apart from the timing, semantics, nuances and debate surrounding the application and value of set-top box data, our session in New York made it clear that the mighty vertical of television, seemingly immune from the effects of digitization that have transformed so many other industries and business models, is about to change. At first this change will be slow. Then, through blogs (like this one), social networks, industry conferences, newsletters and white papers, advertisers will start hearing how their competitors are reaping huge rewards through improved television spending. Agencies, always concerned about keeping their accounts – and maintaining the lucrative margins still associated with servicing television ad spending - will begin to invest in new resources to help them stay on top of the new advances in “smart TV”.
Small and mid size program suppliers, whose inability to afford having their shows Nielsen rated (and thereby foregoing their ability to tap big brand TV budgets) will instead be rewarded for delivering premium narrowcast audiences with dollars that would have otherwise been routinely wasted on buck-shot, broadcast media buys. Sure, it will be a different world; one that’s almost hard to imagine. But it’s coming, right to our doorstep, whether we’re ready or not.
Dave Hutchinson is a media executive in Los Angeles and can be reached at hutch@ppi.tv