You Can Play to the Method in the Ratings Game and the Branding Game, but Not in the ROI Game -- Bill Harvey

Decades ago a broadcaster mentor said to me, “Reality? What do I care about reality? All I care about is affecting the Nielsen panel!”

In the ‘80s I was using automated celebrity-voice interactive phone calls to raise ratings. One of the large broadcast stations in New York was skeptical that 250,000 completes in New York would be enough to affect the Nielsen panel — theoretically they could all fall outside the Nielsen panel and lift ratings there but not in the Nielsen panel. The station decided to try it for a new show that was falling short of expectations, saying it was worth it to try anything to save the show. We did the 250,000 automated calls. The ratings in Nielsen (and Arbitron) went from 4.0 to 8.5 during the promotion then afterward settled back over time to a sustained 6.0.

Just the other day I heard a similar remark from a digital network seller, saying all she cares about is affecting the comScore numbers. The ratings game is still the dominant mindset in the seller and agency worlds.

For many recent years, two other games have become important to advertisers, one being the IAG-type Branding Game (or Millward Brown, or any of a number of other tracking study suppliers). The other is the Marketing Mix Modeling (MMM) Game. Agencies over time came to realize that MMM was their new report card and very recently the TV and digital sellers became sensitized to the importance of the MMM Game as the new order of things.

MMM could still be gamed of course. One could play to the method by maximizing GRPs at the expense of real sales impact by simply buying the lowest CPMs regardless of targeting or environment considerations. Some in fact did act this way.

Led by TiVo Research (formerly known as TRA) along came the singlesource ROI Game, reaching broad advertiser awareness over the last six years. Because singlesource provided faster ROI feedback and correlated with MMM, one was able to get these ROI metrics back while the memory of the period was still fresh. If the singlesource said there were sales lifts but in fact the marketer looking at the latter results was sufficiently cross-silo-seeing, he or she could run these results up against factory shipment data and/or financial records and potentially could see that there were no sales lifts. I gave this the name “Bank Account Validation.”

Fortunately TiVo Research was quickly bank-account-validated by major advertisers willing to co-write papers about it for ARF conferences. Singlesource conducted by the TiVo Research “Naturally Occurring Data (NOD)” method (massive samples, invisible/passive data collection — with no fusion — and with weighting to the U.S. Census) is highly aligned with bank account changes. This was the first evaluator framework that could not be gamed. There was no longer any “method” to “play to” — NOD is in essence the same type of monetary data as in the bank account records.

As the media and agencies catch up to the full implications of this revolution — the advertisers having already shifted most of the weight of their marketing decisions to MMM and putting more and more tentative secondary weight on NOD all the time — all advertising will become more and more like direct response in terms of its evaluative framework.

One radical difference is that sellers will more fully recognize that they have a vested interest in the advertiser’s sales success. No longer is it “not their job” to be concerned that the creative is going to work. They are not there just to deliver an audience. Over time, if they deliver an audience that does not buy this advertiser’s product, that media channel is going to be dropped from the advertiser’s schedules.

Today we are still a few years away from that situation being the widespread state of the art in TV. Even some of the most assiduous users of NOD in TV are scratching the surface with changes in brand allocations of upfront packages, cautious buying changes, reconsiderations of the target audience, plans to soon investigate frequency and creative, but they are hardly thinking of vehicle-by-vehicle or even network-by-network final determinations of sales effect.

Meanwhile, in digital, the revolution is further along, with conversion having long since occluded the phantom click-through yardstick and real-time reoptimization down to the vehicle and cookie level being materialized by the best-of-breed players.

The 2014/15 broadcast season could be the watershed year when addressable TV commercials finally grow up with sufficient avails in the tipping point 30% of U.S. homes. This means that perspective has to be in everyone’s strategic thinking during this next upfront.

With addressability across four screens at the tipping point to saturation penetration, the ROI Model of Effectiveness, with Bank Account Validation, will swiftly become the way of the world.

Data validated by Bank Account will have a measurable value in the ROI equation. If people at the verge of buying a new car can be directly matched to a buyable addressable impression — with delay to airing under 24 hours from decision click on the buying platform — those data could be worth an incremental $100,000 on the CPM, i.e. $100 per impression just for the data.

The more a research data supplier is confident of its Bank Account Validation, the more interested it should be in pricing based on being packaged into the media cost, reducing the decision about its price to a ROI analysis with vs. without said data. This is something that can be tested very quickly in the addressable fast-to-air four-screen future we are moving swiftly into in the next 18 months.

This new era will not be kind to methods that worked well during the era of “Games That Could Be Gamed” such as the Ratings Game and the Branding Game. We predict that the use of fusion will be strongly moderated in the coming era, because it will be shown to have lower Bank Account Validation and therefore be paid a lesser hike on the CPM.

PS — Top copywriter and genius Ed Ney of Y&R fame has moved on to the next classroom. Read his speeches and yours will be even better than they’ve been. Like Erwin Ephron, Ed used short pithy memorable sentences packed with meaning and impact, condensed intelligence and insight. Much to unpack. Rhythmic to the mind. Ed had been a reader of this blog. Treasured like all of you. So long, Ed, see ya. Somewhere, somewhen down the long and winding.

Bill Harvey is a well-known media researcher and inventor who co-founded TRA, Inc. and is itsStrategic Advisor. His nonprofit Human Effectiveness Institute runs his weekly blog on consciousness optimization. Bill can be contacted at bill@billharveyconsulting.com

Read all Bill’s MediaBizBloggers commentaries at In Terms of ROI.

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