Magazine article Variety

The New Metric System

Magazine article Variety

The New Metric System

Article excerpt

Marketers add high-tech tools to better target TV ads

Anyone who's worked in the ad business recognizes the adage, often attributed to 19th century department store pioneer John Wanamaker: "I know that half of my advertising budget is wasted, but I'm not sure which half."

This dilemma has bedeviled marketers for more than a century. But now, with the emergence of better audience-measurement toojs, it's finally becoming possible to streamline ad budgets. For TV advertising, this means taking advantage of new metrics gleaned via such diverse tools as set-top boxes, social-network websites and point-of-purchase consumer loyalty cards, and adding them to traditional audience-measuring information to determine values such as return on investment, program engagement, audience attentiveness and program "stickiness."

TVs six-decades-old tool for valuing ads - Nielsen's estimates of audience size and demographic composition - still remains the industry's core currency. But the new metrics are bound to have major consequences for all ad-supported content in a TV ad biz valued at $59 billion per year in the U.S.

Audience measurement services are so popular that several players are now putting lots of coin in the field. Dow Jones VentureSource says that investors poured $1.05 billion in startup U.S. advertising/marketing ventures of all kinds in the first three quarters of 2011, after $1.25 billion in 2010. TRAs first lead investor in 2007 was venture capital firm Kodiak Venture Partners.

Giant agency holding company Interpublic Group's forecasting unit, MagnaGlobal, uses what it calls the Magna Value Index, a proprietary measure of audience attentiveness to TV.

"Everything we know helps us with our negotiations in purchasing TV time," says MagnaGlobal managing director Brian Monahan.

In a sign of how the results of new metrics can diverge from traditional ones, no TV show landed on both Nielsen's top-10 list of broadcast primetime shows and on Nielsen's top-10 viewer engagement metric (see chart). Two runs of Fox's "American Idol" top Nielsen's traditional ratings, while NBC's "Grimm" is the first of the top 10 shows by engagement, which can be defined as the degree of involvement that viewers have in TV programs.

In 2008, ad buyer Publicis Groupe's Optimedia launched its first-generation Content Power Ratings, which measures delivery of TV programs to auds across multiple platforms, including online, mobile devices and TV. "The latest version of Content Power Ratings aggregates 17 data streams, including those from Nielsen, comScore and Google Trends," says Greg Kahn, Optimedia exec VP and business development director. "It also tracks Facebook 'likes,' Twitalyzer and Klout."

Such proprietary metrics are often referred to as "secret sauce," and the media industry can buy off-the-shelf alternative measurement data from various syndicated research providers. For example, TRA (whose initials stand for The Right Audience) licenses viewing data culled from TV set-top boxes in 2.2 million households with 3 million TV sets, which it combines with supermarket shopping data from 60 million consumers swiping loyalty cards at checkout.

TRA says it can match purchase and viewing data to the same home, though information is not personally identifiable in order to maintain privacy. "TRAs return-on-investment metric quantifies the impact of commercials on consumer purchasing behavior," says TRA CEO Mark Lieberman. …

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