The New CTV Challenges of Advertising Metrics
The advertising measurement landscape is like our own universe, constantly expanding and developing. Our once simple staple, the TV, has been a monolith hiding an infinite number of new variations. Then, the big bang of rapid technology innovation enabled the delivery of high-quality video across infinite devices turned the media business upside down. Fragmentation of hardware, software and advertising solutions for the delivery of TV content challenges the race for consumer attention and their wallets. What marketers once thought was complicated: 500 cable/satellite channels, time-shifted content, SVOD and AVOD, now seems relatively simple. Today, viewers can consume an infinite volume of content via a wide variety of mobile and fixed devices, including closed hardware systems such as AppleTV, Chromecast, Firestick, walled content gardens for connected TV (CTV) such as Disney+, Peacock, Hulu, YouTubeTV. All come with a variety of payment options that give the consumer the freedom to select ad-supported or ad-free content depending upon preferences and budgets. This has created challenges for marketers, publishers, advertisers, and agencies seeking access to consistently defined audiences and predictable, measurable performance outcomes.
Historically, tracking consumer engagement with TV content was easily done with Nielsen ratings. Nearly all advertisers, publishers, and agencies collectively agreed that Nielsen’s measurement of audience size and demographics was reliable and representative of the entire TV market. Each party in the ecosystem derived benefits from this tacit understanding. The Nielsen ratings provided media and ad sales teams with the ability to accurately predict revenues - something their CFOs and Wall Street loved. The industry elevated Nielsen’s audience measurements to such a level of utility that it became accepted as the TV industry’s “currency.” Nielsen’s numbers were as good as money.
Expanded delivery methods and fragmented consumer attention have significantly devalued the currency. Consider that the last episode of M*A*S*H aired in 1983 and captured an audience of 106 million - almost every adult in the country at that time. Today, the highest-rated programs in the US attract a mere 20M viewers distributed across CTV and other digital solutions that are not suitable for Nielsen metrics—effectively making that audience only worth half as much (the leakage of linear viewing from cable/sat to CTV).
Since more dispersed audiences are harder to identify, no unified system of measurement able to accurately validate audiences across all types of screens has yet emerged.
This is particularly frustrating to publishers who see the substantial incremental revenue opportunities presented by CTV. As CTV is inherently addressable and IP-based, data available from other IP-based platforms (web and mobile for instance) is now available for CTV advertising. This rich, census-based data allows for more impactful audience segmentation, targeting, personalization, and performance marketing. All of which adds up to more revenue for publishers and improved outcomes for advertisers.
Not surprisingly, the introduction of CTV has ushered in new entrants into the measurement market claiming to be the panacea and jockeying to be the replacement currency. Digitally native companies like VideoAmp, SambaTV, Comscore, and iSpotTV have moved in to fill gaps left by Nielsen, all striving to elevate their CTV measurements to the level of currency or at least “near currency.” And Nielsen isn’t giving up easily, as they work on launching NielsenOne that evolves their methodology to address the newly combined linear and CTV landscape.
Defying classification, leading technology companies have also entered the market, crowding out the former leaders. Google and Hulu are now major distributors of live TV - once the sole domain of cable and satellite operators. Netflix, Apple, and Amazon have become some of the largest and most awarded producers and distributors of scripted content and are edging into live streaming as well. TV (Samsung, LG, etc) and hardware manufacturers (Roku) are selling ads directly on their devices. This is providing advertisers, who traditionally had limited options for connecting direct consumer connections, are able to use CTV as that laser-focused medium.
These developments raise a number of questions related to video metrics, measurement, and currency. The answers to which will permanently impact consumers, advertisers, publishers and measurement companies and include:
- The case for measurement – what is the objective?
- What are the primary categories of measurement and currency and who are the key players?
- Does video need one common currency?
- What does the dream framework look like?
- Who will be the likely winners and who should be collaborating or consolidating?
These are the big questions the industry’s grappling with that we’ll explore in a series of upcoming articles. We are four media, marketing and research executives with operational experience in some of the most important organizations in the TV industry including, Nielsen, Kantar, Netflix, Time Warner, Disney, Quibi, Snap, Mindshare, Fox, Comcast, NBCU, and The IAB.
This series, sponsored by Progress Partners and its Executive-in-Residence program, will address these challenges, and opportunities they present, in an effort to advance the debate. What makes this series unique is that we will explore these topics from the perspective of the four major constituents of the TV ecosystem,(i) consumer, (ii) publisher, (iii) advertiser/agency and (iv) measurement provider. We will release a new installment every few weeks leading up to the TV upfronts and intend to answer all of the questions raised by the disruptive and exciting trends impacting the TV industry.
We’re filled with the same awe and excitement exploring the universe of measurement as Dave Bowman, the astronaut in Stanley Kubrick’s iconic 2001: A Space Odyssey, was when he discovers that the mysterious monolith he’s orbiting holds an infinite number of stars - the beginnings of the universe.
[Editor's note: This is a contributed article from Progress Partners. Streaming Media accepts vendor bylines based solely on their value to our readers.]
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