What Will The Currency(ies) Be In TV And Video Advertising?

This past week, I was in Chicago for the Beet.TV Leadership Summit at Starcom's offices to talk about the future of TV and video. The event featured a great mix of digital video sellers, media agencies, data platforms, and measurement companies, all trying to understand where video media buying is headed and what the future of cross-platform media measurement might look like.

TV watching has always been a relatively simple activity. The TV set was traditionally the only place to go for video entertainment, and people made time in their day to tune in to their favorite programs. Advertisers measured who saw their ad by how many people tuned in to the show that they bought a spot in. Gross ratings points (GRPs) came to be the industrywide-accepted currency of measuring how many times your target audience saw your ad. Today, things are quite different:

  • Consumers have more choice than ever in where they watch. On top of the hundreds of cable channels on TV, viewers can also watch content on their connected devices (laptop, smartphone, tablet) or an ever-increasing variety of Internet-connected devices that allow them to stream content from the Web to their TV and bypass their cable TV subscription entirely.
  • Consumers no longer watch TV distraction-free. Our latest data says that more than two-thirds of Americans now use a connected device while they watch TV. In addition to refrigerator and bathroom breaks, marketers now need to compete with these devices to capture the attention spans of their audiences.
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Nielsen’s Vision Of The Future of TV Is Clear

In 2011, David Cooperstein and I wrote a report (client access required) about set-top box data (STB) and its potential to transform TV ad planning and buying in the US. In the report, we made the call that STB would take hold with local advertisers well ahead of national advertisers, due in part to Nielsen’s outdated diary methodology in local markets where digital, passive methodologies were not financially feasible.

Last month, we were invited down to Nielsen’s engineering headquarters in Tampa to hear about some of their most recent innovations in the ad measurement and effectiveness space. Nielsen’s methodology, through statistically sound and widely used by advertisers and TV networks, has not changed much since its inception, so I was excited to learn what they were doing to adapt their approach to measuring TV. 

Two of the big takeaways I had from my visit to Tampa were:

  • Nielsen has embraced STB data in all the right areas. Nielsen is actively working with STB data to augment their local, diary-based measurement offerings. Instead of waiting for multichannel video programming distributors (MVPDs aka the new chic term for any cable/satellite/telco company) to sort out some of key problems with STB like data quality and sample size, Nielsen is using a hybrid approach that uses STB data combined with diary or meter data to a more stable measurement in small markets. Nielsen’s new hybrid approach addresses the gaps we outlined in our report and gives them the credibility to compete with new entrants like Rentrak and Kantar, which have been making inroads into the local measurement space.
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