14/04/2016
The Coming TV Paradigm: Measure the Ad, Not the Show
April 12, 2016
Sean Muller
For decades, the traditional TV business has depended on program ratings that estimated how many and what kind of people watched a show. In turn, networks used those ratings to sell advertising that paid for the show. That linkage between show ratings and ad sales has funded TV for seemingly forever.
But it’s time for a new paradigm, because that old linkage doesn’t make sense anymore. Instead of tracking who’s watching a show, we need to track who’s watching the ad that’s paying for the show. And we can. Here’s why we should:
In recent years, collecting show ratings has gotten infinitely more difficult, complicated and controversial. That’s because people now watch video content in many ways and on many platforms.
Yes, many people still watch a show when it’s originally broadcast, on its original network, like the old days. But many more watch shows days or weeks later, and on DVRs, on VOD, on Over-the-Top online apps and services such as Hulu, Netflix and Amazon, and through sites such as Apple’s iTunes Store and Google Play.
So, problem one: traditional ratings are challenged to measure everyone who watches a given show (though good companies are working hard to solve this problem).
Problem two: When a marketer buys ad time against a show’s popularity, there’s no guarantee a viewer will see that particular ad when they finally watch the show. Thanks to ad-skipping, VOD viewing, DVRs, OTT and the rest, a given ad sold against a given program is increasingly decoupled from the show. Different ads, or none at all, could be served up in each of those alternative viewing situations after an initial broadcast.
Problem three: All those digital providers can track customer viewing habits in much more powerful ways than traditional TV. As well, these digital companies are leveraging that information smartly, making a strong case to advertisers about efficiency, engagement and reach compared to traditional TV.
Digital outlets can track – in real time – who is watching what and for how long. The ad-based digital services can serve more targeted spots, know exactly which ads are watched and quickly swap out the ineffective ones. They may even know what ads are being shared on social media. Traditional TV hasn’t done any of that, in any substantive way.
Problem four: traditional TV providers, brands and marketers had, at best, only an indirect idea how effective their ads were. They bought ad time based on show popularity, believing the results would eventually manifest in higher sales.
Now, finally, traditional TV can deploy the tools and tactics of digital video to create a more effective ad market, a more certain audience and more powerful ways to interact.
For the first time, thanks to the Smart TV revolution, we can measure what actually is viewed on millions of TV screens, a far larger sample than previously practicable. Even more importantly, the information is available in real time, not days or weeks later, and it can track who’s viewing the ads themselves, not just the shows next to the ads.
Now, a network can offer a brand a specific bucket of lifetime viewers of a certain demographic slice, across a range of programs. Smart TV technology can directly track an ad’s reach and impressions, and generate new metrics such as average view rate. All these measures will represent a different way of selling and buying ads.
And with real-time information, advertisers can be more nimble. If a given ad doesn’t work, a different message can be swapped in. The potential for smarter, more effective, more targeted and valuable ads is massive.
In some ways, this all seems so elementary – measuring the ad instead of the show. But now we actually can do it, solving many of the most intractable shortcomings of traditional TV’s traditional approach. And TV advertising is about to change completely.
Written by
Sean Muller