For the past few quarters, there has been some turmoil over the future of how to measure online video advertising, in a way that is perceived as being as accurate as broadcast measurement was once perceived. Operators and advertisers alike miss the certainty of knowing just what they are selling and receiving.
We talk about perception here, because for a large part, there are problems at both the broadcast end and the online end. Broadcast advertising is valued in a virtual monopoly by Nielsen, and that has led to both frustration and a sense that Nielsen was always trying to say that everything is okay and nothing much has changed – at least until it was ready to respond to online. It has presided over an industry paying more and more for advertising and getting less and less in response.
Online is the opposite, and while it is clearly effective, there is a sense that some of the adverts are not being seen, as viewers abandon adverts of use blocking software to strip them out, and that no-one can see if adverts are in fact being viewed and the fact that in the early market some operators have cheated, counting the ad if you so much as began streaming it, whether it was on the screen or not, on rather than if you were still there viewing the advert at the end.
The drift is towards online, but online, and in particular online mobile adverts, are seen as less valuable than broadcast impression, the video is small, and there is only one person, at best, watching, if anyone is watching it at all.
Some broadcasters have complained that attempts to place the “correct” amount of value on a mixture of broadcast and online inventory, has fallen the wrong side of the line for them and that their compelling stories are seen as less valuable than other less compelling online content.
It is against this backdrop, as a growing disillusion with Nielsen swells, and the opportunity to switch to “another type of measurement”, where broadcasters have some say, but yet still have a 3rd party to referee disputes between them over audience sizes, that the announcement this week by three of the largest US broadcast networks should be viewed. Viacom, Time Warner’s Turner and 21st Century Fox’s Fox Networks Group say they will set up with a 3rd party partner (who could it be, but it can’t be Nielsen) and will reveal all during April, in time for the Upfronts.
Recent news that comScore has now qualified to act as a third-party verifier for Facebook advertising, along with earlier deals between comScore and Viacom, suggest that the independent verifier will be comScore and its new merged partner Rentrak. But let’s not be too sure. Counting adverts requires the ruling of the Interactive Advertising Bureau, proven integrity and technical nous in counting online adverts, as well as a reliable format for counting broadcast advertising impression where there is no digital feedback system, like Nielsen people meters. Or does it?
Increasingly this can all be done with technology and partners like TiVo and Roku might well provide their data to the middle, and in the process become kingmakers for whomever this grouping works with. Getting Adobe’s blessing and co-operation may also count for quite a bit online.
There has been a concerted effort over several years by comScore to realign itself as a dedicated cross platform media measurements company, bringing TV and online together, while ditching parts of the business that do not fit with this strategy.
comScore completed its ambitious takeover of Rentrak for $732 million in February 2016, creating a cross-platform measurement portfolio reporting on multiscreen audience behavior in more than 75 countries, with the grand objective of establishing a new consistent multiplatform currency for ad and content trading. This came shortly after completion of an almost equally significant alliance with Kantar, the research division of advertising giant WPP, which ended up with over 15% of comScore shares.
So why have these three content rivals decided to band together and back another 3rd party? Well not only is their advertising spend going down, but their valuations are going down with it. That may not matter too much in the long run to Time Warner, but Viacom’s market capitalization has halved over the past 2 years, and even 21st Century Fox has seen a 22% fall in its share price over that time.
Now while we agree that it does not make sense to allow 3 broadcast based behemoths to decide on the rules for the next generation of content, they may have the market weight to marginalize Nielsen.
A fourth broadcaster, in NBC Universal, has already said it will set aside $1 billion in ad inventory which will be based on data other than Nielsen’s traditional metrics, meaning data driven and therefore programmatic, and other major content businesses such as CBS, Disney, A+E Networks and Discovery also have their own data-driven plans.
Effectively that’s where this is heading, not so much dumping Nielsen, as not accepting that Nielsen is the only game in town when assessing online and putting in place different ways of buying audiences. They will all still rely on Nielsen data to sell other audiences which data driven techniques don’t absorb.
When programmatic is used on broadcast content, it makes a hole in that content. Some viewers will get one advert, others another. You cannot ask Nielsen “How many people watched that program” and assume that all of your adverts were watched by the same number of people. At first maybe 20% or 25% of ad inventory will be allocated in that way, and the remainder stick with the tried and tested Nielsen route.
Any system overly dominated by operators, will likely over-value all the broadcast content, which is why a third party verifier is needed – partly to ensure that nobody is cheating and partly to offer some objectivity.
Viacom, Turner and Fox say they have been working on their advanced audience platform, OpenAP, for about a year. It will be up and running in time for this year’s upfront market and other TV companies are invited to join.
There is a chance that the market will be fragmented for a while, but there is also the possibility that a segment this large will attract others, to create a uniform single way of treating combined advertising types in the US. From there the process can be exported, and given the right amount of data, proven to be the right way of valuing advertising inventory in a way that is predictable and not capricious. Then the rest of the world can perhaps agree to take it up.
The group on Wednesday is releasing an open letter to the industry about the initiative and will hold an event to provide additional details on April 7 in New York.
Their aim is to offer the ability to buy against an advanced audience across TV quality publishers at linear scale. They say that they will all continue to offer their proprietary data based advertising products which have been developed in-house, suggesting that this is not a way of transacting deals, but a method to define standardized audiences which instead of coming from one publisher, come from all three.
If you want to target all people who drive a 3 year old SUV and who may be looking to replace it, it makes a lot more sense to have those people carved out of data from all 3 publishers in one query and have your adverted inserted in one process instead of 3.
Meanwhile a study from the IAB this week, conducted by Harvard Business school, said that the ad-supported internet brings in over $1 trillion in value to the US Economy, some 6% of the country’s GDP and is responsible for 10.4 million jobs. So all these decisions about the future of advertising are really important.