Currency vs. Measurement: Understanding & Improving TV Marketing
TV currency is not what it used to be. As advertisers head into the upfronts this year, there will be no MRC-accredited currency to guide them. Now, many are questioning how they will measure and transact on advertising going forward. But the demise of a single currency is also an opportunity. TV advertisers and publishers are shifting to a more evolved concept of currency that more accurately captures what advertisers want to know – not program viewership as a proxy for ad exposure – rather, how many consumers were exposed to their ads.
Even more importantly, though many in the TV industry conflate the terms “currency” and “measurement,” the shift to multiple currencies is occurring alongside the rise of more granular forms of measurement that will help buyers and sellers expand their understanding of TV marketing effectiveness.
Measurement extends beyond currency, which approximates reach, to account for a wider range of outcomes, such as transactions. Advertisers are redefining how they determine “value” and demanding much more from measurement than approximations for eyeballs.
Here is what buyers and sellers of TV advertising need to understand about the evolution of currency, the ways measurement exceeds the scope of currency, and how they can use the latest forms of measurement to drive more targeted and impactful advertising.
TV Currency’s Evolution
In TV advertising, the term “currency” refers to the agreed-upon unit of value based on which media buyers and sellers transact. Historically, media buyers purchased ad spots tied to programs, and Nielsen told buyers how many viewers their ads had reached, creating a record of value. But legacy systems no longer adequately capture the true reach of programming across time, screens, platforms, and channels in today’s converged TV landscape.
The result is that TV advertising’s currency, which was once linked to programs and then addressable audiences, is now moving to impressions. This is a positive change for advertisers and publishers because it more accurately captures the true basis of advertising’s value: how many viewers ads reach.
But for TV measurement, approximating reach via more accurate forms of currency is just the beginning. That is where other forms of measurement come in.
Measurement Beyond Currency
Reach, which currency reflects, is just one TV advertising objective. Advertisers also want to set an optimal frequency for their ads to have more control over how they manage their effective reach across households and different audiences. They also want to achieve physical outcomes such as driving consumers to stores, and digital outcomes such as website traffic. Ultimately, brands want to grow their business, which encompasses both maximizing reach and driving transactions.
Historically, advertisers could not measure TV’s ability to drive these many goals. Now, they can – and all these goals fall under the realm of measurement, not currency. To that end, TV advertisers and publishers will need to understand the many forms of measurement available to them (and the technologies and talent required to access them) to make the most of the channel going forward and to inform media transactions.
Over the last five years, TV has evolved from a data-poor to a data-rich industry. These days, every time someone watches CTV, it sends a record, creating, at scale, census-level data that can be corroborated against transactions and other datasets.
This explosion of data presents a massive opportunity for gains in targeting, optimization, and incremental growth. But the proliferation of data sources that enables unprecedented measurement is also the obstacle standing in the way of achieving it, as it is difficult for advertisers to conduct consistent measurement across devices, platforms, and channels.
Solving for Measurement in a Fragmented Converged TV Ecosystem
When addressable buying hit the market, some lauded it as a panacea that would “solve” TV ad targeting and measurement through one-to-one precision. Addressability did not quite live up to the hype, but it did prove a useful tactic that advertisers could leverage to improve precision. The same is true of CTV advertising.
As advertisers get more comfortable transacting in a converged TV environment, we should expect them to decrease reliance on the traditional TV upfronts; and instead turn to the flexibility and next-day measurement of CTV ad buys to drive more calibrated targeting and measurement. We can also expect advertisers to demand more than just topline reach (or the basis of currency), asking publishers and technology providers for metrics and capabilities such as incremental reach, sales lift and creative performance and optimization.
For their part, sellers should raise their expectations for inventory utilization. Total revenue is a function of inventory, sell-through, and CPMs. Now, publishers have a chunk of inventory to sell, such as streaming, that they did not have before. They should demand that technology providers help them leverage additional targeting and measurement abilities to maximize the value of this new inventory.
The proliferation of currencies and data sources does present challenges for TV advertisers and publishers, but more importantly, it also marks a time of unequaled opportunity for gains in precision. By understanding the many ways measurement exceeds currency and expanding their capabilities in the former, both advertisers and publishers will maximize the value of converged TV, creating an ecosystem where all sides of the trade win. ■