The upheaval in TV measurement long dominated by Nielsen, and the subsequent emergence of multiple currencies in which to strike ad deals, is causing disagreements about the future of how brands transact on TV deals, according to a report by consulting firm Deloitte. While it seems the U.S. ad industry widely accepts multi-currency TV and video measurement, how it all should play out remains contested.
Among findings in the report—from interviews Deloitte conducted with 50 industry executives—are impressions from agency executives that networks are only interested in measurement changes that make their inventory more valuable; that agencies often have been slow to accept changes in measurement because it costs them more without increasing their revenue; and only a smattering of leading marketers are fully engaged in evaluating the changes, possibly because they benefit from undercounting audiences.
The report was commissioned by the Coalition for Innovative Media Measurement, Association of National Advertisers and 4A’s.
Many of the report’s top-line findings are unsurprising and have previously been reported or widely discussed. Those include that the transition to new measurement currencies is happening in phases, with the industry currently in “test and learn” mode. Respondents also widely expect a “multi-currency” future with two to three, or in some cases, as many as five vendors.
The report also finds that despite the proliferation of “big data” sets from millions of set-top boxes and smart TVs, household panels will remain important for calibration and validation. And it finds that most industry collaboration is taking place between networks and agencies rather than “within constituencies,” i.e. between agencies.
But details within the report and respondent commentary provide some more interesting takeaways. Here are some of the key findings.
‘Tension triangle’
One media agency executive cited a “tension triangle” in which each side of the business—media, agency and marketer—is trying to play the measurement game to its own advantage. “The sell side is only interested in adopting alternative currencies that make them look as good or better than the benchmark,” said another media agency executive.
Joint Industry Committee has support
The Joint Industry Committee approach that five leading media companies announced for developing streaming measurement standards and certifying vendors has some broader industry support. “There is a high level of interest across key constituents in a Joint Industry Committee” approach similar to what exists in the U.K. and several other countries, the report concludes.
Agencies have lagged
Agencies often have been laggards in trying, adopting or investing in new measurement approaches, according to some industry executives. Agencies have a “moderate and tempered level of engagement,” the report said. “We would be very much welcome to more participation from agencies on this,” said one advertiser quoted.
A media agency executive pointed out why agencies may be less than excited. “I don’t see a win because any of these improvements is revenue neutral. It is a cost for us … and now I have to give you three reports. I have to now customize and invest in three or two different planning and buying systems … and no clients are going to pay me more.”
Marketers often aren’t engaged
Beyond “large and sophisticated” advertisers, most marketers aren’t highly engaged with the shift to new measurement, according to the report. But among the bigger players that are engaged, their interests range from better measurement that will increase their returns on investment to “preserving the rate benefits or risk asymmetry of the legacy models,” which gives them “low incentives and engagement.” One measurement vendor executive gave a blunt assessment of why marketers may not want to engage: “The brands are just fine with … undercounting audiences. What the brands want to do is really arbitrage the system. And they could actually care less if the currency changes.”
How ‘multi’ will multi-currency be?
While there’s widespread consensus that a “multi-currency” world will exist in the short term, there’s far less about how long that will last or how “multi” it ultimately will be. “I’m living in more than one [currency] right now,” said one advertiser quoted in the report. “And it’s very difficult. So I don’t want there to be more than one.” Several other media agency executives and advertisers quoted expressed interest in an ultimate consolidation within five to 10 years to one or two currency providers at most. Still, other advertisers envisioned as many as five long term.