Change is in the air, and I don't mean the weather.
Last week at the annual convention of the Advertising Research Foundation (ARF), dubbed Re:Think 2011, both Nielsen Catalina Solutions and Kantar Media Research announced new media analytics solutions that I found extremely interesting for a number of reasons.
Nielsen Catalina, a partnership between the ratings mega-provider and a leading loyalty-marketing firm, proposed a new model for measuring TV audiences based on viewer-purchaser behavior, replacing demographics-based ratings (more on that in a moment). Kantar introduced a similar product, connecting set-top box and consumer-purchase data to try to help marketers better target their ads.
You may know that each of these solutions shares more than a few characteristics with that provided by my firm, TRA. Not that I'm even a little bit surprised.
The television advertising measurement system has been broken for a long time. Television remains the biggest ad bucket around, at more than $70 billion, yet there's never been a way for advertisers to measure the effectiveness of their ads outside of survey work and econometric modeling. There's never been a good way to know whether those exposed to ads are buying products, especially in the world of time-shifted viewing.
Until fairly recently, all any marketer had to go on was a hope and a prayer, tied to an age- and sex-driven demographic segment.
We've suspected those demos to be obsolete for a while now. But it wasn't until this week that CBS Research head David Poltrack confirmed the industry's worst fears. Age and sex, which have driven market segmentation for television advertising since its inception, have absolutely no correlation with ad effectiveness, he reported in his address to the ARF. And while set-top-box data may provide more granular ratings, it's the matching to other databases that enables media buying and selling based on actual consumer behavior. Forrester, Delaney, Deutsche Bank, and Needham have stated as much in recent industry reports.
It's no coincidence that the TV industry is finally converging in the direction of ROI-driven, measurable, data-centric analytics solutions for audience measurement and targeting. Because to fix television advertising, the industry has to concede that it really isn't just about "ratings" anymore; it's about helping marketers target the right programs and networks, and finding the right audience for their products.
So the industry should continue using age and sex demo ratings, but supplement those with purchaser information to find the right audience and drive ROI.
It's an interesting pivot point for the media-measurement world, and an exciting validation of the analytics approach only a few of us have been touting for several years. Does the entrance of Nielsen and Kantar change the game now that the big boys have arrived? Sure. But as a lifelong street ball player, I know that there's nothing as sweet as getting an elbow in the eye and still winning the game.
So while the new players are talking the talk and making the mistakes that new players do, watch as networks and advertisers "action" data from the existing players to actually make money (aka sell more ads and sell more products).