Commentary

This Fall, Let's Spring Spot TV Ahead

Reading the trade press over the past six months, similar story lines frequently appear. A few themes that make everybody’s top 10 list are digital, addressable, cross screen video, viewer engagement, improved measurement, content creation, micro-targeting and ROI.

Pick one of the above, and significant progress has been made resolving the puzzles associated with these themes. Agencies have changed their organization structures and internal processes to accommodate the ever-evolving world of media.

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As a local TV and radio expert, I’m intrigued by the enormous change embraced by my colleagues in other environments. Pick a medium, and there has been seismic change.

Tablets have forever changed the print medium. Digital signage has changed the out-of home industry. Radio has been revolutionized by platforms like Pandora and Spotify. Network and cable TV are now simply referred to as “video." And Addressable TV is the new frontier.

So what is new and different in the spot TV industry? To stay relevant with advertisers, it is important that spot TV keeps pace with the changes in other media. Are we about to go through yet another year where the only headlines about spot TV are the size of political budgets? Or like other media, are we ready to take a leap forward and address some of the common themes of improved measurement, micro-targeting and viewer engagement?

I believe that we already have the ability to be part of the larger conversation. How? By taking an honest look at the viewership data available from set-top-box data. An opportunity of particular interest is the set-top-box data provided by Rentrak.

Currently, viewer data is available for all 211 DMAs, allowing stations to compete with other highly targeted and granularly measured media. Let’s cut right to the chase: What is it about opportunities like Rentrak that get the attention of advertisers, agency planners, and media buyers? Easy. The same things that are being talked about by the planners, buyers and sellers of the other media. Here are a few:

Improved Measurement
Rentrak uses a database collected from over 17 million homes. As a point of reference, Rentrak’s data comes from almost 200,000 homes in a market the size of Chicago and from over 40,000 homes in a market the size of Columbus, Ohio. Meanwhile, Nielsen’s audience data comes from about 820 homes in Chicago and about 515 homes in Columbus.

Intuitively, the larger base translates to more reliable and more stable data. And Rentrak is a database, not a small sample that is then projected to represent the whole. The large database results in audience ratings that are more reliable and more stable.

Micro-Targeting
The granularity of Rentrak data allows us to identify viewing patterns within a subgeography, rather than only by DMA. DMA ratings are fine if a client’s product is distributed and available everywhere within a DMA. But for a retailer with limited store locations or a smaller trading area, it is important to understand what people watch in that specific geography.

This data can lead media buyers to make different purchase decisions. Rather than buying the “boomer” station that dominates across the entire DMA, buyers can make more efficient, targeted media buys.

Viewer Engagement
Rentrak provides users with second-by-second viewing detail, enhancing the ability to understand viewer involvement and patterns in local markets. While the spot television industry continues to debate which Nielsen program rating is most representative of commercial viewing, the Rentrak data already provides us with insight on a topic that buyers and sellers have been debating for years.

A Smarter Currency
Here is what I like most about Rentrak, and what is truly a quantum leap forward. Rentrak can combine their viewership data with any third-
party data source, creating a custom currency. The age-old media metric is a currency based on demographic CPM, or in spot, a demo CPP. But smart, sophisticated marketers don’t really think in demo CPPs. They think in terms of their customers and their competitions’ customers.

Rentrak allows us to use our clients’ customer database or any third-party database and completely rethink the ROI of buying spot television. For a car manufacturer, why target and buy adults 25-54 when we can now target and buy on “brand loyal current owners who have not purchased a new vehicle in over three years”? Call it better targeting, addressability or improved ROI… it’s just plain smart.

So what’s the downside?

The traditionalists in the spot television industry continue to look for flaws in the Rentrak or any method of advanced data rather than embracing the bright spots. They cite that Rentrak is in cable homes, not broadcast -- potentially creating misrepresentation of DMA viewing.

However, the Rentrak database is 200 times larger than Nielsen’s sample in some markets. And haven’t we worried for years about the inherent bounce and wobble in Nielsen numbers anyway? Another common criticism is that the Rentrak demo ratings are still in development. However, to my currency point above, demos are going to fall by the wayside. At this point, I’ll take progress over perfection.

At Starcom, we have been working with Rentrak data since early 2010. Although the data is not universally used by the station community at this point, we continue to gain insights and are making more informed buying decisions for our clients. It is exciting to be part of the dynamic changes impacting the media industry -- particularly the changes in the spot TV business. Let’s make this a new season for progress.

1 comment about "This Fall, Let's Spring Spot TV Ahead".
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  1. John Grono from GAP Research, October 21, 2011 at 8:28 a.m.

    And size is not everything.

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