A number of disparate, ad-hoc efforts to overcome some key obstacles that have been stifling the growth of the video-on-demand advertising marketplace came together Tuesday afternoon during a standing room only session of MPG’s Collaborative Alliance meetings. The meeting, which also revealed the findings of another important industry collaboration that may explain what’s been going on with controversial kids' TV viewing patterns, unveiled a consensus among TV networks and ad agency executives for dealing with the lack of audience demographic data in VOD advertising deals.
The approach -- which was being independently tested by a variety of cable TV networks, including AMC, A&E and Turner Broadcasting --mathematically models what the audience composition of VOD audiences are by comparing actual VOD “transaction” data from Rentrak with linear TV demographic data from Nielsen for the same TV shows.
“Basically, we are looking at a hybrid blending methodology,” explained Mike Greco, executive vice president-research at A&E Networks, explaining the logic behind the approach.
The presenters acknowledged that the method is not ideal, but is a necessary pragmatic solution to provide some missing marketplace currency for a valuable and growing segment of the TV universe. That VOD portion of the TV universe is so significant now that, Rentrak research chief Bruce Goerlich said it now represents about “eight hours” per month among households that watch VOD programming. He said more than 55 million homes currently have access to VOD, and he estimated that the total impact of all that VOD viewing is now bigger than “online video.”
Harvey Kent, chief media strategist for Donovan Data Systems, Madison Avenue’s dominant provider of media data-processing systems, went so far as to liken the impact of VOD to the effect Ted Turner had on the television landscape when he ushered in satellite-delivered cable TV networks in the late 1970s.
Kent said he used the Ted Turner analogy because the advent of cable TV networks created huge “workflow” issues for Madison Avenue, before systems were put into place that effectively enabled ad agencies to plan and buy the new TV viewing options.
“VOD is the new fragmentation,” Kent said, adding: “We just need to figure out how to make this workflow happen.”
Kent showed several actual examples of Donovan agency worksheets for processing recent VOD schedules, only one of which went to the length of computing audience estimates for the VOD programming -- and even those most likely were crude estimates, he noted. Most agencies, he said, just leave the audience data blank, meaning there would be no audiences for them to plan, buy or post.
“If we don’t match it to the buyer’s workflow the advertising will stop,” he said, indicating that Donovan has been working with networks and agencies to figure out ways to incorporate the new hybrid Nielsen/Rentrak data-modeling method into their processes.
To get the hearts and minds of the ad industry attendees at the meeting hosted by MPG, but attended by many other agency guests, Tom Ziangas, senior vice president-research at AMC Networks, showed some actual examples of the audience composition for one of AMC’s most popular shows, Madison Avenue drama “Mad Men” -- which is one of its most-viewed in VOD, as well as other hits like “Breaking Bad” and “Hell On Wheels.”
“In every one of those situations ,with the exception of one, the audience composition was better in VOD,” Ziangas said, emphasizing that Madison Avenue may not just be missing a growing segment of the TV universe, but one of its most desirable ones too.
Ziangas described the hybrid method as the “best solution that we have easily at our hands.”
Rentrak’s Goerlich unveiled another key component for solving the VOD ratings problem, a system Rentrak developed that would make its VOD audience estimates “akin to” Nielsen’s C3 ratings, which are the official currency for the national TV advertising marketplace.
The method, which Goerlich called an “ad retention index,” calculates the percentage of time that commercials are actually running, and not being fast-forwarded during VOD programming. Goerlich said that index is expressed as a ratio to the total VOD audience of the program, creating something that is analogous to C3 ratings, which are the average rating of all commercials viewed during a TV show.
Goerlich showed data indicating that the retention of commercial viewing during VOD programming indexes higher than during DVR playback, and that VOD “pre-roll” ads actually index slightly higher than the average program rating for the VOD shows.
Goerlich said Rentrak has already begun working with Donovan to integrate the new system into agency planning and buying systems, and said that likely would be in place by early March in time for this year’s upfront advertising marketplace. He said a method for “posting” the results of those buys would be in place next year, but that agencies would be able to post those deals on an “ad hoc” basis with Donovan’s current system in the interim.