A Media Euro: The Other Single Currency Crisis
The most recent ARF Audience Measurement conference was titled "The Measurement Crisis." Crisis or not, there were real signs of discord in the industry -- primarily about digital ratings.
Conventional wisdom holds that the main reason why display/video advertising has had trouble increasing its share vs. traditional TV advertising is the lack of comparable measurement across the platforms to allow major advertisers to compare the two. That is, the reason that major brands have been holding back from moving more dollars into display and video advertising is because of the lack of single currency for TV and online: a media “euro” of sorts.
The industry’s experience with cable TV advertising in the 1970s -1980s is often used to show that if an emerging channel has metrics comparable to an older one, budgets would quickly follow proportionally. The fallacy of this argument: In this instance, the GRPs were also the main metrics for planning and optimizing cable TV placements -- and remain so until now.
Online, however, is not planned or optimized by TV-like metrics. Few panelists could explain why having online GRPs was so important, beyond loosening the strings of the TV purse. Most advertisers ended up saying that GRPs alone were not sufficient, and that they needed deeper funnel metrics: branding, behavioral, and transactional.
So, GRPs are crucial for TV budgets to come online, but become kind of marginal once the check is cashed? That’s not what one wants from a single currency.
When it comes to media ratings, things cease to be completely rational; they are still somewhat of an industry sacred cow. The ratings nostalgia is rooted in the simplicity of the times when GRPs/TRPs were, indeed, a media currency, considered by advertisers and publishers alike to be the best available equivalent of audience value to the advertiser.
The currency, however, is NOT the value; it only represents value, and only because everyone agrees it does. Just making online GRPs look and feel exactly like TV GRPs won't make them the currency. Even those advertisers whose brands are married to specific demographics became increasingly sophisticated in digging deeper to assess the value of delivered audiences and their impact on the bottom line. Reducing all this to the lowest common denominator with TV just for the sake of cross-media consistency and simplicity inevitably means throwing out the baby with the bath water.
The ratings-points approach is typically detrimental to an online campaign's efficacy. Focusing just on reach and frequency limits a digital campaign's ability to serve ads based on specific audience characteristics other than demographics, such as interactions with the ad, sharing and passing along content, and other online behaviors and transactions.
GRPs certainly have a place as a cross-media campaign metric, but they are unlikely to take root as the universal online currency.
What then would be the currency?
With all the wealth of data on exchanges, it’s not a given that online needs one. Well-designed online campaigns actually thrive in the absence of currency. Advertisers have learned to apply behavioral tools to fish the muddy waters beyond the premium placements, where the cost of media is defined not by number of eyeballs but by supply and demand. As a result, they discover the untapped potential customers more efficiently. Therefore, a single currency will not serve their interests.
A better approach for advertisers would be to assess the relative roles of all available measurements and to create their own internal currencies informed by the unique economies of their specific products and brands.