Commentary

ROI TV Currency? Too Many Variables For One Legal Tender

by Wayne Friedman , Staff Writer, March 9, 2009

One TV currency size mostly fits all -- right now, anyway. That's what C3 ratings have brought us for the last couple of years.

Page Thompson, CEO of Omnicom Media Group North America, says it's time to shake things up again and move to what media agencies and their advertisers have long been asking for: a true return on investment TV currency.

One can imagine, especially in this economy, that OMD clients and TV advertisers everywhere have been pressing for better accountability. But it doesn't seem to be close to happening.

The change brought about by C3 (commercial ratings plus three days of DVR playback), starting two years ago, was a less-than-dramatic shift from program ratings to commercial ratings .

The easy transition in all of this came from the fact everyone has one consistent element in their TV media plan: a 30-second commercial.

In theory, return on investment currency sounds easy: examine consumer sales of products, and link that to specific TV buys marketers make. Trouble is, according to Group M Global CEO Irwin Gotlieb, "You can't get a currency based on ROI."

When it comes to return on investment, every marketer has a different measure of success, and would seem to yield hundreds, if not thousands, of different ROI currencies. All that would also mean a massive data overload at media agencies and TV programmers.

If every marketer has its own currency, how can one company measure effectiveness against other similar TV advertisers? Marketers always want to know how they are doing against the other guy. Industry-wide comparisons seem necessary, as a benchmark.

You spend $4.25 on a venti latte at Starbucks; you spend $4.75 for a screwdriver at Home Depot. A common currency -- with value comparisons -- is at work here.

But Gotlieb isn't throwing out the baby with the bath water: "Just because a market currency isn't based on ROI, doesn't mean an agency shouldn't be held accountable for the ROI."

ROI can be overrated, he notes. Not every marketer needs to worry about sales this weekend; some want a longer-term picture of brand awareness.

One big new TV currency, therefore, needs even more sizes and shapes. But so far, no one can find that better tailor.

4 comments about "ROI TV Currency? Too Many Variables For One Legal Tender".

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L.a. Peters from Audience Research Analysis, March 9, 2009 at 3:08 p.m.
Is $4.25 spent on a venti latte at Starbucks appropriately compared to $4.75 spent on a screwdriver at Home Depot? I'd argue that it's not because the underlying purposes for the respective purchases aren't necessarily the same. Nor is the impact on the companies' bottom lines. Which I think is your point, Mr. Friedman. Clients constantly demand narrowly-defined, reliable, meaningful, comparable metrics that are simply impossible to create based on hard science. The only measurable thing is audience -- how many viewers saw what? C-3 is as close as we can get. The rest is all subject to variables, ROI included.
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Bruce Reinheckel from American Artists, March 11, 2009 at 12:45 p.m.

Perhaps agencies don't care enough or take enough time to disseminate true media ROI. The bottom line, if you're buying a mass medium, you're buying for brand recognition. Sure you want to move the sales needle, but ultimately you're looking for that brand to become 'an option' for every viewer.

I represent a media model for spot TV and radio that is a true message differentiator. It isolates commercials in an exclusive program environment, complete with high impact audio billboard. The program is a :30 vignette and resides in the break with the ad embedded in the middle. It attacks the ROI conundrum on several fronts. No more unsavory associations, brand or otherwise. Guaranteed 'A' pod positions, because even stations see the wisdom of content coming out of content, instead of straight to an ad. These benefits lead to higher message recall, which is the point in the first place. Oh, our programs are no cost and risk free and even turn into profit centers for the agencies themselves.

It is my experience that most agencies are unwilling or unavailable to listen and to learn how to do better media business. I guess they are too busy doing the things they are comfortable with rather than doing the right thing by their clients.

Carolyn Reis, March 12, 2009 at 5:36 p.m.

There has never been 'accountability for number of uses' for Commercials since 1960 that I know of. I used to do commercials and made much less than the number of times my work was actually played at a National level. SAG even considered lining up seniors all over the country who spent days and evenings watching TV to keep a log of how many times they saw a commercial play, but nothing ever got settled as far as how to get every little National network affiliate across the country to tell the truth about how many plays in a 24 hour period a commercial was given. 30 second or 1 minute version. You would think with the advent of the computer some way other than 'honest injun' would have been found. Never figured out how to get the seniors to have an interest in doing that service either.

Tv Missionary, March 15, 2009 at 6:39 p.m.

The media industry is broken because there hasn't been a size that fits all in a long time. It's just the way it is. Some brands are trying to establish awareness or consideration, some advance product attributes, some conquest from a key competitor. There are definite improvements in television ROI and set-top box data will elevate immensely. Clients have to set their own benchmarks and forget what the other guy is doing. That doesn't work anymore and trying to find a common currency that accomplishes it won't help much.
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