Television Networks Need An Ad Quality Score

I believe in advertising, but I dislike most television commercials. That's why I bought a TiVo several years ago -- so I could watch exactly the content I wanted, when I wanted, and avoid the rest.

Not surprisingly, with a critical mass of the population using DVRs, TiVo has begun to extract some fascinating insights about network programming and commercial viewing. Todd Juenger,  vice president and general manager, audience research and measurement for TiVo,  recently reported that just like programs, some commercials are more popular than others.  For example, analyzing ad viewership by product category, he determined that in February some categories (motion pictures, foreign cars) were far more popular than others (domestic cars, toilet paper, laxatives).

But here's where his analysis got interesting: "A network that carried a lot of ads for foreign cars would have had higher February ratings than a network that carried lots of domestic car ads. There was a penalty for carrying domestic car ads instead of foreign car ads. Network ratings are being driven not only by the program, but by the advertisements themselves."

According to Juenger, this prompts key questions: "Should networks seek out advertising clients in popular categories, or with popular brand campaigns, and weed out less popular categories? Should networks start programming commercial pods, based on intelligence of which ads will retain most audience, giving privileged positioning to popular product categories? Should networks start charging premium pricing for toilet paper ads (and discounted pricing for theatricals)?"

Foremost, being a viewer who is consistently turned off by most advertising embedded in network programming, I would answer a concrete "YES" to all of Juenger's questions. Each one speaks to the single reason most people get hooked on DVRs in the first place: to watch more content they like, and less that they don't.

But at second glance, Juenger's questions reminded me of Google Adwords' advertising auction system, where Quality Score reigns. According to Google: "The AdWords system calculates a 'Quality Score' for each of your keywords. It looks at a variety of factors to measure how relevant your keyword is to your ad text and to a user's search query. A keyword's Quality Score updates frequently and is closely related to its performance. In general, a high Quality Score means that your keyword will trigger ads in a higher position and at a lower cost-per-click (CPC)."

Why is Quality Score important? According to Google: "Quality Score helps ensure that only the most relevant ads appear to users on Google and the Google Network. The AdWords system works best for everybody - advertisers, users, publishers, and Google too - when the ads we display match our users' needs as closely as possible. Relevant ads tend to earn more clicks, appear in a higher position, and bring you [the advertiser] the most success."

Which brings us back to the fundamental problem with too much advertising: a huge lack of relevance and a big source of irritation. Most agree the television buying and negotiation system is ripe for reinvention. As it evolves to the fast-changing digital video landscape, its architects must remember that we, the viewers, are the primary master. It should be top priority to ensure that the ads displayed match our needs as closely as possible.

Google got somewhere by putting its users first. Networks and emerging video publishers must do the same, unless they want to become less meaningful in our lives. That's why television advertising needs its own version of the Quality Score. For networks, it will be the best defense against viewer dissatisfaction and defection, and the greatest investment to cultivating more loyal and profitable advertiser customers.



12 comments about "Television Networks Need An Ad Quality Score ".
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  1. Monica Bower from TERiX Computer Service, May 1, 2009 at 12:57 p.m.

    Great piece, top to bottom, Max. Funny thing, though, with TV ads: They don't have to be targeted to my interests for me to enjoy those I consider the best. Online it's just the opposite; if you target me because I work in web design, but your specific product is not relevant to the toolset I use, I ignore you. On TV you can be advertising low cost car insurance or a brand of light beer I have no intention of ever drinking on purpose, but I enjoy watching the ads, and I have a positive impression of the brands behind them.

    The web can be more targeted, but it is rarely more engaging despite its actual 'interactive' capabilities.
    Am I simply more tolerant because I don't expect TV to be targeted? Or because its much easier for TV to deliver a high-quality sight sound and motion experience than some stupid sidebar, no matter what suspicious offer or imbecilic game it uses to try to coerce me?

  2. Tom O'brien from MotiveQuest LLC, May 1, 2009 at 2:26 p.m.


    Sure you don't have a chicken/egg problem in paragraph 3? More foreign car ads on successful programs vs. more successful programs b/c of more foreign car ads?


  3. Max Kalehoff from MAK, May 1, 2009 at 3:01 p.m.

    Tom: Good question. I'm presuming Juenger accounted for cause/effect. Regardless, commercials are content, so there's no way they don't influence the attention paid to the overall programming block.

    Monica: I didn't say match your interests...I said match your needs. If your need is entertainment, then, indeed, an entertaining commercial is likely to satisfy you.

  4. Todd Juenger from TiVo, May 1, 2009 at 3:40 p.m.

    Hello, Todd Juenger here. Thanks Max for nice piece and I'm flattered you picked up my idea and ran with it.

    Wanted to lob in quick methodological clarification, as a few good questions posed on methodology ("chicken/egg" problem). The metric I used (and often use) to identify ads with higher/lower relative viewership, compares the viewership of the ads to the the viewership of the surrounding program content. So it normalizes for program popularity. In February, foreign car ads retained a high percentage of audience relative to surrounding program content. Domestic car ads, unfortunately, did not.

    Hope that helps.

  5. Gary milner from The Simpler Way, May 1, 2009 at 4:10 p.m.

    As the world becomes more and more digital, as media watching fragments across DVR,PC, Smartphone and who knows what new devices, the potential for accurate targetting becomes immense. There has to be a model that starts to align ad targetting with interest and intent. What if my DVR was free for giving up information on products i was in market for, not interested in or have just bought. If I have just paid $xx for a car from a bankrupt car company what sense is there in serving an ad up. I dont watch TV to be entertained by ads - but the ones that meet my intent I expect to be entertaining and served up in smaller doses than today...20 minutes of ads in an hour is a waste of my time. The reach and frequency model is akin to watering the desert in the hope of creating an oasis.

  6. Rajeev Jain from GSD&M Idea City, May 1, 2009 at 6:58 p.m.

    Who controls the placement of advertising to the consumer? Advertiser, Network, a delivery mediator such as TiVo, or some other entity?

    Who best caters to the consumer will win out in the end unless there are policy or economics driven distortions in the value chain.

    A quality score can help the consumer. A few questions though - have ratings helped the consumer? Who controls the quality score? Who monetizes it?

  7. Paula Lynn from Who Else Unlimited, May 1, 2009 at 8:17 p.m.

    No ads, not so much MediaPost. The car you don't buy today may be the one you want tomorrow. All me me me's aside, someone has got to pay big bucks for the content so you can be paid a living wage. So we all have to suck it up. Subscription only only increases the great divide and it will not support the professional content you want so you can get paid a living wage.

  8. Michael Senno from New York University, May 2, 2009 at 8:20 a.m.

    Great points, Max. One question, in today's television environment, can networks afford to be choosy about their advertising? Do they have the market power to reject companies that want to advertise, given they are struggling for those dollars as it is?

    Conceptually, I have thought a lot about what you are saying in regards to online, and I think its part of what online needs to raise the impact of ads and increase the ad dollars spend. Give users the control over what ads they want to see, and/or make them with a quick click vote on if they liked an ad or not. It will stimulate creativity and competition among brands, hopefully engage users more leading to more value for ads and content providers.

  9. Hugh Seaton from Seaton Consulting, May 2, 2009 at 11:08 a.m.

    Coupla points Max. First is that its not reasonable to expect that ad quality will have that big an impact on viewership - if they like the show they'll watch it. It might be a tie-breaker between two mediocre shows but a bad ad will not make "Heroes" fans stop watching.

    Second, the upfronts are game theory's best example - you aren't the first to point out that the negotiation process probably needs to change, but why would the networks let it? What will break that oligopoly won't be 'ad quality' or clamoring from the digital folks, it will be the rising quality and marketshare of cable.

    I would also point out that there does exist an excellent gauge of ad quality - a research firm called IAG research does day after engagement & other measures for TV programming as well as the ads within them. Very good stuff that is increasingly being picked up my marketers.

  10. Max Kalehoff from MAK, May 3, 2009 at 10:17 a.m.

    Michael: The networks can't afford not to be choosy, I think. Struggles for ad dollars will become more difficult if viewers are disinterested in most of the ads and continue to figure out ways to filter them.

    Hugh: Ad quality (and by extension disruption)'s influence over programming viewing and popularity probably varies from little to great. But if ad quality is low, it means that the ads don't serve the needs of the viewers...and viewers will inherently filter them out, mores so as technology improves. Moreover, as technology improves, the impact of certain ads and not others becomes more clear to marketers.

    Also you ask "What will break that oligopoly won't be 'ad quality' or clamoring from the digital folks, it will be the rising quality and marketshare of cable." Agree, but not only cable, but the unpacking of programming bytes via the Web -- a la Hulu, Netflix, Boxee, etc. From a viewer perspective, network brands don't mean much anymore.

    I'm familiar with IAG -- great stuff, albeit still quite conventional versus what we'll see in a few years.

  11. David Steinberger from Gomper, May 4, 2009 at 4:19 p.m.

    Rajeev, you asked "Who controls the placement of advertising to the consumer? Advertiser, Network, a delivery mediator such as TiVo, or some other entity? "

    What if consumers controled the placement of advertising to the consumer? We're all trying to find newer and more innovative ways to mildly deceive consumers. How about offering them a seat at the table? That's what I've been thinking about


  12. Andre Szykier from maps capital management, May 13, 2009 at 5:34 p.m.

    What Tivo and DVR have done to change viewing habits is important to consider compared with passive TV watching through a remote. Experimental studies show that people will not forward through all ads, just most. The ones you view begin to describe the viewer's preferences, when coupled tracking the viewed content.

    The introduction of Slingbox and Boxee which permit viewing your DVR content anywhere on the Web will change viewer habits once again. Layering in this new viewer data opens up new modes of advertising, not just video pre roll and ghosting.

    One more thing to consider: Boxee is IP addressable, as so are the internet enabled devices a viewer uses, whether PC, or mobile. You are one step away from creating social networks where members in a defined group can access recorded media on their friends DVR. You can now look at group viewing habits along with shared behavioral data.

    If anything, this creates a fertile plain for advertisers to move away from display and popup ads into interactive. Once you are in a group, let the games begin...

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