A year ago, the concept of replicating TV-like audience guarantees -- the currency of paying only for audience members, as defined by age-sex, delivered in-target -- was merely fodder for panel
moderators looking to provoke lusty debate about the merits of GRP reporting in digital.
Fast-forward today, & the jury -- major agencies and brand advertisers -- have spoken with their wallets & ushered in the adoption of third party audience validation as an arbiter for campaign performance, with Nielsen's OCR & comScore's vCE competing for primacy.
Should we be surprised? Of course not. As agencies mandate video neutral, digital buyers are increasingly being tasked with buying online video as an extension of the TV buy. And the introduction of apples-to-apples measurement was destined to be the single biggest accelerator to knocking down the facade of buying silos.
Theoretically, this should have represented the coming out party for online video and the potential windfall of TV budgets. But as many a publisher -- bloodied and beaten by 30% in-target delivery -- can attest, online video and the GRP have made uncomfortable bedfellows.
Recalibrating Digital Pricing
Media 101: The smaller the audience, the more expensive to reach. Sounds intuitive? But historically (non-RTB) digital has been transacted on the basis of a "flat" CPM, where publisher environment, rather than audience scarcity, was the overwhelming driver of price. Something that merely reinforced digital's perception of limitless audience supply.
The fallacy of "flat" CPMs has, however, been brutally exposed by OCR and vCE. Digital buyers & publishers alike are coming to the uncomfortable realization that the in-target CPM for Adults 18+ is very different than that for W18-34, regardless of targeting or contextual alignment. All of which leads to a fundamental recalibration of digital pricing -- albeit, more in line with TV.
Digital's Promise of 1-1 is Overstated
The supporters of the flat CPM argue that, unlike television, digital allows you to target individuals & therefore eliminate waste. Putting aside that you can't actually target off OCR & vCE data (reporting only), there still remains a whole ecosystem of third-party data providers with ultra-sophisticated audience collection & targeting. Great in theory, but again cruelly exposed in the brave new world of guarantees, where the "accuracy" of these solutions varies from 25% to 40% for niche segments. A case of the emperor has no clothes.
With Power comes Responsibility
While Nielsen & comScore should be applauded for driving accountability, they also launched their respective offerings with scant regard for the implications to buyers & sellers, who suddenly had to explain the novel concept of digital "waste," with little understanding for benchmarks or best practices. Even today, elements of both providers' methodologies remain opaque: What's the direct match rate? How are unknown impressions inferred? What's the margin of error? Why is there no relationship between planning & reporting data? Perhaps most pointedly, if you run a single campaign against both providers side-by-side, why are there massive discrepancies?
The Cost of Entry
Most agree, however, that audience guarantees - however painful initially - have forced online video to grow up quickly and ultimately become a more transparent, standardized marketplace. Buyers are evaluating publisher value with intelligence. Sellers are monetizing their audiences smartly & touting scarcity (much the same way a TV network does). DSPs are creating technologies to better deliver in-target. Data providers are forced to improve audience quality and become more accountable. All these factors ulimately validate online video's ascendance into the TV mix.
So what to expect in the next 12 months? Put simply, more of the same and then some more, as Nielsen & comScore continue their arms race. Specifically, three themes will continue to drive the discourse: (1) Both will look to supplement their panel sizes to become more representative (did someone say Google?), (2) Mobile will become the next battleground for GRP reporting, releasing a flood of pent-up demand into video & (3) Cross-platform reporting will come to the fore, enabling buyers to understand channel efficacy and allowing them to optimize between TV & video. Heady days.
The greatest irony of all? As online video tries to calibrate itself around the GRP, Linear TV - via alignment of STB data & sales databases - is evolving beyond age-sex into more digital-like targeting & reporting. But that's a separate post.