Commentary
Rethinking The Single Currency Model
- by Josh Chasin , Op-Ed Contributor, July 17, 2015
It’s axiomatic that digital technology radically alters every business it touches, turning long-held assumptions on their respective heads. (If you’re a veteran of the music or newspaper businesses, you probably just winced reading that sentence.)
There is no question that digital has fundamentally altered the advertising and media measurement landscape. Viewability and fraud are probably the most ubiquitous topics in the digital audience measurement space today, and neither of these were media hot topics just a few years ago.
I’ve worked in the audience measurement business since 1980 (I know what you’re thinking:“Josh, come on! You must have been four years old when you started!”) so I’ve always tended to see the digital metrics landscape through old-school goggles.
One of the long-standing assumptions in audience measurement has been the notion of currency — and more to the point, of a single currency. I learned about the one-currency model in a very real way working at Arbitron in the ‘80s and ‘90s. We won one single-currency battle: spot radio measurement, where we competed with Birch Radio. And we lost one: spot TV, where we competed with Nielsen.
Back then, in looking at the TV ratings business, we used to say that there was enough money to support one-and-a-half players. And while data users very much like competition, historically they (you) believed that multiple currencies led to confusion. Thus, as with Simmons and MRI in print, Arbitron and Birch in spot radio, Arbitron and Nielsen in spot TV, Nielsen and a number of players in network TV, eventually a single currency won out. More often than not, the losing player went out of business.
But I’d like to offer a radical opinion. In the digital age, multiple transactional media currencies can, do, and will continue to exist. Indeed, they need to exist.
Consider viewability. Right now we have over a dozen accredited third-party viewability providers. Presumably all these companies have customers. While it’s almost certain that some thinning of the herd will take place over time, I don’t think it’s realistic, or even desirable, to expect we get down to a single viewability provider. Certainly buyers and sellers want to understand the reasons for differences between vendors, and the MRC’s recently released study will help provide some clarity about these differences. But it is almost equally certain that multiple viewability currencies will continue to compete in the marketplace. And the world will go on.
There is a need for a single currency, but the need is per transaction, not per market. The entire marketplace need not convene around a single currency in order for commerce to take place freely. Rather, in a given transaction, the buyer and seller must agree on a single currency. But different clusters of buyers and sellers can and will convene around different measurement currencies, and everyone will still be able to conduct business efficiently.
The counterargument one might make to this is that if there are multiple currencies, then none of them are currencies at all. But this is a false premise, as multiple currencies absolutely can co-exist. You can buy the same good or service right now using dollars, euros, pounds, or even bitcoin. These are all currencies.
The media marketplace is fragmenting and growing increasingly complex. In a simpler time, a single-currency marketplace seemed simple and orderly. But anyone who has seen the Lumascape knows that our marketplaces are neither simple nor orderly. Advertisers and their agencies negotiate increasingly diverse and expansive packages with media operators; media deals might include digital display, digital video, traditional TV, OTT, terrestrial radio, and digital streaming.
Buyers and sellers will almost certainly convene around different currencies to valuate such complex media packages moving forward. As we move further and further into an era of multi-media, multi-screen media buys, new currencies will have to emerge, as single-media currencies will prove inefficient.
By the way-- there is another column to be writ about the implications of the above on the JIC construct. I'm not sure I'm going to write it. But I'm confident Tony Jarvis and John Geono will take us most of the way there in the comments below...
Typo. Grono.
As always very thought-provoking Josh.
You are correct that in a financial sense the world has many currencies such as the dollar, the Euro and the pound. Indeed ISO lists 162 of them - probably fewer than running around in the online world (just kidding).
But the only way that system works is by having a currency exchange mechanism. Who would set the exchange rate in the media world? Would each country/market be able to set their own rate? Would the ticket be clipped with each transaction as currently occurs in the financial world (using a rate that is higher than most media agencies work at!).
They are some initial reactions and thoughts, but as always I will keep pondering it because there is definitely precedent and merit. Mind you how long did 'viewability' take to get agreement? We might end up debating this over a drink at the Pearly Gates!
Cheers.
Tony must be on vacation.
Josh, it's rather misleading to use the term "currency" in this manner and then to cite cases like Arbitron beating Birch in radio but losing to Nielsen in spot TV, as if these were cases of different currencies, with one beating out the other. In both cases both of the contenders were trying to measure exactly the same thing----listening or viewing. This also applies for MRI versus Simmons in the magazine field. Both were trying to measure average issue readership.
The real question concerning currency as it is used in media buying is whether it must always be a simplistic audience definition---like average quarter hour "listening" for radio or "average commercial minute "viewing" for TV or issue "readership" for print media?Is there any other metric that makes more sense? So far no one has found one.
Ed, that was kind of the point-- two services atempting to measure the same thing. COmpeting audience masurement currencies. In each case i was directly involved with-- Arbitron/Birch in spot radio, and Arbitron/Nielsen in spot TV-- it was most assuredly a battle dfor currency status.
As I believe Jon has agreed, your monetary currency argument is specious as there is an official global money exchange mechanism that does not exist in media because the measurement for each mediim is all over the bloody place. This is why you & I presented, "When is a GRP not a GRP!"
The JIC structure generally practiced around the world ensures there is a single official currency for each medium which helps to avoid the choas you are now encouraging and which is clearly evident in the online space from the dozen plus providers of "viewability metrics" you rightly acknowledge. That they can each be MRC accredited raises the complex questions of whether the Standards are sufficently rigorous and truly serve our industry - another topic for another day.
As ComScore is aware, notably in the UK, there are always opportunities for research providers to supplement the official JIC currency executed by a competitor and to ultimately win the official currency measurement assignment! Super JICs offer the additional opportunity to ensure each medium is measured at the equivalant (comparable) levels as close as practically possible which would further reduce the puzzled looks on advertiser faces when assessing their media (intra) mix campaigns. Failing measurement equivalence, such an organisation could at the very least provide the industry with an official "benchmark" exchange rate for impression/GRPS etc. across the various currencies - a solution to your dilemma? Perhaps that is a role for CIMM or MRC? Such an official exchange would be incredibly valuable even if people like us considered that "improvements" were required? At least we would we would be well ahead of the mess that is media measurement in the US today and at much lower costs!
I guess Tony's not on vacation after all.
Tony-- I wasn't going to get into the JIC situation here, and I know i's near and dear to your heart-- especially as someone who helped bring the US it's only JIC (the one that no one realizes is a JIC.)
But even in a JIC construct, I will argue that the asumption that all buyers and sellers will continue to have the same set of needs-- and thus will want to coalesce around the same currency-- is false. Viewability is an extreme case, but I cite it because the economics are totally different in digital, and espeially in viewability; no one is spending $30 million a year to field a nationally representative viewability panel. So the old school battles of atrition-- one of these two competitors is going to tire of losing all this money very soon-- won't necessarily happen in the digital age.
I think we may already see the beginnings of fractures in the traditional JIC model, as TAM and digital JICs attempt to suss out digital video. Is it part of digital? Is it part of TV? Is there a single multi-JIC offering to be designed by TAM and digital JICs in cooperation? Do TAM and digital JICs go away and new, multi-screen JICs emerge in their places? These aren't simple questions. The world is getting more complex, and as my basic premise here states, long-held bedrock assumptions end up overturned.
Josh, fabulous piece! I don't see how the U.S. advertising industry can make advertising more effective without deploying more granular, enriched data for targeting and segmentation, without recognizing more than one currency. While the digital world is admittedly in a state of flux sorting out the viewability issue and others like it, the world of TV is entering a new programmatic phase where buyer and seller recognize two targets: a primary standard, age gender metric complimented by a secondary target that may be the product of integrating TV data with consumer transactions. The secondary target audience delivery benchmark and guarantee, if there is one, is agreed upon by buyer and seller. Let the buyer and seller determine their appetite for the use of alternative currencies, ideally armed with knowledge about the data quality of all sources.
Josh, fabulous piece! I don't see how the U.S. advertising industry can make advertising more effective without deploying more granular, enriched data for targeting and segmentation, without recognizing more than one currency. While the digital world is admittedly in a state of flux sorting out the viewability issue and others like it, the world of TV is entering a new programmatic phase where buyer and seller recognize two targets: a primary standard, age gender metric complimented by a secondary target that may be the product of integrating TV data with consumer transactions. The secondary target audience delivery benchmark and guarantee, if there is one, is agreed upon by buyer and seller. Let the buyer and seller determine their appetite for the use of alternative currencies, ideally armed with knowledge about the data quality of all sources.
Regarding the use of more than one "currency" in media buying, in reality this is already in place. For a number of years network TV buys have been using a combination of "raw" audience ratings based on the usual sex/age definitions, coupled with an indexing system which purports to reflect the "engagement" of the viewers to program content and, by implication, their propensity to be exposed to the commercials. Buyers and sellers agree on the metrics to be used in each buy and the indexed GRPs are guaranteed on a total schedukle basis.
There is no reason why product usage indices couldn't be used instead of the engagement metrics or in combination with them, if a suitable source could be found to provide such data reliably on a viewer, not a "big data" set usage, basis. MRI and Simmons already have a great deal of single source data of this kind and its only waiting to be used, though some caution is needed in its application. What's holding things up?Why isn't this data being considerwed?
Also, national TV buys use multiple currencies for clients that use sports, which is not typically sold on a C3 or C7 basis. Local TV doesn't have commercial minute ratings at all.
Typo alerts: In the first paragraph, above, last sentence, make that "schedule", not "schedukle". And, on the last word, make that "considered", not "considerwed". Oh, if only we had an editing option. Sigh!