Rethinking The Single Currency Model

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.

This post was previously published in an earlier edition of Metrics Insider.

2 comments about "Rethinking The Single Currency Model".
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  1. Ed Papazian from Media Dynamics Inc, October 16, 2015 at 6:47 p.m.

    Joel, I hate to be a pest about this but I think you need a better definition of "currency". You note that the media industry has tended toward a single currrency and competition such as between Arbitron and Birch for radio, Simmons and MRI for magazines and Arbitron and Nielsen for local market TV ratngs, found one "currency" winning out over the other. Actually, what happened was one company winning each of those battles, but in all cases, the "currency" was exactly the same. All of the players were measuring "audience", often turning out reports that contained exactly the same type of data--average quarter hour ratings for local radio and TV; average issue "total audience" for magazines. Sometimes their methodologies were different, but not their product---audience buying "currency".

    It could be argued that some other measurement---or "currency" ----needs to be developed, rather than audience. Or, perhaps we need to focus mainly on "engaged" viewers, listeners or readers. Or, maybe forget about audience entirely and go with ad awareness or sales---if there's a way of doing that.

    The same issues arise with digital. When we have a debate about the definition of ad "visibility", we are not talking about a different "currency". We are talking about getting a better, more accurate and meaningful, definition for the same old "currency"---audience.

    Don't get me wrong. Audience, even when properly defined and measured, is not a surrogate for ad impact, let alone the quality or depth of the audience's experience with content. It's simply a way for media planners and buyers to quantify the structure of their ad campaigns' audience potential....nothing more.

  2. John Grono from GAP Research, October 16, 2015 at 7:08 p.m.

    Hi Josh.

    An interesting article and POV.

    There is another aspect to 'currency' that I think needs to be thrown into the debate.   And that is the scope of metrics included in that currency.   I think digital (or interactive/online to be more precise) has highlighted this.  It seems like every month someone somewhere has come up with another ratio, another metric that will make everyone's trading life easier.

    The broader ths scope of metrics the less chance that a single vendor can provide it, and indeed it may serve to either slow-down or dumb-down the industry (assuming that all these new metrics have 'value' and given that many die within a short period of their announcement clearly not all do).

    But I want to challenge your example of euros, dollars, bitcoin etc.   I understand the parallel you are drawing but they are currencies that go WAY beyond such a single market such as TV, print or press.   They cross EVERY industry.   They touch EVERY citizen, resident and visitor to EVERY country.   And they ONLY work because we have an exchange rate system that supports and allows multiple currencies.   Why?   Because without them the global economy wouldn't function and would eventually collapse.  I simply can't see that being the case for the various vendors of (say) viewability metrics.

    No-one is saying that the currency exchange rates are 'right' or 'wrong' - we just agree on them and get on with business. Having to negotiate the exchange rate for viewability (especially as different publishers will use different viewability vendors, and would be a pretty big impediment to conducting business, especially as the industry lurches forward to the altar of programmatic.

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