GroupM is weeks away from finalizing what data its clients use for their
upfront advertising buys, but it is likely at least some GroupM clients will be ready to make a switch from Nielsen's legacy ratings data in time for the 2023-24 season, according to the media-buying
giant's head of research and and investment.
"We have some clients who really want to move. There are some who are interested, but want our point of view on it," GroupM Executive
Vice President Bharad Ramesh said during this week's episode of the agency's business intelligence team's "This Week, Next Week" podcast, which focuses mainly on the potential role of a JIC -- or a
joint industry committee -- for setting a new market currency in the U.S.
The discussion, which was prompted by last week's announcement by the U.S.' biggest TV network owners that they has
already formed one to do just that, was described as a premature statement by Ramesh and GroupM Global Director of Audiences Research Simon Thomas, who noted he has had 40 years experience working
with various JICs around the world, and characterized the U.S. networks' initiative as more of a MOC, or media owners committee than a genuine JIC, which is "tripartite" and requires equal
representation from advertisers and agencies as part of its decision-making process.
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Semantics aside, Ramesh and Thomas indicated the U.S. networks initiative is a step in that direction and
implied the U.S. is on the verge of a massive overhaul of its market currency that will transform the way advertising is bought and sold, and how its effectiveness for advertisers is measured and
analyzed.
"I would say that in three years by 2027– maybe four – it's going to be all about audiences," Ramesh predicted, noting that historical measures like Nielsen's based
on a so-called "opportunity to see" an ad bought by an advertiser, would be replaced by measures of actual exposure, and potentially even higher orders such as actual "attention" paid to them.
In the near-term, the GroupM experts implied the U.S. marketplace will become increasingly complicated by an array of alternative currency vendors pitching to be used as the primary or secondary
basis for advertisers TV, as well as cross-media, advertising buys, which could create marketplace confusion.
“Potentially, people are worried about that happening within the total video
marketplace in the U.S, where we end up with a VideoAmp metric, an iSpot metric, a Nielsen metric, a Kantar metric, and so on," Ramesh cautioned, adding, while a U.S. JIC ultimately could lead to a
"standard industry metric," the other currencies could be used as the basis of negotiations for some advertisers and networks.
"If you want to trade on top of that, you could do that. It's not
a problem," he said.
While a number of big TV network owners, including NBCUniversal, Warner Brothers Discovery, Paramount and Fox, already have begun "certifying" their own alternative
currency suppliers, including iSpot.tv and VideoAmp, Ramesh said it's too soon for many clients to make a shift from Nielsen's legacy ratings in time for this year's upfront, and that -- in retrospect
-- an industry-wide initiative should have begun in September 2021, "the moment Nielsen lost its accreditation" from the Media Rating Council (MRC).
Perhaps the most significant issue raised
by Ramesh and Thomas was how an eventual transition to true exposure-based audience measurement will impact how much advertising U.S. advertisers buy and what they pay for it, because extraneous
"frequency" will be removed from most advertising buys.
"The total budget the clients spend is probably going to go down," Ramesh warned, adding, "because the fact of frequency goes away."
In other words, he said, the potential of "unified" exposure-based research across video platforms to remove extraneous frequency form the mix, "for 10% of 20% less budget, maybe my cost per point
was higher... but I'm actually in the end spending less money to hit my objectives. That is a very, very real thing."
Ramesh said the costs of "non-working" media would likely go up for
advertisers in that scenario, because they'd be paying more to process the data, but ultimately there would be a net savings on the total cost of buying advertising.
"That's what we're looking
to see in the next three months -- when you look at all the data coming through from unified measurement -- is, 'Hey, what is the actual, true, reach and frequency that we are getting.'," he
explained.
He added that the tension ultimately would come from pushback from the "sell-side," and GroupM's media buyers, to negotiate how they "protect your CPM basis" in a marketplace where
advertisers buy fewer overall ads.
"That's the pressure. The data wants us to spend less, but for the network and the trading side, they will not tell you to cut the budgets," he said, adding,
"That is the next shift that's going to be the tug-of-war. If not in this upfront, definitely by 2024-25."
What, if any role, a JIC ultimately plays in any of this will depend on a number of
variables, including complexity, potential legal haggles, and the fact that JICs historically have been slow to move, according to GroupM's Thomas.
