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Common Currency: Key to Video Advertising (Broadcast or Online) Measurement

By Shelly Palmer (bio), Managing Director, Advanced Media Ventures Group, LLC

This week TNS Media Research announced a new service called TNS DirecTV View. The service offers second-by-second ratings data for satellite TV customers. As an analytical tool it is similar to TiVo's StopWatch, which offers second-by-second ratings data for DVR users. Depending upon who you ask, both services can be thought of as additive or alternative to Nielsen Media Research's ratings products and both products offer a new, improved way to measure viewers for advertisers. That's the good news. Or is it?

Since the advent of the Internet and the census-based, networked ratings that are a fact of web commerce, we have heard a great deal of noise about the inaccuracy of the traditional television ratings system. The clarion call, "Nielsen sucks" can be heard throughout the land. Advertisers, brand managers and even some online video people are all challenging the industry to throw-away the archaic, sample-based rating system in favor of a "more accurate" census-based model.

On its face, this sounds like a good idea. Why would anyone want to waste even a single advertising dollar. If you really knew who was seeing your ads, you could make appropriate adjustments to your schedule and maximize your ROAS (return on advertising spend). In fact, if you take the concept all the way to its logical conclusion, you could create a class of advertising products that commanded a significant premium for delivering a more targeted audience. That's the concept, but the logic is seriously flawed.

If you don't have a common currency, you don't have a way to do business. If you need an example of what might happen to the broadcast television advertising business if there were more than one currency in use, have a look at the state of the online video advertising business (or lack thereof).

At the recent NATPE convention, NBCU topper, Jeff Zucker admonished the industry that it needs to work together to create a business model for online video. He's absolutely right. If there is going to be an online video advertising business, we need to create and standardize all of the component parts, which include:

  • Form factor — what are we buying/selling (:15 second spots, :05 second pre-rolls, post rolls, speed bumps, telescopes, product integration, billboard, etc.)?
  • Packaging — what kind of container will it go into (show, website, video snack, etc.)?
  • Distribution — how will it be delivered to consumers (television, Internet, etc.)?
  • Measurement — how will we measure success? (ratings, ROI, ROAS, brand awareness, lift, purchase intent, etc.)?
  • Common currency — how will we enable trade in an open marketplace?

Of all of these component parts, only one requires absolute standardization — currency. For better or for worse, Nielsen ratings are the lingua franca of the television advertising business. The fact that they are not even remotely accurate (sorry Nielsen people) really doesn't matter. What matters is that the entire industry uses the same system. For example, any television media buyer can speak to any television media seller and say, "I need 425 gross rating points against Women 18-49" and absolutely everyone in the industry will know exactly what the buyer wants.

It is the combination of common form factors, packaging, distribution and measurement that creates a common currency. And this is absolutely required if the desired result is a robust, vibrant marketplace.

Unfortunately, this system has not yet evolved on the Internet for video and it really doesn't exist for any other type of rich media experience either.

How will we, as an industry, make this happen? Well, first, we need to understand that online video is NOT television. Yes, both are video-based forms of communication. But, television is distributed via a closed network and online video (for the most part) is distributed on an open network (the public Internet).

The differences between an open and a closed network are profound. For all practical purposes, it is impossible for a Comcast subscriber to view any content over a Comcast cable system that Comcast does not completely control. On the other hand, consumers have absolutely no idea who is serving their online video or where it comes from. In practice, this means that any motivated party can inject video content into any system that uses the public Internet as a transport protocol. It is, by definition, public. From an advertiser's point of view — this is a huge hurdle.

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To get a better understanding of just how difficult this is going to be on the public Internet, please have a look at an article I wrote about a year ago entitled: Bootlegging Bootleggers Bootlegged — A most unusual act of piracy.

Now, there is a type of online video that may be a suitable component of a quantitatively optimized media buy — it's video distributed over a VPN (virtual private network). These systems mimic "closed" networks over the public Internet and the advertising inventory can be somewhat better controlled.

Which leaves us with the biggest unsolved issue … form factor. What exactly is an online advertising unit? It probably isn't a :30 second linear television commercial. It probably is not a :15 second pre-roll either. Is it an overlay? A product integration? A clickable bug? A telescope? So far, nobody knows.

Not surprisingly, the most profitable online video advertising has been single advertiser long form television played over the public Internet using VPNs containing :30 second spots repurposed from broadcast television. These shows carry about 20% of the ad load of their broadcast counterparts and they generate real cash.

As you can see, this is a hugely complex issue with many pesky component parts. Unfortunately, no single media company has been successful enough online to have their particular methodology become an industry standard. The good news is that future-thinking business leaders, like Jeff Zucker, are thinking about the issue. It's a big first step.

About the Author: Shelly Palmer is Managing Director of Advanced Media Ventures Group LLC and the author of Television Disrupted: The Transition from Network to Networked TV (2006, Focal Press). Shelly is also the 1st vice president of the National Academy of Television Arts & Sciences, NY and Chairman of the Advanced Media Committee of the Emmy Awards. You can read Shelly's blog at Shelly can be reached at

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