“On TV & Video” is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is by Kevin Krim, CEO of EDO.
In 1941, the first true television commercial aired in America, featuring the Bulova Watch Company. Ever since then, marketers have wanted to know the answer to a simple question:
Was that ad worth the money?
That question was once easy to answer. But with the exponential increase in viewing options, new programming and advertising technologies, and changes in consumption behaviors, answering that question has become more complicated.
The era of single-currency television advertising is over. With billions in advertising dollars at stake, marketers must now use multiple premium video currencies to determine the effectiveness and value of their ads.
The advantage of multiple premium video currencies
A single currency is fine for commodities. It’s great for pork bellies, West Texas Intermediate crude oil and iron ore. But TV is not a commodity. It should never have been treated like one.
The great virtue of operating under a single currency was the clarity and simplicity. Arguments about a yardstick’s precision are somewhat moot when there’s only one yardstick. And the consensus between buyers, sellers and their agents over shared degrees of imprecision enabled all parties to move forward rapidly, spending time and money on tougher questions about strategy, creativity and consumer behavior.
The great fear about the transition to multiple currencies is that the clarity and simplicity will be lost. Marketers and TV networks will no longer be able to place a $50 million buy with one phone call.
But the reality is not quite so bleak for marketers that value real value.
A single currency can only tell you a narrow story about supply and demand, limited to what the currency specifies. Multiple currencies provide a more detailed and nuanced understanding of a marketplace.
Imagine a grocery store. If you only shop for produce, and only for tomatoes, you can develop a keen sense of how quality, supply and demand changes over time for that product – but that’s it.
But if you also shop for meat, detergent, tofu and drinks, you’ll get a much more complete sense of how consumer habits, price sensitivity and product innovation are evolving. There are serious dollars in those nuances and real profit in those details.
The same is true with media currencies. Currencies pointing in different directions may signal shifts in consumer behaviors that a marketer would miss when relying on a single currency. Or they may tell you something’s happening at a critical moment in the consumer purchase journey for your brand.
Choosing the right currencies for your brand
Advertisers ought to possess portfolios of media currencies, just as they will have personal portfolios of diversified financial investments. Over time, an advertiser will learn which individual media currencies are the most predictive for its consumers, products and business results and which combinations of currencies offer the most clarity, security and returns.
NBCUniversal has taken a helpful leadership position in outlining a common vocabulary for the industry, dividing premium video currencies into six categories:
- Audience measurement
- Audience verification
- Brand measurement
- Incrementality measurement
- Business outcome guarantee
- MMM and multitouch attribution
Building on this solid start, we need to broaden the definition of currency. While reach is important, sheer audience delivery isn’t enough. What really matters is whether you’ve moved people to action.
In my view, marketers should include at least one currency in the portfolio that measures galvanic response – that electric moment when the TV commercial changes hearts and minds and sparks a real-world action. This enables marketers to optimize their convergent TV advertising investments by audience, channel, program and even by creative.
Start big and narrow down your options
After trying them all, most premium video currency users will want to focus on a few. It makes sense to choose best-of-breed in each type of currency, then select the handful that are the most predictive for your individual brand.
The multi-currency future will be managed via software reporting that enables various organizational groups and functions to manipulate the right currencies for the right parts of their TV plans.
You’ll have to ask and answer the question (with an affectionate nod to Capital One’s campaign): What’s in Your Dashboard?
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