The Future of TV Metrics

How new KPIs are turning the industry upside down July 7, 2017
How we consume TV continues to fragment while the notion of TV has become more about the type and quality of content, rather than the stationary flat screen mounted in the living room. Think back to the last time you watched an entire television series, week after week, at its regularly scheduled time. It’s likely been awhile.  The proliferation of new TV formats and mobile viewing have created an exciting new world of engagement opportunities for advertisers, as well as more sophisticated measurement solutions to calculate ROI. 
 
Brands need to reconsider the metrics they use now to ensure they are understanding the effectiveness of digital TV advertising and it’s driving consumer action. Take, for example, the traditional metric for measuring how effectively a TV ad is delivering a brand’s message, gross ratings point (GRP). While the GRP certainly has a place in TV measurement, it does not address all the demands of this new media ecosystem. For one thing, it’s only modeled to measure ad exposure, not consumers’ behavior in response to an ad. GRP also does not take advantage of new, more sophisticated measurement techniques to understand how effective an ad was at driving people to a website or – even more important for brands with a retail presence – a store.
 
UNCOVERING TV ROI WITH PHYSICAL-WORLD BEHAVIOR 
Understanding what consumers do when they are in the real world is taking ROI measurement well beyond TV’s traditional “eyeballs” metrics for advertising effectiveness. CMOs have begun to embrace foot traffic measurement based on physical-world behavior as a more reliable and actionable metric for calculating ROI, especially for omni-channel marketing campaigns. That trend is also being embraced across TV, increasingly making it an industry standard and enabling TV advertising to stay relevant and demonstrate its value in the digital era.
 
Advanced technology offered today can directly connect traditional “linear” TV ads (as well as on-demand, streaming and addressable TV ads) to consumers’ real-world behavior by matching audiences’ mobile device IDs to households in an anonymized, privacy-friendly manner. Measuring the change in store visits from target audiences through location data allows brands to finally “unlock” precise TV campaign ROI measurement.
 
Digital agencies and advertisers are held to metrics that are tied exactly to how many shopper actions they drive, which are proxies of actual visits. And solving the traditional media measurement problem is becoming increasingly important for the TV industry as it undergoes a dramatic shift.  But it’s even more crucial as the advertising ecosystem moves towards an omni-channel approach that incorporates TV into a wide range of other digital and physical media. With foot traffic measurement tied to specific ads, marketers can move towards a new universal metric, like cost-per-visit, that not only measures advertising success but efficiency too. 
 
If brands can better understand the cost-per-visit tied to a TV ad and compare that to other types of media, its value becomes much clearer. So, even while the cost of a 30-second TV spot is often much higher than a banner ad, cost-per-visit metrics can reveal that the commercial is delivering more foot traffic per dollar spent than the banner ad. The bottom line is that TV doesn’t have to go the way of print if it can stay relevant in the current media landscape by shifting to a new, more reliable and relevant metric that is comparable across different channels.
 
HOW MARKETERS CAN LEVERAGE NEW TV METRICS
There are several questions that every marketer should ask themselves before leveraging foot traffic measurement technology for their next TV ad campaign. First, what are the primary insights you hope to reach from this type of measurement? For example, are you looking to compare different creatives’ ability to drive traffic to stores? Or do you want to see which region was most affected by your national TV spot? Maybe you are looking to test the efficiency of different networks, dayparts, or even types of media. Whatever it might be, defining your goals upfront is important when deciding what measurement technology to use. 
 
Second, it’s important to know that the data being used to create foot traffic insights will be reliable enough to meet your needs. Take exposure data sources, for instance: is the data based on linear, over-the-top (OTT) streaming, addressable TV or some combination of those? How is the measurement provider connecting real-world behavior and household viewing habits? (Watch out for convoluted guesswork and modeling or privacy violations.) Basically, you should be asking yourself, is the methodology sound and conducted on a statistically significant scale?
 
Finally, can the measurement provider deliver an apples-to-apples comparison of digital, mobile and other advertising mediums using the same metric? This is incredibly important in the new world of omni-channel advertising. As advertisers inevitably start to unify around more reliable metrics like cost-per-visit, marketers must fully understand what they mean (and the technology behind them) to realize their full value. 
 
Lindsey DiGiorgio is vice president of marketing at NinthDecimal.

Receive regular news and technology updates.
Sign up for our free newsletter here.

Comments

Twitter