founder of Digitex, the software provider for managing television airtime sales, says informed and accurate data is essential to calculate returns on these investments
Even before set top boxes became internet connected, Sky has been collecting data via the telephone connection on the viewing patterns of their consenting subscribers.
Given that Sky spends over £5.2bn on programming and is the UKs biggest advertiser, informed and accurate data is essential to calculate returns on these investments.
Second by second data is collected from over three million households, from which a panel of 500,000 homes is derived to give insight into viewer habits.
Through a joint venture with Digitex, Sky is now allowing broadcasters and media buyers access to this data for the purposes of audience analysis and trading television inventory for niche and non-BARB measured channels.
On the face of it this sounds like a great advance in television audience measurement. Internet advertisers have long been privy to extensive detailed data about who clicked through to their site and, as a consequence, advertising spend on the internet has
grown significantly over recent years. Television is still the best ROI advertising medium returning £1.79 for every £1 spent. This new level insight allows TV to hit back with hard data that cements its position at the top of the media pile.
Why then some resistance?
A 500,000 home panel represents a huge uplift in sample size, however, BARB reports viewing on all platforms, Sky only reports viewing of Sky customers and BARB reports viewing by individuals whereas Sky reports viewing by homes. There is no doubt that the data produced by Sky can be more robust when looking at smaller channels and where viewing on BARB is reported as zero.
The Gold Standard service that BARB provides remains so but where the Sky data can be invaluable is to those programmes/ commercial breaks where BARB report no viewers.
This presents a number of questions. Do viewers in Sky homes behave differently than those in Virgin or Freeview homes? How do we know who was in the room watching at that moment? How should the cost of advertising be recalibrated? We already have two trading currencies, BARB and cost per spot, why do we need a third? Is it only useful if all broadcasters and all buyers subscribe to the concept?
For a broadcaster, the impact on advertising revenue is unknown. For channels that perform well on non Sky platforms, the new figures could distort their apparent reach and coverage. For smaller channels the new data is almost certainly going to give uplift in viewing as Sky data is particularly good at recording data at a granular level. Across the entire TV landscape, BARB will report that more than 50% of commercials have no one
watching, Sky data will report it as less than 5.The often quoted phrase “I know 50% of my advertising works I just don’t know which 50%” may be better re-quoted as “I know
that 50% of half of my advertising works, I have no clue about the other 50%”. The larger channels fear that this will fragment the advertising budgets still further and it is their share that will be adversely affected.
For a media agency, there may be a fear that transparency will make their role more difficult, or that too much data may be confusing for their clients. Would the data support or test the approach to media planning that has been in place for many years? For sure it will require a different approach. Old assumptions of popular and valuable spots could be
challenged or could be proven to be worth more than current market rates. The data will almost certainly show that previously discarded channels or ignored day-parts do offer value in media
“Television is still the best ROI advertising medium returning £1.79
for every £1 spent”
plans even if the boss’s wife doesn’t watch that program! And what would the advertiser make of all this? After all it is their money which fuels the whole market. Would they see this as the chance to reduce budgets and drive prices down? Some advertisers may be able to achieve their advertising goals more cost effectively with better and informed planning but many will be able to justify increased spend now that they can more accurately measure the outcomes – the internet being the obvious example. Any entrepreneur or hardened businessman only spends money on advertising if it can drive sales and profits. And the more demonstrable those returns are, the greater the investment.
A paradigm shift inevitably demands a buy in from all those concerned and will not be without some pain and effort, but, if broadcasters are to continue persuading advertisers to invest in their properties, they must focus on delivering the best possible service to their customers. The Media agencies are competing to attain and retain clients and it is their skill, knowledge and experience which set them apart. In order for the media agency to
prosper they must be able to demonstrate their planning expertise and any tools and data that can assist them in this must be a good thing.
So, which way do you see it? The opportunity to capitalise on robust data to create more value in the media proposition or the threat that transparency will undermine the current price?