MAdtech Point: Metrics in advertising technology must evolve to be more holistic
The metric that really matters for advertising is holistic channel planning, where we measure readership, viewership, engagement and transaction, all on a common estimated universe.
This topic requires a little bit of an historical perspective. When print was the leading medium in advertising, before TV replaced it, media planning was largely based on publisher claims. The Audit Bureau of Circulations (ABC) was instituted to offer an industry report of audited circulation details of publications and this report used to be released once in 6 months. As a next step, a readership survey was instituted, with a panel that represents the universe, to project a publications’ readership. This helped in targeted advertising as the panel was constructed to reflect some basic demographics. These surveys are meant to be conducted once a year. Even at that point in time, the advertising industry used to struggle to find sponsors for these surveys. Not every year we would get these reports. Even after 30 years, this challenge remains, but that is for another day.
Thirty years ago, the frequency with which some metrics that mattered to advertising was made available was every six to 12 months. Time stood still between these periods, as if consumer behaviour with respect to media never changed in between. When television started gaining traction, the industry instituted ratings (TRPs) that reflected consumer behaviour towards watching various programmes. These reports used to be generated every week. So, suddenly, we had fresh insights that came much more frequently than that of print media. This helped in planning TV advertising a lot better and made it more interesting as well. Objectives were set; strategies were devised and there were discussions about whether we had met our objectives or not; as to whether our strategies needed course correction. So much so that media planning used to be classified as TV Plan and “Non-TV” Plan. What gets measured grows! And TV advertising started growing faster than print advertising.
Thirty years ago, thanks to the satellites, consumers had more options to view more TV programmes, not just from terrestrial TV, but from cables and satellites as well. Even at that point in time, in the early 90s, most of these satellite stations used to conduct their own surveys to establish their viewership and map it to the annual readership figures to sell their airtime. As more monies started moving from print to terrestrial TV and then to satellite TV, the industry expanded coverage to measure satellite TV as well. While the frequency of reporting remained weekly, the representative panel was expanded to cover households that had access to satellite TV. It is interesting to note that this access was largely attributed to be a lifestyle indicator, so much so that media planning, which largely became a TV plan, started being classified as Cable & Satellite Plan and Terrestrial TV Plan. Over the last decade, rapid improvements in lifestyle meant that the representative panel began to reflect cable and satellite viewership more than terrestrial TV. What gets measured grows!
Twenty years ago, when the world wide web offered internet advertising, consumers had many more options to access and view content. Metrics for measurement expanded from readership to viewership to engagement. To highlight this graduation in measurement, digital platforms started conducting their own surveys to establish their credibility. Engagement is a lot more dynamic metric than viewing and reading. To capture this, there was a need to move from annual to bi-annual to weekly to daily and even hourly statistics that helped in understanding consumer behaviour. Engagement is equally personal and there are nuances that differentiate viewership and readership that can afford to be measured at the level of a household. Digital platforms started investing significantly towards measuring this personal and dynamic metric for measurement. What gets measured grows! Just like the way money moved from print to TV and to satellite, more monies started moving to digital advertising.
But then there are two significant differences this time around. Firstly, the industry didn’t expand the coverage holistically to reflect digital advertising. Digital platforms offered their own engagement metrics and marked their own successes or failures. Secondly, since there is no holistic measurement, while we moved holistically from planning based on readership to viewership, we have not moved to planning based on engagement, instead we now have print plans, terrestrial TV plans, satellite TV plans and now digital plans. Even the digital plans are further splintered into Search Plans, Social Plans and now Retail Media plans. What gets measured grows. Privacy regulations are now kicking in and consumer information needs to have consent for advertising, making retail media the most compliant and qualified channel for advertising. Even before we start planning based on engagement, the industry is rapidly moving towards commerce now.
A country of billion consumers, India, powered by mobile phones, simultaneously reads, views, engages and transacts. The metric that really matters for advertising is holistic channel planning, where we measure readership, viewership, engagement and transaction, all on a common estimated universe. Today we have individual channel plans and NOT holistic engagement plans, at the least, leave alone transactions. What gets measured grows! If we do not start measuring engagement, we will soon end up with measuring only transactions. And that is not good for the overall business of advertising. If we truly believe advertising builds brands, now is the time for the industry to rally the troops to start measuring engagement. Holistically.
Gowthaman Ragothaman is a 30-year media, advertising and marketing professional and CEO of Aqilliz, a blockchain solutions company for the marketing industry.
