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Audience Measurement Methodology Is Changing How Advertisers Buy TV

Television has always been a medium of mass marketing. Back when 4 networks dominated broadcast (CBS, ABC, NBC and FOX) a commercial on each network at the same time, called a road-block, would reach 99% of the viewers. Audience measurements by A.C. Nielsen traditionally typecast viewers by age and gender. And advertisers have spent billions of dollars targeting these broad segments, such as Women 25-54 or Adults 18+.

But the media world is changing as new platforms and digital devices have given viewers the power of choice. Audiences today determine what, where, when and how they watch television. Once the vehicle to reach a mass market, television audiences are now becoming fragmented. And how advertisers reach these audiences is also changing.

The three most common TV targeting methodologies being used by advertisers to reach their prospective audiences are:

Traditional TV

Advertisers use Nielsen gross rating point data based on age and gender statistics to purchase TV commercial time in advance through direct contact to broadcast stations, syndicators and broadcast networks. Gross rating point (GRP) goals are set based on reaching a percentage of the market with a predicted frequency level. For example, 150 gross rating points reaches 50% of the target audience with an average 3 frequency. Advertisers understand that while they are targeting their market segment, they are also paying to reach a wasted audience outside their demographics.

Programmatic TV

Using computer automation and viewership data provided by set-top boxes (STB) and specialized marketing data providers, advertisers buying in advance time can target a more defined audience going beyond the traditional age and gender descriptions. For example, more data such as income levels, education, family size, ethnicity, car and home ownership, shopping trends, etc, can better define the advertiser's target audience. Commercial time is based on programming with the highest propensity to reach this more defined audience. Advertisers are using this methodology to evaluate and place the most cost-efficient commercial times between traditional TV, cable and satellite programming. However, there is still wasted coverage since viewers outside this definition can also see the video ads.

Addressable TV

A newer version of Programmatic TV, using automation, similar data and technology, however, Addressable TV matches are identified on a household level, bid in real-time and delivered directly to the targeted household, reducing wasted impressions. The goal is to get the advertising message to those viewers most likely to take action. Not only can the buy be targeted, so can the actual commercial by having the ability to match the particular commercial version to that viewer's interest whereas with Traditional TV only one ad can be served.

With the growing trend of cord-cutting and cord-nevers, the once mass television audience is now being fragmented. By-passing cable, broadcast and satellite television platforms, viewers can connect via the internet, using streaming video enabling devices such as smart tv (Samsung, LG); sticks (chromecast, amazon fire tv, Roku); OTT boxes (Roku, Apple TV) and digital gaming players. Addressable TV can target these viewers, augmenting media strategy for current traditional television advertisers by extending reach and frequency.

Want to know how your traditional television schedules can be enhanced with addressable TV, email Barbara Goldstein at [email protected].

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  • Have you ever wondered if you are really getting all the media exposure you pay for? Do you know where the hidden costs are if your staff or your ad agency is not skilled at forecasting rating points? Do you know how often the stations on your buy run the wrong traffic or fail to deliver the planned GRPs?

    Do your customers allow YOU to charge for products and services that weren't delivered as ordered? Do you know many ad agencies and advertisers do exactly that? You shouldn't pay for media that doesn't run as projected, negotiated and ordered; but you probably do if you aren't conducting media performance audits.

    One client hired MPA to conduct a sample audit of their in-house media department. They selected three markets- Dallas, Charlotte and Pittsburgh. We audited their entire process – from plans to buys, from invoices to payment vouchers.They advertised weekly entertainment events so it was important that spots run as ordered. Most radio stations demanded payment in advance because entertainment clients are considered "transient" advertisers.To our client's surprise (but not ours) the media performance audit revealed that not one single radio station ran their schedules as ordered. Traffic was wrong, critical days were missed, the number of spots varied, but the client was paying 100% for the advertising as ordered.

    I thought we were running a pretty tight operation until MPA conducted a performance audit. The annual impact of this slippage easily cost our company over $250,000 per year. We believe in the MPA way of guarding our money.

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