New Metrics for Media a strategy+business exclusive by Christopher…

New Metrics for Media




a strategy+business exclusive
by Christopher Vollmer

04/30/08




© 2008 Booz Allen Hamilton Inc. All rights reserved.
    New Metrics for Media
    by Christopher Vollmer
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strategy+business enews




    A
             dvertising has value only to the degree that it     connects with them," says David Verklin, CEO of Carat
             influences consumer behavior. But whether           Americas and chairman of Carat Asia-Pacific, the
             advertising succeeds in driving people to pur-      world's largest independent media buying agency.
    chase products and how well it is able to do so are               Or, put another way, the proliferation of media
    among the most important and difficult-to-answer             (from yesterday's print, radio, and TV to today's Web,
    questions faced by marketers, media companies, and           cell phones, podcasts, GPS systems, video games, PDAs,
    agencies. Indeed, the measurement of advertising effec-      and more) and the fragmentation of audiences have ren-
    tiveness has long been a frustrating and imperfect sci-      dered the traditional currency of advertising -- audi-
    ence, leaving marketers with few options but to toss out     ence exposure, or "reach" -- a much less compelling
    messages in various directions and hope that some indi-      measure of media value than it was before. In turn, the
    cation of consumer response would appear.                    very prospect of new metrics has contributed greatly to
          As unsophisticated and unreliable as traditional       the popularity of digital media among advertisers. In a
    media measurement approaches may have been in the            recent Booz Allen Hamilton survey conducted with the
    past, they did provide standards and currencies that         Association of National Advertisers, 62 percent of mar-
    enabled marketers, buying agencies, and media compa-         keters surveyed said that they would spend more on dig-
    nies to transact business. Today, however, this equilibri-   ital media if better cross-platform metrics existed to
    um has become unstable. Marketers demand more                gauge advertising effectiveness.
    effectiveness and efficiency from their media buys.               Marketers can use digital media to deliver contex-
    Digital media are reaching critical mass with consumers.     tually relevant messages and product information to
    And the promise of more granular (or even real-time)         specific concentrations of potential customers, targeting
    data capture of consumer response to advertising is tan-     only consumers looking for a new Volvo, planning a ski
    talizingly close to realization.                             trip to Deer Valley, or searching for organic baby food.
          "Lately, marketers have become less interested in      And they can measure the actual results of those efforts
    the number of eyeballs that see a screen or hands that       instead of relying on extrapolated audience estimates.
    touch a page and more interested in the behavior of the      Moreover, consumer actions, including browsing, click-
    owners of those hands and eyes, and how the ad message       ing on an ad, sharing information with a friend, and
Christopher Vollmer                 This article is adapted from
(vollmer_christopher@bah.com)       Vollmer's new book, Always On:
is a vice president with Booz
Allen Hamilton based in New
York. He leads the firm's work in   (McGraw-Hill, 2008).
North American media and
entertainment and focuses on
strategy development, consumer
marketing, and advertising sales
in media, entertainment, and
consumer products.




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                                                                                                                                    strategy+business enews
                                    Advertising, Marketing and Media
                                    in an Era of Consumer Control




buying a product, as well as the development of brand                  as broadcast TV, radio, magazines, and newspapers
loyalty, can be recorded and analyzed, allowing mar-                   (known in marketing as "above-the-line" media) to
keters to track with greater precision how a specific piece            direct marketing and promotions ("below-the-line"
of advertising influences consumers to make brand and                  media), for which it has been possible to track results
purchase decisions.                                                    with greater accuracy. Until recently, many observers
     With these possibilities, it's little wonder that mar-            dismissed the growth in below-the-line spending as a
keters have so rapidly embraced Google's pay-for-per-                  trend driven largely by retailers, who, they said, were
formance advertising model, in which advertisers pay                   using trade promotions to gain a greater share of the
Google only when potential customers actually click                    huge marketing budgets of major consumer packaged
through to their Web sites. No longer do marketers just                goods companies. That has been true to some extent,
ask, What is the cost of the gross rating points that we               but the spending shift from above-the-line to below-
are buying? Now, they want to know results at a much                   the-line advertising is better explained by the fact that
more detailed level, asking, Who is searching for my                   marketers can more easily measure and prove the value
brand or product and how often? What sites are my tar-                 of below-the-line spending.
get consumers going to, and what do they do there?                          The new form of outcome-based metrics combines
How many online registrations are my advertisements                    the experience from below-the-line media with techno-
generating? And, most importantly, how does all this                   logical innovations in measurement, especially involving
activity correlate to actual sales?                                    television. Not all media can, or ever will, match the
     But the media metrics for the new digital media                   direct-response metrics of Google. But the broad evolu-
environment are still of uneven quality. They lack the                 tion of these new, more granular, more precise metrics
standardization that would enable the simple compari-                  will drive profound changes in the practice and culture
son of advertising effectiveness both within the online                of marketing and brand advertising in all media.
environment and across other media channels.                                New technologies will support a shift in audience
Marketers, agencies, and media companies all agree that                measurement from estimates to data that is closer to
improvements in these metrics are going to be essential;               (and in some cases is) actual census data -- in other
without them, it will be difficult to profit in an adver-              words, to real rather than projected results. For example,
tising market increasingly characterized by more choic-                Nielsen Media Research, the reigning master of televi-
es among more media. In other words, there will need                   sion viewing measures, has traditionally captured home
to be a wholesale shift to metrics that are both outcome               television viewing data from 12,000 households (a tiny
based and comparable across many channels.                             sliver of the estimated 112 million U.S. households with
     The movement toward outcome-based metrics is                      televisions) and then used that sample to project ratings
not an entirely new phenomenon. For two decades,                       for the whole country. Instead, in the not-too-distant
there has been a slow and steady transfer of marketing                 future, set-top boxes and other devices built into digital
budgets from metrics-deprived mainstream media, such                   television systems will provide data on every consumer
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                                                                     Opt-in Activity: Online registrations, open rates,
strategy+business enews




                                                                     Consumer Participation: Indicators of viral activity,




                                                                     Sales Impact: Leads generated, store traffic, and




                                                                about to be granted. +

         Commercial Ratings: Viewership of advertise-
    viewing choice related to both programming and com-         that is especially relevant for traditional media compa-
    mercials. Marketers will ultimately have access to media    nies trying to increase their digital presence and for mar-
    and advertising response information that will be simi-     keters who want to compare digital to traditional
    lar in granularity and comprehensiveness to the data        consumer behavior).
    captured today at the retail point of sale.




         Session Quality and Engagement: The ads
         Today, Nielsen is investing heavily in an ambitious    toll-free calls, and online and offline requests for more
    "Anytime Anywhere Media Measurement" cross-plat-            information.
    form initiative designed to increase the scale and accu-
    racy of its consumer sample. This initiative will move      such as pass-along and referral rates; levels of interaction




         Total Viewing Behavior: The number of con-
    more deeply into online, outdoor, and in-store media,       with branded content, such as uploads of brand content
    and strengthen the quality of its TV-derived data. At the   to personal sites; and length of branded interaction.
    same time, players such as IAG Research and TNS
    Media Intelligence are launching innovative alternatives.   volume lift at retail stores.
    Before long, data will be gathered from mobile meters            Many marketers are anxious to use metrics like
    that track out-of-home television viewing -- from           these to crack the code of multiplatform advertising and
    Internet video downloads and streams and from videos        marketing return on investment (ROI). In fact, nearly
    viewed on PDAs cell phones, MP3 players, and other          70 percent of marketers in the recent Booz Allen survey
    portable devices.                                           identified improved ROI analytics -- along with the
         In this increasingly dynamic environment, new          consumer insights they deliver -- as the most desired of
    outcome-focused metrics will shift the focal point of all   all advertising capabilities. Their wish, it appears, is
    advertising measurement from exposure to results.
    These metrics will include:

    ments rather than programming, consumer retention of
    commercial messages, the impact of positions in pods
    (sequences of commercials that air during a single pro-
    gramming break), and the overall design of pods.

    recalled per session or visit, time spent per session or
    visit, average sessions per user, and strength of brand
    recall.

    sumers and their total time spent accessing media
    brands via both offline and online platforms (a metric
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