An expanded partnership between Simulmedia and set-top box data company Fourth Wall is part of a larger effort to replace traditional demographic targeting as the basis for ad placement.
Instead, Simulmedia is proposing to target TV audiences based on their purchase history, instead of using broad categories like gender and age to determine where and when a commercial is placed.
The deal calls for Fourth Wall to feed anonymous, second-by-second TV viewing data from more than 2 million U.S. homes to Simulmedia on a daily basis. The arrangement complements existing work that Simulmedia does with TiVo Inc.’s TRA, Nielsen Buyer Insights and GfK MRI.
Last fall, Simulmedia began working with media measurement company The Right Audience (TRA) on guaranteeing TV ad buys. Current Simulmedia guarantees around hitting a specific TV audience target at a particular time are based mostly on TRA's and Nielsen's historical data, which looks at purchase behaviors going back two months. The addition of Fourth Wall's data promises to raise the bar and set guarantees that these ads will yield a certain amount of retail sales.
Specifically, Simulmedia anticipates the extra layer of household purchase data provided by Fourth Wall will eventually allow the company to offer richer predictive analysis that will set the stage for a broader range of guarantees. Morgan expects to unveil the new guarantees during the second half of the year.
"What this ultimately means is that by the second half of the year, we will get into the TV purchase loop in real time," said Simulmedia founder and CEO Dave Morgan.
However, Morgan acknowledged that the TV business is slow to change. And the process of TV buying has always been largely built around opaque guesswork.
"So much of the TV industry is still operating on truisms that were developed in the 1970s and 1980s," he explained. "Those truisms no longer reflect America. To pigeonhole people as, for example, stay-at-home moms watching soap operas or to hold on to the idea of a family gathering around a single set to watch comedies from 8 to 9 are assumptions that don't hold water any more. The data proves the case. That's why the industry needs to move beyond sex/age demographics."
Earlier this month, Jon Mandel, CEO of TV analytics company PrecisionDemand, told AdExchanger that demographic targeting "is no better than statistically random when trying to hit actual consumers/potential consumers for most brands."
Trying to get TV buyers to reduce their reliance on demo targeting is a particular focus of analytics companies, though there’s a fear that TV's advertising dominance is entrenched. (This viewpoint, however, is contested by others who believe that the roughly $75 billion spent annually on broadcast and cable will start to shift to the $4 billion online video market.)
Simulmedia believes however that results matter, and if it can demonstrate that purchase data, not demos, can lead to actual products being sold off of store shelves, that will go a long way toward changing the current mindsets of agency buyers and their clients.
"Audience-based buying is still a new to most of the ad industry," Morgan said. "Just the notion of separating people from programs is a big leap. But it's simply inevitable that marketers will want to measure the performance of a campaign on not just whether it reached enough people, but what the sales lift actually was."