"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Jon Mandel, CEO at PrecisionDemand.
Nobody dies or suffers injury in advertising. That allows people to become entrenched in the way things are done, with false beliefs about others’ capabilities. The entrenched, with their limited knowledge of the larger ecosystem, are rife in both the online and offline worlds.
For proof, look at how the online video world has become TV-friendly in a very short amount of time. As online video attracts viewers across devices, suppliers are selling just like TV, importing gross rating points (GRP) as they try to make digital more like traditional advertising. It’s a lovely sound bite, but it’s completely backwards in logic.
Wedging the blunt GRP system into data-rich online video dumbs down digital, AdExchanger’s Joanna O’Connell stated recently. The GRP is a poor fit even on TV, where advertisers have relied on the highly inaccurate combination of age and gender data for far too long.
Moving away from the GRP requires a painful learning and cross-pollination process. Entrenched media planners feel as if reach-based buying against a demographic is the full extent of the targeting they can do, online and off. What they don’t see is that age and gender reach is all marketers choose to do right now because they’re stuck in the past. Here’s how I see the learning process shaking out.
The explosion in data over the past few years is not a digital-only phenomenon. Guess what? The offline data that is so en vogue online right now still works in offline media, too. Doesn’t matter if we’re talking about an advertiser’s own first-party sales data or a third-party source. Match consumer data with the growing amount of set top-box data, and you have a pretty good sense of who watches which TV programs. It’s not based on behavioral assumptions, like digital, but on who these people are and what kinds of products they actually buy, all completely anonymized, of course.
The issue is not that there are no choices other than age and gender, but that buyers don’t really want choices since no one will get hurt if they don’t change. Programmatic is taking off for online video, with or without the GRP, because it uses fresh audience data.
GRPs and reach-based buying are built around eyeballs, which is counterintuitive to pairing with online programmatic’s data-driven buying methodology. If you’re using behavioral data to identify the best buyers, why use eyeballs as a measurement? Responsiveness is what counts, and nonbuyers shouldn’t be in anyone’s numbers. Phrases like “brand awareness” and “mindshare” are worthless if you’re not generating sales. Buy a huge Web series on YouTube or during the Super Bowl, and everyone who sees the ad might remember the brand name, but it means nothing if they don’t give the advertiser money.
Danny Abraham, one of the best businessmen I’ve ever known, told me he didn’t care about ratings if the cash register wasn’t ringing. If people won’t buy a product, they can’t count for the audience numbers. I may see an ad five times before I buy, you may need to see it 10 times and my daughter may see it 20 times and never buy. Why would any advertiser want to pay for “reach” if they’re reaching completely unresponsive consumers?
Is there more to video buying than GRPs or age and gender data? Absolutely. With all the data available, advertisers can go deeper, combining thousands of attributes with sales feedback loops, iterative targeting and the capability to include data gleaned from apps and online. All of the data that marketers have at their disposal can go into both online video and TV buys if they want it to. Heck, online video campaigns can actually inform TV buys, because online still allows you to track clicks, interactions and conversions. That’s useful for painting a picture of who your buyers are and the kinds of creative they respond to. It’s not the end-all, but it’s a piece.
We’re right to look at online video and wonder why it’s taking small steps rather than big leaps that the antiquated TV market would follow. The truth is that most of the programmatic guys will get wise to this in the coming months. They can try to take on Google with online ad-tech stacks, but there’s more than $70 billion at play in TV, which is huge for ad-tech startups. If the online companies want to become truly cross-platform, it is relatively easy to combine with systems already going beyond the age and gender GRP.
Focusing on GRP integration is just a waste of time. The GRP is yesterday’s enchiladas. The television world is the food cart serving fresh tacos. What kind of meal would the online world like to sit down and feast on?