BILL LIVEK: We’re the company that continuously measures ticket sales for movies around the world. Every time someone buys a movie ticket anywhere in the world, we’re getting that information in real time and studios use our information to manage their business in real time to adjust their own marketing.
Can you break down your revenue streams by line of business?
We don’t disclose that, but our information has two distinctive areas. The movie area and the television area. About 75% of our revenue comes out of the TV ecosystem and that includes advertisers, ad agencies, networks and television stations. And then about 25% comes out of the movie industry, whether it be movie studios and all the other stakeholders in that process. There, we have almost 1,000 customers.
During your Q4 earnings call, you called out "programmatic" as your third-largest source of revenue. Can you elaborate?
We liken the word programmatic to automated buying and clearly there is a mega-trend that ad agencies want to automate more and more of their television buying and all of their buying. The only way you can automate buying is if you’ve got great data pipes going in to those automated systems. If you take automation to it’s "nth" degree, it becomes not only a way to streamline labor, but to take excess cost out of the buying process. If you wanted to buy $120,000 worth of stock 10 years ago, it would cost you $2,000.
Now you can buy $10 million worth of stock for $7 or $9 because of better information about bid and ask price. Similarly, with automation, it works best when there is an estimate of the number of TV viewers on every TV show and what the demographics of those people are who watch those shows. If you’re Cadillac and you’re trying to market your ATS, how many people who own Mercedes C-class or BMW 3 series are watching a particular TV show. Automation is a mega-trend and it is moving faster than I ever thought it would. Rentrak is helping enable it on the television side by having a measurement system that is very granular and very stable.
Can you talk about some of your data integrations?
We report viewership in a very granular way and we merge various other datasets about the cars consumers drive, the kinds of TV shows we watch, voter demographic files, information about products we’re buying in the grocery stores up against the TV shows that brand loyal watch and those who are less than brand loyal watch. The benefit of that is stable, granular information with demographics that are product-based. … We’re really (strong) in the big data area, collecting massive databases that are passive and then integrating other consumer databases on top of it. It results in a currency that allows for stability and precision, and then people can use other services if they wish to look at age and sex demographics.
Addressable TV. Are we there yet?
We’re already playing in it with the major providers of satellite and telco and cable who have addressable capabilities. I think it’s one of the most scalable targeting mediums that there is. On the cable side, they already have local insertion zones that are well-developed and work extraordinarily well. The addressable zones a cable company has have logic associated with them. We live in neighborhoods conducive to our lifestyle and certain products are consumed in a disproportionate way. We’re playing a role in determining who and (what) type of people (are) watching the television shows and the viewership of those ads. It is a mega-trend and one that is moving in concert with programmatic, automatic trends.
How will TV/digital advertising deals such as Comcast and Rubicon Project change the ad landscape?
A decade ago, I started to see when I was at Experian launching their advanced advertising business after we sold Simmons (Market Research) to them, there was an insatiable desire of advertisers who wanted to bring their direct marketing, or digital advertising, and their television marketing together. The problem was definitions of terms. In TV, everything was sample based with age and sex. In direct marketing, you could target precise consumer activities around the message. You would know somebody owned a Chevrolet and you could send competitive messages to them through the mail and later, the Internet.
Now, you can define each TV show by the cars those viewers actually own by merging, as Rentrak does in a privacy-compliant way, auto-registration files up against the TV show. Then if you’re a car company, you can look at your entire marketing landscape as one. I think digital (and TV) have come together (and) it is a trend taking place without a press release and without notice.
What's next for Rentrak?
It's all about total television. Rentrak’s platform in video on demand and linear television is the only company that measures all 210 local markets with the density of information we have. We will continue to fill in the over-the-top platforms with those databases to be integrated in. It’s all about making sure every screen is captured with the densest amount of information we can get. Some people call that census-based. Others call it massive and passive information. Whatever term, we’re running these massive databases across all these screens.