Evan Shapiro comments on the news that Nielsen, as expected, will not switch off the use of its current, conventional (people-meter + PPM in top 56 markets) TV audience measurement service in trading for next season’s USA Upfronts negotiations, which start in May. The original schedule for Nielsen One, its new service that integrates “big data” from pay-TV set-top boxes and connected (smart) TV sets, which was supposed to become the only available service next year, is still in Beta.

Therefore in Upfronts three different sets of numbers will be available from Nielsen as trading currencies:

There are two main technical hazards I can see:

Nielsen understandably can neither shut down the conventional service yet nor prevent the use of the new service on which it has staked its future in its main market, the USA. But this situation does devalue the very concept of currency, which has in recent years differentiated Nielsen from competitors. Now there will be three currencies from Nielsen, and three others offered by VideoAmp, iSpot and Comscore (which, to be fair, raise similar questions).

The Advertising Age report (paywall) contains an anonymous prediction that negotiations will be slowed by haggling over which currency to use, with each favouring a different party. This could seriously obstruct Upfronts.

Adalytics has caused quite a stir in late June with its report, apparently backed by copious data and running some 130 pages, documenting that YouTube advertising buys extended to “Google Video Partners” (GVP), platforms other than YouTube which advertisers include to increase reach and impressions, resulted in 73% of the impressions being to fraudulent or otherwise invalid traffic (bots, made-for-advertising (MFA) garbage sites, other adverse-context sites, videos not visible on the screen or not audible, and various other violations of Google’s own standards of quality to GVP buyers).

The report, available here and as PDF here, was quickly picked up by major general-interest periodicals including The Guardian and The Wall Street Journal (paywall). Presumably, had Adalytics’ evidence been in the least vulnerable, it would have been set upon by Google and sued to death. Google has been silent.

Ad fraud expert Dr. Augustine Fou and his Fou Analytics firm followed up with a platform-by-platform comparison showing that Google is not even the worst offender. It, at least, has standards (that in most GVP placements, it violates). Some platforms’ invalid-traffic (IVT) percentages are even higher. Dr. Fou calls out Samsung, specifically, for not even permitting buyers to avoid its extension network, arranged similarly to GVP and consisting mostly of websites and apps. In another article, Dr. Fou explains his methodology and shows how the established players that have long reported very low fraud percentages are contradicted in this by their own evidence and are in conflicts of interest, anyway.

This costs advertisers tens of billions per year in the US. No surprise that small D2Cs that advertise only online dwell in ignorance. Had they been paying attention, they would have realized that they are not targeting potential customers anyway and their ROAS is rock bottom. But large advertisers have no excuse. The avalanche of which this is a portrait as a young snowball will cause the path of least resistance to include stopping the waste.

Self-measurement based on playout data, unverified at the viewing end, is and will continue to be vulnerable to fraud that can be quite massive. As such, it could undermine the entire economic basis of Internet and other programmatic advertising, including video.

Plug: Immetrica’s personall® audience measurement is IVT-proof, bot-proof, fraud-proof.

The clobbered-together assemblage of RPD, connected-TV and panel data has a huge number of gaps, and would still have many of them even if every aggregator subscribed to all the pay-TV providers, all the connected-TV manufacturers, and Google Chromecast, Amazon Fire and Roku devices (the first two of which are not offered for licensing). The lack of a universal, comprehensive measurement system at sufficient scale is defeating the foundations of audience measurement, and this hurts everyone. At Immetrica, we do have the technology to address this.

Mediapost’s report of ARF’s findings.

Regarding Disney’s claims of profitability for Disney+:

I don’t believe the 2024 profitability claims. Independently of India and IPL. Let’s focus on the US or the West. There’s no short-term escape from the systemic haemorrhaging into the gutter. Today’s investment in exclusives has to be repeated next year. To the extent it can be done at all, Pluto shows the way, with less or no exclusive content and just enough stickiness. But that’s a financially unromantic dirge. The whole concept needs to be rethought, and that includes advertising as well as content. Brand safety. Context. Without repetitiveness or in-segment proximity. Cheap. That’s how to earn CPMs at TV or somewhat higher (but not ostentatious) levels. Do your job. Do it better. The great achievement of OTTs so far is how to turn the profitable business of network television into a financial black hole. Making a small fortune… out of a large one.

An article in Forbes says that Nielsen, shorn of MRC accreditation for its national television ratings, is “struggling”.

The MRC’s publication of a final set of standards on the minimal amount of time an audiovisual ad must have been viewed to be counted as an impression has generated the usual comments, all true:

With all the work that has to be done in measurement, we are still hung up on this problem, which is effectively unresolvable. Why would sellers be liable for an advertiser’s and its ad agency’s failure to hold the viewer’s attention? The sellers sold an opportunity to see, nothing more. Attention, emotional resonance, brand and sales effects are all the advertiser’s and its agency’s responsibility, which can and should be studied before a campaign goes on air, and the expected ROAS (return on ad spend) can then be modeled and compared to actual. A ROAS model thus refined can inform the desired range of CPMs (the AS in ROAS).

Netflix’s departing subscriptions last quarter included an unusually high percentage of longer-term customers.

The Council of Europe’s European Audiovisual Observatory produces much interesting tracking of the industry in the Council’s territory (mainly EU+UK). Gilles Fontaine has posted a quarterly snapshot of the competition for subscriptions.

Following Netflix’s much-discussed loss of just under -0.1% of its subscriptions worldwide in Q1 2022, and the subsequent decision by that company to open an ad-supported tier, the industry conversation has been in part whether Netflix can survive now that its armour has been pierced by competition.

Netflix refers to itself as “cash-flow positive”. But its main problem is not cash flow but rather debt, which it has accrued to produce and license the content on which it has relied for growth. Although the company seems to be reducing debt now, the rate at which it is doing so has slowed, and the last few instances of borrowing have been at ever less favourable terms, so ability to maintain the current debt load is uncertain. At the same time, Netflix is reacting to increased competition in Europe by launching more high-profile language-centric production initiatives, and this content must be produced without more debt or spending from operating revenue—not impossible but far from easy, and happening against increased competition that might not be limited to -0.1% quarterly losses in the future.

If you’re going to be an autocrat, choke access to information that you do not control:

In parallel with keeping the biomass (your population) down, you can express displeasure when told bad news by your spies, generals, officials and courtiers. They will quickly learn not to give you any bad news, to spin any news as good or invent what cannot be spun. Being the source of your own propaganda, you are then left to be isolated from any contradictory reality. And if you don’t seek out such information yourself, then you will eventually arrive at something that sounds crazy but is merely the logical consequence of what you’ve fostered; for example, that you can conquer the Western world.

Bill Harvey is quite correct. Yielding in the face of evil is pointless, as it forces an eventual confrontation with it.

Edward Papazian bemoaned the lack of verification of audience measurement data. The MRC audits, while important, are secret, don’t delve deep into technical details, and are not continuous.

Bill Harvey writes about the new DASH study to determine some basic facts about device and account sharing. This is a breakthrough, but it also reminds us how little we know about large pieces of the audience puzzle.

DASH is an interesting study for its otherwise unavailable findings. And a sample of 10k persons on questions as commonly applicable as these should render the results significant. Although the low response rate (10%) is a concern because it could be a symptom of significant self-selection. And the use of recall (in the absence of alternatives) also causes deviation from the truth.

There is probably a large amount of error in the newer data sources that are now flooding the measurement market, in addition to the obvious category-wide ones, such as lack of individual-viewer data, lack of household aggregation (for many or most connected-TV sets and probably some STBs), lack of demographics orher than location, out-of-date third-party data used for attribution and targeting, and, in connected-TV and AVOD server-side data, fraud:

Christian Grece analyses the endless losses faced by standalone streaming services, and the vicious cycle wherein attempts to escape, as the services envision them, require more investment in original content that only deepens the losses.

For all the innovation and disruption, US industry (which includes most of the global streaming services) persists in fashion-driven mass insanity as one of its main modes of behaviour. This is sad to me because the US is the country where I’ve chosen to live and whose citizen I am. Consider how the economics of content have changed:

Phase 1, Golden Age of TV through early cable (c. 1950-1985): Almost all US content funded entirely by the US terrestrial networks. Sales to the limited foreign clientele (almost exclusively other terrestrial broadcasters, there being almost no general-interest pay-TV channels even where pay-TV existed at all) are pure profit. Content producers/owners can afford to charge low rates and thereby obtain very wide coverage. Yield: $$$$.

Phase 2, the age of mature/peak pay-TV: the US networks no longer fund most content entirely, leaving the content producers/owners to make up the shortfall to breakeven from foreign sales and their own pay-TV channels, multiversioned around the world. Usually that’s not a problem because the pay-TV demand for content has grown dramatically. Yield: $$$-$$$$$, depending on the strength of the content producers/owners’ own properties internationally and their sales efforts.

Phase 3, now: terrestrial broadcast and the declining but still huge pay-TV segment are still profitable but content producers/owners treat them as nearly irrelevant, especially aside from a launch partner (e.g., AMC for Breaking Bad). Most of the effort is spent on owned streaming services. The expenditures vastly outstrip revenues, which increased competition from other streaming services is already threatening, but no-one seems to have an idea of how to stop the haemorrhaging other than by cutting the wound open some more (dumping even more money into original content). There is no reason to expect this to lead to eventual profitability, and it won’t. Yield: minus $$$$$$, yet like the stereotypical mobster, a streaming service seemingly can exit this situation only feet first. And except for Netflix, this is being perpetrated by the same established content producers/owners and broadcasters/channel operators that are so careful about profitability elsewhere in their business.

It would be irresponsible not to refer to the onslaught my homeland, Russia, is planning against its neighbour, Ukraine. The theatre of the casus belli started today, with attacks on civilians, including kindergarteners in the middle of their day, that were performed by the Russia-backed gangs that now rule the Donetsk and Lugansk regions, and falsely blamed on Ukraine. There are no words to describe this, and the Putin dictatorship that did it has nuclear weapons too.

The obligatory industrial take on this, for LinkedIn is not Facebook. Putin’s path to total Mugabe has taken 30 years. One of his first accomplishments once elected president was to squish any dissonant broadcasting. But the ratings of the networks, safely under his control, haven’t stopped declining.

The moral of the story: the death of TV is never as fast as predicted, and it can do a lot of damage on its way to oblivion.

The conversation around alternative audience measurement currencies in the US has increasingly included predictions of greater use of business outcome guarantees (see also here).

Why would media which sell advertising time wish to assume responsibility for aspects of its effectivenesss outside their control, such as product quality, price, relevance to market demand, the marketing approach, the campaign concept, the creative, and targeting?

And if sellers do make such guarantees, won’t they just have to do so at much higher CPMs, and, given the high uncertainty contributed by all these factors, still higher CPMs to protect themselves from deficiency in one or more of them?

What will advertisers gain? The ones that have made good or mediocre decisions on these factors will definitely have to pay more for airtime.

This is even more silly than wanting ad ratings. These are possible but will be several times lower than those of surrounding program content, so CPMs based on such ratings will rise inversely proportionally. But at least the math here is linear. The large number of factors and the huge variance in each of them would make business outcome guarantee-based ad sales effectively unpredictable. That’s a losing proposition for everyone.

Media sell opportunity to have an ad be seen by a certain number of people of a specific demographic, a certain number of times. They cannot otherwise affect the success of the advertising. That’s the job of advertisers and the agencies they select.

Am I not seeing something here?

Apropos Comscore’s cross-media measurement ambitions and the astute, as usual, comment by Edward Papazian:

Data from STBs or connected TVs has a substantial tuning-without-viewing proportion (it can be reduced by technical means but I haven’t heard of anyone’s having done that). But people-meter data also has this problem during commercials, because to check in and out at every break is asking too much of the panel household member. The two solutions offered in the US are Tvision, which has a very strict and not necessarily valid attention definition (face turned towards screen, which might not indicate attention in all cases) and a small sample, and Immetrica, which has a looser definition (audio within hearing), is truly cross-platform and cross-device (while Tvision is not), measures individual viewing (while Comscore doesn’t), and has a more affordable marginal sample cost.

The outgoing CEO of CIMM, Jane Clarke, reminds us that panel measurement remains essential.

The always astute Edward Papazian points out some of the inadequacies of measurement from pay-TV or connected-TV devices. For an advertiser, asking for household-level STB data or, more so, connected-TV data which is not even aggregable to households, is the proverbial chickens voting for Colonel Sanders. By doing so, they accept ad “viewing” numbers that include those not paying attention to the ad and not even in the room.

For any advertiser that has used TV, outcome measurement must include its brand-building effects, from both TV and other sources (word-of-mouth, buzz etc.). To measure the effect of a campaign on sales, an advertiser can look at its sales, before, during, after that campaign and its prior campaigns. What’s wrong with this? Why whine about lack of outcome measurement when there are real problems, led by how to cover reach that used to come in a simple buy on the terrestrial networks but has now largely fragmented away?

Lately there’s been much discussion of the unsustainable trend towards expansion of the number of OTT services.

In my humble opinion, even if no further such services were created in the Western world, the current state of the industry is unsustainable. No service is profitable, all are loss-making to various levels of profundity, and the fragmented offer is causing fragmented customer adoption.

The solution proposed is for some services to merge to survive. This may work in the short term, but it is unlikely to suffice. Even if there are only two large consolidated services, both will not have the ability to amortise their content costs across a large part of the maximum potential customer base. It would be like having two competing pay-TV operators with largely different selections of top-rated channels.

A complete consolidation is impossible because it would be anticompetitive towards both users and content providers.

What is needed is cross-licensing. Maximum exposure and thus maximum monetisation for content owners. Easiest and most sensible offer for subscribers. And maximum profitability for the services, who would now be offering an essential product on a competitive basis, rather than have to fight for customer attention with profligate spending on exclusive content. Win-win-win, as they used to say.

This is tl;dr and oversimplifies the economics, but I think it’s the only way forward.

How many buying decisions are made by multiple members of a household? And which ones of them can be affected directly by an ad campaign?

Jon Ahuna of Viant describes the problem and suggests a solution. But to what end? The target audience of most advertising consists of persons, not households. If you wish to get young adults to try your soft drink, you have to get them to try it. Then, if they like it, they will start buying it and causing it to be bought for them. This is a decision of an individual consumer; the household is irrelevant.

What Mr. Ahuna describes as a problem, the overexposure of a household to the advertiser’s message, is not shown to be a problem. Of course, targeting individuals results in waste because in families, many purchasing decisions are made by one household member without consultation with the others. The advertiser doesn’t know who the decision maker is, but at least this person receives the intended number of impressions. Targeting the household without knowing who is watching would result in too few impressions.

Connected TV’s biggest attraction is its ability to reach viewers who are not (or no longer) available through pay-TV or free-to-air TV. But to prove and quantify this capability there has to be unified measurement of all four domains, the fourth being AVOD. And no-one offers that right now.

Andrew Rosenman of Equativ hints at a solution.

The leader of a Russian cybercrime gang has been found guilty by a U.S. federal jury of massive fraud against advertisers. Articles here and here.

While the publisher infrastructure and the media users were both fake, the views were real: bots actually “watched” the videos, so when the playout servers reported those views, they were functioning correctly. This means that measurement has to be based at least in part on objective, independent viewer-side verification; reliance on the server farms alone is insufficient.

This particular gang was careless, working largely out of an office in Bulgaria, which extradited four senior executives to the U.S. The founder bragged about being the “king of fraud” rather than carefully concealing his identity. Russia’s nonextradition of its citizens and its current régime’s evident support for cybercrime were insufficient to save these four, although their coworkers remain out of reach of the U.S. government.

However, although the people who were extradited will now pay for their recklessness with long prison sentences, such crime is still lucrative for someone who pays second-world salaries, and others will undoubtedly continue to commit it, keeping low profiles and being careful not to stray outside their sheltering jurisdictions (which include not only rogue states like Russia but, as to their own citizens, Western countries such as France, Germany, Argentina and others).

Self-measurement based on playout data, unverified at the viewing end, is and will continue to be vulnerable to fraud that can be quite massive. As such, it could undermine the entire economic basis of Internet and other programmatic advertising, including video.

Contact us for details on personall®, our fraud-proof independent ad delivery verification solution.

Addressable advertising is widely discussed in the US and everyone in a position to offer it is already doing so or soon will: AVOD services, YouTube, all connected-TV manufacturers, TiVo, and all major pay-TV operators. At severalfold the CPMs of linear television, it’s easy to understand why everyone wants to sell addressable. So what could go wrong?

Well, for starters, as much as sellers want to earn these multiples, buyers are not anxious to spend them. Some are already using addressable targeting on the Web and in social media, but those are largely different dollars intended to achieve different purposes (typically, much closer to activation than to brand image). And online is full of its own problems: targeting that misses, lack of brand safety, poor context, fraud… Video, especially premium video, becomes where the same advertisers flee for safety, and the arresting wire that stopped the headlong move into online that reached parity with video in 2017 but has abated since then. There is little appetite for sacrificing this alternative, comprehensible world in which for a relatively low CPM your expensively produced ad can be positioned amid equally high–quality programming without risk, without fraud, and on the basis of simplistic but workable demographics and geographics that are how marketers think of their customers.

Furthermore, the current high rates yielded by addressable are based on a shortage of inventory. With most pay-TV operators that don’t already offer addressable soon to offer their capacity in addition to an ever-expanding population of connected TVs and a dramatically expanded range of AVOD services, the shortage is bound to turn into a glut within a couple of years. “Unaddressed addressable” might soon join “dead mall” and “dark fibre” as a memento of previous oversupply by great minds that think alike. Dramatically expanded supply is not feasible against a static demand. Yet the course towards the former has already been set.

So what’s a seller to do if its management and shareholders are expecting to continue to receive 5x linear CPMs in two years?

The most ironic part of the ensuing disappointment: much of the addressable capacity cannot be addressed. On the installed bases of connected TVs and pay-TV set-top boxes, there are no demographics (except the vague location provided by the IP address), psychographics, purchasing data, or even who, if anyone, watched the ad. On OTT services, essentially the same is true, because members of a household typically share a single subscription. The only data available is what the hypothetical people in front of the screen have viewed. But then this is also provided by ordinary ratings, at much cheaper linear CPMs.

Even the viewing data are not a given. Conventional ratings services’ samples are insufficient to plumb very deep into the libraries of OTT services. There are quite a few pay-TV services that have added or are adding addressable capability on set-top boxes that have no return path, so even basic direct viewing data collection from them is impossible.

Meanwhile, addressable overlay advertising, especially on connected TVs, is devaluing the linear inventory it covers up. The advertiser pays to play its ad, the broadcaster or pay-TV channel plays it, but the ad is blocked from many tuned-in viewers by an overlay, interposed by a third party. The broadcaster doesn’t meet its contractual obligation to the advertiser, but through no fault of its own and to an unknown extent. How long can this continue? Nielsen is trying to work with sellers of addressable to adjust its ad ratings in its Nielsen One product, scheduled to start one and a half years from now, but so far, it has just one connected-TV maker and one pay-TV operator, with most of the overlays unaccounted for.

Immetrica has leveraged its expertise (all of us here have worked in audience measurement for years, myself for decades) to create personall®, a passive, mobile-based omnimeasurement system that can measure any audiovisual content, delivered through any platform, played on any device, anywhere. Using a panel approach as recommended by CIMM and the WFA/ANA Cross-Media Measurement Initiative, Immetrica personall solves the addressability problem by making census device-level or household-level advertising inventory personally and demographically targetable. It provides fraud-resistant ad viewing verification. It can show which percentage of your contracted ad delivery actually reaches viewers. And it is designed to be affordable enough to be expanded to large samples, sufficient for meaningful measurement of today’s fragmented viewing.

Contact us to see how we can help you sell your programmatic and addressable inventory.

Nielsen has announced a reconfigured and supposedly extended version of its US television measurement service. The addressable component was previously announced by Scott Brown, Nielsen’s new head of measurement.

This raises questions:

1. Does the ad reporting imply extension of watermarking to ads? The Beet.tv piece seemed to suggest no such extension.

2. Connected-TV measurement of Netflix and Amazon Prime Video is, IIRC, barred by contracts those two services compel the manufacturers to sign in order to preinstall the OTT services’ apps. Thus the measurement of those two is up to PPMs. Why these, sitting on their chargers at home, would be expected to be in range of audio from video sources their panelist consumes is unknown (the household layout might prevent it, or the viewing might be on a mobile screen in another room or another floor of the home). Furthermore, PPMs are available in only 44 of the largest markets, skewed to large and medium DMAs, leaving much of rural USA out and undermining nationwide projectability.

3. Nielsen’s decision not to publish measurement of Disney+ and Peacock, presumably as a result of pressure by their owners, is important in the principle it sets that measurement can be prevented by sufficient money, decreasing confidence in Nielsen’s commitment to OTT measurement as well as its utility.

4. Unless the watermarking has been extended to ads (see item 1), any ad measures that replace C3 and C7 will continue to be broken, as Nielsen’s ability to detect addressable ads overlaying the avail is limited to DIRECTV and Dish Network among MVPDs and Vizio among connected-TV makers. Each group of cooperators is very roughly a quarter of all addressable-enabled capacity in its respective category. This much was clear from the preview announcement. While it can be a useful enabling tool to buyers of these cooperators’ inventory, it is not a solution to the underaddressable shortfall (how many of the guaranteed impressions were not delivered by a linear ad because it was overlaid by an addressable one).

Russia’s and Belarus’s dictatorships obviously have no interest in uncontrolled opinions on the broadly accessible terrestrial frequencies, but what good does similar control do to Algeria and Morocco, where pay-TV can avoid it and is cheap enough for mass use? Another surprising exception is India, where the only terrestrial broadcaster is Doordarshan. Otherwise there’s more freedom of speech than one might think, especially in the less populous and poorer African countries, which are barely enough to sustain one broadcaster.

Here is the digital transition status of terrestrial television broadcasting. Aside from North America, Europe and Oceania, how advanced various countries are may be surprising. And more than a decade has passed since the earliest analogue switch-offs (ASOs); this explains the large differences in spectrum available for 4G and 5G, which to a significant extent consists of spectrum vacated by analogue television.

Recently had to refer to DTT system choices of various countries.

They mostly travel in geographic or national (French DOM/TOMs) bunches. North America, EU, Japan+LatAm, China.

Some countries chose systems different from those dominant in their regions. How much are they sacrificing economically in going farther afield for equipment and expertise?

And how (and how much) are they benefiting from their nonobvious choice?

Colombia, Angola and Botswana (who don’t even border each other), South Korea, Taiwan, Pakistan, Cuba. The four larger and/or wealthier countries (Colombia, South Korea, Taiwan, Pakistan) are of particular interest, because they face larger economic consequences.

The cost of a new transmitter would sticker-shock a novice to broadcasting. So these choices have consequences.

The story is the same all over the world: as analogue terrestrial transmission is replaced with digital, pay–TV penetration declines, in favour of one or more much less expensive OTT services and terrestrial television with the suddenly perfect picture quality enabled by digital transmission and its integrated error correction. This happens everywhere, albeit at different speed. The emergence of connected/smart television sets, at prices only slightly higher than unconnected ones, further contributes to this by giving standalone OTT services a direct pipe to what is often the best big screen in the house.

On top of this, pay-TV proved highly dependent on live sports, and without them during the Covid-19 pandemic it suffered several normal years’ worth of contraction. Not all who unsubscribed will return once the crisis is over and sports and incomes resume.

Cord-cutters are scary enough to pay-TV. But they are followed, as is abundantly clear now, by a generation of cord-nevers, whose members do not understand how one could tolerate watching on someone else’s schedule, or always on the same screen in the same place, or the antediluvian concept of disputes over the remote control. Television has been liberated. It will not be stuffed back into the bottle.

Of course, television distribution is not the only business of these companies. They are usually also the Internet providers, so make money on that even when they lose TV subscribers to OTT and digital terrestrial. And they sell phone service. However:

What are you, as a manager of a well-run pay-TV operator, to do? First, count your advantages and make the most of them. There are a few:

personall® is a smartphone-based comprehensive TV/DVR/VOD/OTT measurement system, able to recognise playout on any device, fixed or mobile. How can it help?

D. A personall panel of a relatively small number of subscribers is sufficient to produce both VPVH and demographics. Your advertising inventory is suddently demographically targetable. This is the simplest solution, which delivers results without any connection to your RPD except through the channel lineup and programme schedule. But why stop there? You can use channel and programming affinity to estimate congruence to the target using scores, Pearson coefficients or other statistical functions. The join to RPD is on the IP address.

Advertisers speak to an individual, not a household. Most purchasing decisions are made by individuals, not households. Besides, households can differ markedly as well (this is hardly a revelation). Imagine two adjacent households (the customer database has the addresses): similar income, level of educational attainment… In one household, soft drinks are consumed voraciously and brand-loyally; the people who live in the other house, however, disdain them and drink mineral water, filtered tap water, and tea. One household has two Toyotas for the reliability and reasonable price. The other is loyal to Volvo for the safety and aesthetics, and because they want to support the company’s working ethos, which includes a reliable social safety net and eschews conveyor belts. The first household has plenty of young children and buys their sundry supplies by the truckload; the other family’s children are teenagers or young adults and they need none. The two households also vacation, dine out, travel and consume music differently. From almost any advertiser’s perspective, they couldn’t be more different. Yet the pay-TV operator’s CRM, which stores their next-door addresses, considers them identical. This insufficiency of demographic and consumption descriptors is what’s holding many pay-TV operators back from making high CPMs in advertising.

B. With personall, you see your subscribing household members’ use of other services, such as your and competing OTTs. You can empirically determine the OTT share of viewing threshold beyond which intervention makes sense.

C. Come fully equipped to the negotiations over retransmission and content. If you have RPD, you already have an idea of the quantity of viewing to channels on your system and some notion of the success of otherwise licensed programming. But this doesn’t directly answer the question: how many subscribing households would I lose if I didn’t renew the contract with channel XYZ? To determine that, you need to know how central is this channel to the utility of your individual service to each viewer in the household. personall® tells you. For example, if a teenager watches channel XYZ 10% of his overall viewing time on the system (indisputably high), but doesn’t use your system much and gets most of his video from Netflix and Amazon Prime Video, he is unlikely to make a big deal of your nonrenewal of XYZ. On the other hand, someone else in the household, of age 65, watches XYZ 5% of her system time and her nonsystem time is zero (she never uses OTT at all). If you take away her XYZ you’ll quite likely lose her to the IPTV service from one of the mobile operators, which promises to make the setup look exactly like cable, and which has no intention of dumping XYZ. And then you have the person whose name is on the bill. She uses XYZ for merely 2% of her system viewing, and watches a lot of Netflix and some Amazon Prime Video besides. But you touch her XYZ and you’ve lost her. It’s the principle of the thing.

A. What if you are a manager of one of the OTT services (most likely from a telco) instead? Your system has individual user accounts, and you even capture some individual viewing from your app on mobile devices. Well, yes and no. Yes in that you are capturing some individual viewing. No in that much of the viewing you’re capturing is not necessarily individual. Most households still contain one, and often more than one, big screen, which offers a different comfort vs. privacy and mobility tradeoff. Do you know whether the authorised users of the account log in and out of their user profiles as you would have them do? What if they leave the app on the connected TV logged in on the same user profile, to minimise effort and get the benefit of autocontinuing playback separate from their personal devices, on which they watch other content? Of course you are concerned by the revenue impact of password sharing, but you understand that overtightening the screws on “TV everywhere” would undermine one of the foundational ideas of its existence. So you don’t do that. And that leaves you with unreliable user profiles, and thus in exactly the same bind as pay-TV operators: doubtful individual attribution and no demographics other than the address.

You haven’t been able to rely on the currency services because their samples are too small to be relatable to your subscribing household base, and because they cannot measure parts of your operation (VOD, OTT, mobile). But now you can rely on someone. This time, it’s personall®.

Addressable is growing through the proliferation of connected TVs and mobile viewing, and soon overlay ads on at least some MVPDs such as Comcast. Some forward-thinking channel operators might expand the avails beyond the MVPDs’ contracted insertion (barter) minutes, notably Comcast-owned NBC. Comcast also owns Sky UK and Thinkbox, the UK commercial broadcasters’ interest group, is interested in addressable, which is beginning to appear throughout the industrialised world. The objective for the advertiser and the media agency is to target with the precision promised by online but with the quality, brand safety, more favourable economics and greater scale of television/VOD/OTT.

Our Immetrica personall®, any-platform, any-device audiovisual audience measurement system can be used to calibrate addressable advertising, which is available at increasing scale but has no individual viewer identification, aside from IP addresses which are often too imprecise to indicate socioeconomic class. In combination with first-party and third-party data, Alldience, which measures the viewing of individuals, can determine the viewing affinity of the persons—not households—that make up your target audience. You can then target them with addressable spots with a high degree of confidence, and in some cases even buy nonaddressable inventory at lower cost in the programmatic-linear or conventional market.

I’ve noticed two changes to the presumably targeted advertising I see online from a US point of view during the Covid-19 crisis:

Relevance, never very high, has dropped to none; and

Well-known brands have disappeared entirely except very brand-safe sites such as newspapers’, where a few companies in a few industries still keep going.

Oddly, none of the "we care" genre reaches me.

Political advertising, which had been at a squint at least remotely plausible as congruent with my sentiments, has now been supplemented by ham-fisted intelligence-insulting calls to atavistic action by far on the other side (though not as far as it goes). Both types of ads are displayed to me on the same days and the same sites. What use are Facebook’s gigabytes of data on an individual user if they cannot even prevent this?

Immetrica software engineer Dr. Aleksandra Rudnitskaya, whose demographics and media use differ markedly from mine, reports that “everything disappeared except for traditional stupid ads for something I…already bought”.

We know that viewing is becoming ever more individual. Viewing with other people might be a minority of all viewing sessions, and probably does not involve more than two members of a household of three or more. I say “might” because there’s very little research into these dynamics.

Much of the available data are at household level (if they even get that far; connected TVs and some RPD STBs are poorly projectable to households, and almost invariably are not so projected even where they can be). Thus even with individual attribution, which is really ascription, the fallacy that purchasing decisions are collective is maintained.

The reality is almost certainly that few buying decisions are truly made collectively. My hunch is that they mostly concern big-ticket items. Some decisions, on food, leisure/travel, etc. are subject to strong personal influence, but that’s not the same process as an open democratic forum in which no-one is motivated to dictate to the others.

Isn’t there therefore a misalignment between audiovisual audience measurement data, which are really household-level at heart even if run through attribution algorithms, and buying decisions, usually individual and of prime concern to advertisers?

Our state-of-the-art audiovisual audience measurement system, personall, available integrated with eCGlobal Research Solutions’ Latin American panels and advertiser services as Alldience, has passed rigorous testing and is ready for deployment anywhere.

personall / Alldience can measure any content with sound played on any device and any platform, classic TV, DVR, VOD, OTT, Web, app, social media, outdoors, fixed or mobile.

personall® has specific applications for broadcasters and pay-TV channel operators; advertisers, marketers and agencies; pay-TV system operators/MVPDs (enabling advertisers to target your advertising inventory on an individual, demographic basis, and you to prevent churn); OTT system operators; public broadcasters; and radio.

Our outstanding quality, based on 33 years of experience in audience measurement system development in combination with one of the world’s finest ACR systems, is also among the most affordable solutions.

As advertising and marketing budgets are necessarily reduced in the aftermath of the Covid-19 crisis, can we help you?

“Netflix has just known a ca-ta-strophic day on the stock exchange”, losing $15bln, 12% of its market cap, after its first-ever drop in US subscriptions. —Sacha Daout, 19h30, RTBF, Belgium

It has been clear for years that the economic case for Netflix was not firm even when beheld at a squint. But this rather forces the reckoning into the present moment. The wall in front of you might be closer than it appears and moving faster.

If Netflix is seen to fail, and I don’t see how at least its worldwide original content could survive, it will be a terribly chilling effect on originals, at least in many linguistic groups at once.

personall, developed by Immetrica, and Alldience, which adds eCGlobal’s capabilities, can measure any screen, anytime, anywhere using smartphones. The smartphone is on or within reach of most people who have one, most hours of the day; it is the closest practical approximation to the often–quoted ideal of one Nielsen client of a measurement device implanted in the sample member. Furthermore, a double-digit percentage and increasing share of viewing is done on mobile devices, mostly invisible to conventional measurement technology—but not to personall / Alldience, where the measurement smartphone is either also the playback device or close to one.

When we set out to design this system, we confronted one problem that was conceptual rather than technological: the inadequacy of the intab definition. The intab is the cooperating part of the sample. Most viewing and listening measures are fractions in which the intab is the denominator (as in a rating), or an element of it (as in a share). The required degree of cooperation varies from a few minutes to almost the entire reporting day, but whichever it is, the intab varies directly with the sample size.

One of Shakespeare’s best-known scenes is at the end of Henry V, where two armies have, with few exceptions, killed each other. Such events might not make sense to civilians, but they have occasionally resulted in the achievement of one side’s objectives. The real Henry V did win the Norman territory he regarded as his birthright—temporarily.

Enter Netflix, a frightening behemoth that levels pay-TV giants all over the world with its cheap subscriptions and compelling programming, some of it original and exclusive. Cord cutters and cord nevers in one country after another either rely on streaming exclusively or in combination with digital terrestrial broadcasting with its near-perfect signal quality. Much of the streaming is Netflix. It is verily scorching the earth, and unlike Henry V, it’s doing so unilaterally.

But all is not alright in the monster’s lair. The company is 22 years old. Shareholders and investors have acquired the silly notion that it’s old enough to meet expectations of a mature company. Instead it continues to have an astounding burn rate and has no obvious means of escape: even if it raised prices and/or increased market share transcending any realistic expectations, it would still take decades to break even. The notional Wall Street is tired of waiting for the adult that still behaves like a child.

Netflix’s actions and statements seem to militate against reality. It is raising new funding which, however, won’t even last it a year. And it predicts its burn rate will peak this year although heretofore it has been growing, and at increasing rates.

In fairness, no-one has tried to do what Netflix is doing: to become a provider of programming and a producer of much original programming to most of the world, all at once, and to do so at affordable prices. An effort such as this is bound to be expensive. And if it could only keep growing at the current pace a few more years it would at least stop losing money. But competition is growing (Hulu’s international expansion is just starting), access to third-party programming is shrinking in the US and will likely do so in the highest-income countries as well, and its ability to raise prices is dampened by competition and local economic reality. It can cut back investment in original programming, but that might be counterproductive (or not) by removing a motive to subscribe or keep subscribing. It can introduce advertising but ditto. So the possibility that Netflix will die having killed many others is no longer hidden behind the horizon.

Particularly relevant to this blog is the audience measurement aspect. Netflix has until recently avoided any external disclosure of its own measurement, save for a very few tidbits dripped onto the press. This has raised the fame of its ratings of its own service to the level of unobtainium: although no-one outside the company knows whether it’s even any good, almost everyone would like to see it. It has recently started sharing limited data on its US viewing as Nielsen started measuring it (Nielsen also has an agreement with Hulu and measures it and Amazon Prime Video). This seems to have been a defensive move as Netflix’s numbers, at least for some of its highest-profile original programming, are higher than Nielsen’s, and thus serve Netflix management’s interest (to show that its investment in this content is rewarded with viewing).

Netflix is apparently breaking with convention in how it reports its numbers. It uses cumulative audience (reach) rather than average audience (the audience at a given moment of the content, across all views in the reported time interval). Nielsen offers cumes too, but carefully deduplicates them; it’s unclear whether Netflix does, and the fact that the numbers it does share are substantially higher suggests it might not (so what it’s actually reporting is gross impressions at one per show, which would be a strange and misleading measure to use here). Beyond such ruminations is the algorithmic and technical design of Netflix’s audience measurement system itself, which remains a black box, probably unseen by anyone qualified who did not create or curate it.

Unless Netflix is brazenly lying about its numbers, the possibility arises that they are nonstandard and thus too high, that management cannot understand this, and is therefore overpaying for its top external content. Another effect is also possible, and would explain why Netflix has historically regarded its audience measurement data as a trade secret: its subscription pricing suggests that, while it might be overpaying for a few high-profile third-party properties, it probably underpays for most. There’s simply not enough revenue for everyone to be paid equally relative to audience—the same problem faced in sports leagues with salary caps, which harms all players except perhaps the stars. So far, Netflix has been able to shut down any third party that tried to measure it, loudly claiming those numbers were wrong, without proof. It tried to do that to Nielsen, as well, but must realize it cannot win in a credibility contest with the leading name in the ratings industry. Had Netflix not been thus undermined, then, rapidly losing its ability to offer its investors an exit strategy, it could be expected to hang on to every perceived advantage as long as it can, including keeping its data away from content providers who would use it to force higher rates. It is still expected to do so in countries where it is not exposed to third-party measurement. As in the case of Uber, another tech company without evident means of escaping eventual fiscal doom, the fact that competition based on profound lossmaking leaves a scorched-earth battleground of dying competitors, doesn’t help the disruptor much in the end.

It is all the rage for fashionable content owners to set up their own streaming services. First came CBS AllAccess with original programming premiered only on it, then Disney announced Disney+ (entertainment focused on children) and a separate service for ESPN, both of which would offer exclusively programming that would be withdrawn from Netflix and other third-party distributors, in January Comcast/NBCUniversal has announced a service with exclusivity on some programming, and now AT&T has announced that Warner Studios series such as Friends, The Office (US version) and ER will be pulled from third parties and offered exclusively on its new three-tiered streaming service, to be launched next year (it already operates three, which will be subjected to some rationalization). Original programming of company’s HBO unit has always been exclusive to its own streaming services.

When the same week as AT&T’s announcement, its Warner Bros. movies were downgraded from 4k to regular HD on iTunes, some thought this was a quiet and immediate imposition of a milder version of exclusivity: one could still use the content but not as well. As the MacRumours story suggests at the end, this seems not to have been intentional. Especially as it affected the entire Harry Potter series of feature films, which does not make sense as an exclusive on an AT&T streaming service because its audience is very far from overlapping. But the withdrawal of so many big turtles into their shells does feed the assumption that the downgrade was intentional.

Exclusivity doesn’t make sense if you can monetize the demand for your content more fully by permitting its distribution by others. Disney can go it alone, at least in the US, because it can be reasonably sure that most customers will follow it to its new platform, for both its sui generis entertainment programming and for ESPN with its exclusive sports rights. Few others can assume they can leverage such loyalty. But brinkmanship in negotiations over money will only increase in the near future, and when talks break down a downgrade might seem temporarily (while regular HD is not seen as tantamount to no service) attractive alternative to a complete outage of that content on the distributor’s platform. It might not suffice, though (the lower resolution might not be enough of an impediment to use, neutralizing the content owner’s main weapon).

I rather expect that AT&T is fooling itself when it assumes its high-profile ex-NBC series give it the market power on which Disney is relying. The proliferation of content-owner streaming services with exclusivity on the owned content—disaggregation—raises the cost and complexity beyond the tolerance of most viewers, and something will give. The lesser content will fail first but almost every player will be hurt. As the antivaccination movement shows, a few ill-advised decisions can spoil it for everyone.

“Traditional Pay-TV Squeezes More Revenue Out of a Declining Asset”, writes MIDiA Research.

Yes, squeezed more, just barely, and probably because around a couple of percent of advertising spend was relocated this year from online to TV by advertisers unhappy with the quality of targeting online.

But it’s the last gasp. The NFL has seen lower ratings because it’s been less interesting lately (in the opinion of those who would know the difference, of whom I’m not one), but it remains a major national sport in the US, and it is headed to SVOD/OTT with the lower-value prescheduled evening fixtures first. The more interesting, dynamically scheduled games currently on Fox and CBS will surely follow.

The league’s thirst for cash has demanded an ever more increasing subsidy from broadcasters and pay-TV operators even as margins permitting them to pay this subsidy have become static or started declining. As Margaret Thatcher warned early on in an argument against tolerance of inflation, it is easy to end up pricing yourself out of the market.

Facebook’s announcement of a change to the newsfeed selection algorithm in favour of personal-network posts at the expense of posts from businesses was greeted with hysterical headlines such as “RIP Facebook News Feed for Publishers”.

Business/brand activity on Facebook will show up less, not be eliminated entirely. It will certainly not RIP; Facebook has jealous shareholders now and is not becoming noncommercial. Currently businesses are enjoying a free marketing ride on Facebook, and in so doing they reduce Facebook’s utility to the owners of the very eyeballs they’re after: a contemporary version of slash-and-burn agriculture that destroys the ecosystem it uses. The algorithm changes will reduce the extent of such poaching. And some portion of businesses’ activity will probably be redirected into paid advertising. This could meaningfully enhance revenues even if only a small portion of current business activity becomes paid.

What we haven’t seen so far is an acknowledgment of the negative effects of the current complex wall/newsfeed content selection algorithm. Since its introduction, the newsfeed has become unpredictable: reload and you’ll see a largely different selection of posts, so you can never be sure you’re fully caught up on those from even the sources most interesting to you. The feed sequence is frequently interrupted by repetitive promotional messages from Facebook itself. And there’s no escape: changing the few available configuration parameters has little effect.

Users’ lack of control also harms the utility of Facebook and the common weal by downranking news organisations, which post extensively to social media in efforts to keep themselves vital and relevant, and in so doing keep us supplied with information despite, for many newspapers in the US, negative margins. They may post news free of charge to readers to promote themselves, drive subscriptions and keep their heads above water, but they’re not able to spend to push news stories as paid advertising; that’s a nonstarter, and a dangerous one for the country at that. If I cannot instruct the Facebook algorithm to maintain the prominence of, say, The Washington Post and Science Alert in my newsfeed, the feed loses much of its utility to me, and this perforce looks like someone has decided that he knows what I want better than I do. That, perhaps unintentionally, propels us right past the point of evil (as in Google’s “don’t be evil”) and into ideological totalitarianism. The end result is likely to be the decline of the social network in favour of another, as has happened many times before (to Compuserve, Delphi, AOL, MySpace).

It’s rather obvious now that nonconventional (nonlinear, non-DVR) television will account for a large share of viewing even in markets in which it doesn’t already. South America is expected to grow to almost 16% VOD/OTT penetration by 2021 (apparently excluding DVR integrated into pay-TV systems), with the other lagging countries and regions, such as Japan and South Asia, exceeding 50% by that time. Some pedestrian thoughts on what this means.

• Broadband is VOD and OTT’s partner in a virtuous cycle: it both enables them and is made necessary by them.
• With technologies such as fixed 4GLTE and others in development, broadband could be deployed at infrastructure costs well short of the monumental expense of burying cable, especially under established cities. The same advance—inexpensive deployment, and also driven by a “killer application”, earlier enabled cellular telephony across much of the third world, out of all proportion to local economic strength, usually vaulting entirely over wireline telephony.
• DBS/DTH (unless integrated into a broadband or mobile offering) has little place in this model and is thus probably moribund or subject to massive contraction. The need for broadband eats into disposable income that also would fund DBS, and the need for DBS is diminished as content becomes available on cable or standalone VOD/OTT. As major sports components in the wealthiest countries fall like dominos to standalone VOD/OTT distribution (such as ESPN in the U.S.), the sole advantages of DBS providers might be the last few exclusives (typically major sports events) and customer service. That is unlikely to suffice for continued economic viability in ten or twenty years.
• Conversely, cable tied to broadband delivery, in which the extra cost of television service is modest, may prolong its life. It will feed the need for conventional TV use that many viewers still have (an aging cohort, sure, but quite young on average). The questions for many viewers are the availability of major sports events, the extent of the VOD selection, and the extra money spent in addition to the broadband-only price.
• Television is headed towards a smaller but higher-value selection. This has two motivators:
• One is subscribers’ interest in paying only for what they use rather than hundreds of channels they don’t want. This is served by either services like Netflix and its local workalikes with very broad selections for a very low price, or more expensive services like Dish Network’s Sling in the U.S. with a limited or subscriber-controllable selection of channels. In the first case, stuffing of low-local-value U.S.-targeted content into services in other countries, currently a large portion of multinationally offered programming in which all U.S. studios engage, is economically insignificant; in the second case, it’s not even there.
• Then there is both OTT providers’ and pay-TV channels’ need to stand out, generate buzz, differentiate themselves from the competition. They have all gravitated to the the poor (anyway, resource-limited) man’s route to world domination, which can be fairly called the Motown Records approach: pick a few star properties and pump all your production and promotion money into them. That’s what we’ve been seeing from Netflix, Amazon, AMC, even the Travel Channel, and it has worked very well in the U.S., generating more interest in any non-premium-channel content than there’s been in many years.
• Many or most countries already have incumbent, local OTT services, for whom it is natural to defend from the onslaught of foreigners (Netflix, Amazon Prime Video) by using their strength in local content. The tactic is the same for the other side: criticised broadly for undertaking its international invasion on the strength of little non-English-language programming and insufficient rights to use what it had in its new countries, Netflix is planning to invest in locally targeted and produced content. Previously, Twentieth Century Fox as a feature film distributor has successfully become the first U.S. player to do so on a substantial scale, so the model can work. This would reinforce the potential for the medium to evolve from a steamroller of globalisation and boob tube into a culturally sensitive, appointment-viewing, dare one say, art form.
• As recently covered here, advertisers have tried to throw much of their money at targeted Web advertising and were largely unsatisfied, because of poor targeting, lack of independent auditing, and possibly other reasons. This means that there are advertising budgets in search of appropriate vehicles. At the same time, as also recently mentioned here, there are no guarantees of profitability for everyone as the supply side of the content market reconfigures, or even when it settles down, because the new model will be subject to different costs and revenues. Can standalone VOD/OTT providers attract advertising by targeting better on the basis of the usage patterns they see from specific user accounts? Will a market more accustomed to conventional demographics accept such indirect indication? Some OTT companies (Netflix) may be as unwilling as HBO to accept advertising, but for others whether, how much and in which format they play ads may depend on the money they stand to earn—and how much they are willing to risk user displeasure.

“In 2015 worldwide TV sales fell by 11%, young people watched 10 minutes less television a day and in the US research showed that 62% of adults watched online video every day.” But viewing on other screens more than compensated. Euronews article.

The TV sales drop speaks loudly: the continuing increase in population and much faster increase in sufficiently wealthy population, the change from analogue SD CRTs to digital HD flat panels, and the dampening of demand cyclicality by the desynchronization of the economic cycles of various countries from each other should all have caused a substantial increase in sales. Eventually the diminution of conventional TV will reach even parts of the world where it is relatively minor today.

It is facile to say that viewing will shift to different sources or screens. The more interesting question is the economics. How many independent OTT services from channel operators can be sustained separately from each other or in substantially à la carte models like Dish Network’s Sling? And if they cannot, and must rely on aggregators like Netflix and Amazon Prime Video, will the low pricing deplete revenue until the more popular programming cannot be paid for? So far, both traditional broadcasters and the OTT aggregators have adapted, but this does not mean that they always will. At some point there might be a shakeout just as macroeconomics predicts (easy market entry leads to minimal profits).

Multichannel News has an article (“It’s Time to Get the Return-Path Data Together”) by Jane Clarke of CIMM on the complementary nature of audience data from STBs (set-top boxes) and smart TVs piped through ACR (automated content recognition). Generally, it’s a good idea, but some significant qualifiers come to mind:

Just as Internet advertising reached spending parity with television, large advertisers started doubting its effectiveness and cutting back, writes Nicole Sinclair in Yahoo Finance (“Digital ads aren’t working for big consumer brands”). She lists two developments last year: a study that claimed the existence of rebates undisclosed to advertisers (kickbacks under another name) from media operators to advertising and media buying agencies (although not specific to Internet media), and Facebook’s admission that it included video views of under three seconds, exaggerating the overall viewing it reported by potentially as much as 80% (whatever that means). The article cites reductions in Internet spending by large consumer goods advertisers of, at most, 1.3% this year. Not much, perhaps, but the direction, after years of unremitting growth, should give pause.

Individual advertising delivery cannot be measured by sample, but only by a census. This currently can only be self-administered by the carrier, and that has a credibility problem inherently, not just because of abuses. When chief executives of the half-dozen remaining global ad and media buying agencies, like Martin Sorrell of WPP, say that “the player and referee cannot be the same person” and the media operators should not “mark their own homework” (a phrase heard a lot lately), their companies presumably cannot then initiate the spending of large portions of clients’ budgets on such media. Can targeted digital advertising survive the lack of objective verification, never mind transparency of targeting decisions?

Furthermore, even objective reporting and realistic standards (unlike Facebook’s deeming of a video view any exposure longer than three seconds) might not rescue targeted advertising on the Internet. The current crop of targeting algorithms is rather obviously useless, with much irrelevance and ad nauseum repetitiveness of ads (often from an inappropriate competitor) for purchases already made. This is so despite cookies and tracking by the likes of Facebook. On Facebook itself, the problem is different—the complete irrelevance of most advertising messages—but it still means inappropriate expenditure in which advertisers pay high CPMs for targeting but get, at best, scattershot outdoor billboard delivery. Can targeting be seriously improved in a short time?