The Price Point | Impressions-Based Advertising Long Overdue

Back in 1950 when Arthur Nielsen introduced television ratings, little could he have known his basic methodology of panel sampling would still be in use almost 70 years later. Nielsen’s real brilliance was not in methodology, but in persuading ad agencies to accept his household measurement system as the only legitimate industry standard.

Working with agencies, it did not take long for Nielsen to create the demographic model of buying and selling that is still in use today. From the beginning, the model was fatally flawed. What buying habits does a 25-year-old woman have in common with her 54-year-old mother? What 18-year-old woman will live the same lifestyle at age 49?

During the years when television owned in-home entertainment it was to no one’s advantage to question the system. Demographic ratings created a workable framework for measurement and post-buy analysis. If a buy “posted,” everyone was happy. Was the right amount of weight placed on the right stations?  Television advertising has always worked, so the question was not asked.

Fast forward to today. We live in what is quickly becoming an attributable world. American consumers have chosen to trade privacy for convenience, willing to have every aspect of their lives tracked, measured and analyzed. The recent revelations that personal digital assistants are hearing far more than we bargained for has created no outcry, no calls for going back. Perhaps they will further urge Congress on to an eventual breakup of big tech, but that just means even more people will be listening.

Ad agencies have chosen to deal with today’s world by assigning different buying units to different kinds of media. Competing measurement systems have created walls within agencies. This is not in the client’s best interest and possibly contributes to what a recent ID Comms report calls a “complex headache” on the part of many clients.

Headache is also an appropriate word to describe today’s television ad executives whose arsenal includes traditional television, mobile, web, OTT, third-party and a host of other audiences. How does one make sense of different platforms in a way that benefits both the buyer and the seller? Without the ability to use a common currency, no one can see the overall picture.

All of this is why the Television Bureau of Advertising’s announcement of an industry move to impression-based advertising makes so much sense. The coming transition to ATSC 3.0 puts television on an equal two-way measurement footing with other digital media. The move is both logical and necessary. Converting ratings to impressions also highlights the incredible efficiency television brings to the table.

With major broadcasters and networks standing behind TVB, the pressure is now on advertising agencies to also modernize their systems of measurement and buying. Change is hard, but the move to a single currency is critical to client success.

Impressions-based advertising will not be the last word in consumer measurement, but it is an important transitional step to the future. In a few years we will look back and wonder why it took so long.

This is one in a series of occasional columns from Hank Price, a media consultant, author and speaker. He is the author of Leading Local Television, a handbook for general managers. He spent 30 years managing TV stations for Hearst, CBS and Gannett, including WBBM Chicago and KARE Minneapolis. He also served as senior director of Northwestern University’s Media Management Center and is currently director of leadership development for the School of Journalism and New Media at Ole Miss.