Outlook insights Hot Topics

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1 Outlook insights Hot Topics Melding what people watch to what people buy...can unlock a treasure trove of insight for media companies across the ecosystem

2 Melding what people watch to what people buy...can unlock a treasure trove of insight for media companies across the ecosystem Audience measurement: the download Online advertising has been winning market share from traditional broadcast advertising on the strength of its greater accountability and wealth of detailed data on user behaviour and engagement. But now TV is fighting back, with innovations in audience measurement based around analysing return path data (where available), social listening, and new aggregated insights into agency spend. The new data also enhances pay-tv service providers ability to cross-sell and up-sell services to subscribers. Future innovations in audience measurement will depend increasingly on industry collaboration, to provide advertisers with credible, comparable data for buying decisions. In October 2014, Malaysian pay-tv service provider Astro announced a major step forward in its audience measurement. The company has teamed up with Kantar Media to design, deploy and manage a proprietary measurement system that would break new ground in the Malaysian TV market. Using return path data (RPD) research techniques, the system enables Astro to collect data from its subscribers set-top boxes, and measure and then provide analysis of standard-definition, high-definition, time-shifted, videoon-demand and interactive television viewing. The system would also enable the gathering of detailed information on advertising spots across the TV operator s entire subscriber viewing base. This move is just one example of an escalating trend in the pay-tv industry, as broadcasters globally look to take their audience measurement to new levels of granular insight. In future, this is a development that will be critical to the sustainability of the traditional broadcast media, as it battles for eyeballs, ad dollars and transactional revenues with online competitors. Closing the gap with online audience data To explain why advances in audience measurement are so vital, we first need to look at the factors behind the ongoing headlong expansion in online advertising. A key driver of this growth has been the accountability and wealth of data enabled by Internet (including mobile) delivery with companies able to measure everything people consume, do and engage with online in minute detail. Initially, this capability left audience measurement in broadcast lagging well behind, and relying on outdated measures that lack the depth and detail sought by many advertisers. As agencies and advertisers worked out how to capitalise on the richness of audience data and insight available from online media, their ad dollars followed the data, migrating steadily on to Internet platforms. is a strategic imperative for traditional media The result is a strategic imperative for traditional media to improve their audience measurement, by extending beyond traditional metrics around reach and frequency to measure engagement by individuals in the context of their wider lifestyles and behaviours. Pay-TV companies in particular are now rising to the challenge, fighting back against online media s richness of audience data with a range of approaches, of which return path-based measurement systems are an example. Audience measurement

3 Article subsection The increasing richness of audience data strengthens pay-tv operators position in the race to secure advertising sold in traditional ways. Astro is far from alone in leveraging the pay-tv return path. In Australia, Multiview s 100,000-home audience panel uses Foxtel s set-top box to capture viewers programming interactions through RPD. Other players developing comparable approaches across the world include Sky in the UK, AT&T in the US and Starhub in Singapore. Crossing this information on programming interactions with demographic, income, consumer behaviour and product usage data can generate deep granular insights for advertisers into viewers behaviour. This increasing richness of audience data strengthens pay-tv operators position in the race to secure advertising sold in traditional ways. And as a rising proportion of advertising moves towards programmatic purchasing and realtime bidding, the data derived from the return path will give pay-tv a clear differentiation from the terrestrial freeto-air players. The new depth of audience data is also providing additional benefits beyond advertising revenues. This is because it enables broadcasters not just to demonstrate their unique value proposition to advertisers, but also to transform their understanding of their own subscribers and thereby enhance their ability to cross-sell and up-sell services to them. Our experience shows that these ancillary benefits can actually be critical to the business case for investing in new audience measurement, since the investment may often not be justifiable on the basis of higher ad revenues alone. Social media: broadcasters are listening However, other innovations in audience measurement are bringing opportunities to improve audience measurement even to those broadcasters without a return path. These advances include the ability to capture and quantify social engagement, by using social listening tools to monitor and measure audience responses and exchanges on social networks. The power of these tools which include the Nielsen Twitter TV Ratings is underpinned by the fact that social media provides a fantastic way to capture people s previously inaccessible and unmeasurable watercooler conversations about TV content, irrespective of how it s consumed. Across the world, traditional media content features very highly in conversations on social media, and specific programmes like Game of Thrones are often among the items trending on Twitter. So social media listening is enabling broadcasters to change the currency by which advertisers buy, by measuring from a cross-platform perspective the depth and breadth of engagement that make mass-consumed television content valuable to them. A further trend that s gathering pace and strengthening traditional broadcasters insights and positioning in the advertising market is a shift towards collecting and aggregating media agency data. Services are now available that take booking information from large media agencies, and tag where the ad dollars are being allocated across the various channels to show who s getting what share of the pie. Driving future measurement innovation: industry collaboration will be key While advances in audience measurement are now gathering pace, they ve taken longer to build momentum than many observers expected and there s still some way to go before they become pervasive. The relatively slow progress to date partly reflects broadcasters initial wariness over the danger of swapping analogue dollars for digital pennies, and partly the fact that any player that goes it alone with new measurement techniques risks being seen as self-serving unless the rest of the industry moves the same way. Outlook insights: An analysis of the Global entertainment and media outlook:

4 The fact that advertisers take a sceptical view of any proprietary currency offered by a single media owner is understandable. However, aside from the risk of the measures being selfserving, the scepticism actually has as much to do with the inherent complexity and subjectivity issues stemming from the need to de-duplicate the population across different platforms. There are also challenges around maintaining a common method of audience measurement across platforms, reweighting samples for bias correction, and attribution or panel qualification. Largely as a result of such complexities, there are doubts over the first-mover advantage in this area. And while new tools provide broadcasters with opportunities to gain competitive advantage through greater richness of audience data, this is unlikely to translate into a new currency by which advertising is bought and sold unless the entire sector contributes. Also, to capture the true value for advertisers, the measurement needs to cross all content platforms linear, catch-up, online, mobile, indeed wherever people are consuming. Given these dynamics, PwC s view is that future advances in measurement to create a genuinely new advertising currency will require collaboration between the players in various markets, to provide credible and comparable industry-wide measurement data. There are examples of where this is taking place, such as in Australia where OzTAM the official source of television audience measurement (TAM) has launched a project called audience measurement diversification, and is looking to engage a global measurement company to provide platform-agnostic views of shows. This will help to tackle issues such as audience duplication, by clarifying whether it s one set of eyeballs watching the same show multiple times. Other bodies such as NBTC in Thailand and MDA in Singapore are also pursuing similar goals. Outside of broadcasting, these same developments also bring opportunities for outdoor media to provide another layer of measurement. Once outdoor and mobile devices are connected, they generate fantastic data that tracks people s responses as they are propelled to act. And with both broadcasting and out of home, there is the further potential to link in to consumers actual purchase transactions, whether online or in-store the acid test of advertising effectiveness. In TV, audience measurement is finally starting to catch up with advances in content delivery. But the journey is only just beginning and collaboration will be vital if TV is to truly take advantage of the shift of its viewers online. 10 questions to ask: 1. As a TV broadcaster, are you finding that the current audience metrics you provide to advertisers are meeting their expectations? 2. If you have a return path, are you using it to generate and collect customer information for analysis, in order to create data for advertisers? 3. How do you currently measure engagement, as opposed to reach and frequency? 4. Do you use social media listening to track engagement with your shows? 5. Do you use audience cross-platform data to support cross-selling and up-selling of services as well as advertising sales? 6. Do you access aggregated media buying data to check and manage your market share? 7. Would you be prepared to collaborate with others in the industry to drive greater standardisation in audience measurement? 8. As a media buying agency, do you aggregate your buying data with others to gain a clearer picture of the market? 9. Do you feel the audience measurement information you currently receive from broadcasters is sufficient to make fully-informed ad purchase decisions? 10. Is data on consumer social engagement factored into your buying decisions? Audience measurement

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