Managing Complexity: 2023 Conference summary (part two)
In this second of two articles, our Research Director Richard Marks looks across the three days of our 2023 conferences in Nice to highlight some of the main themes and reflect on the current direction of travel for media and its measurement.
Media owner business models are converging
In part one of our conference overview we identified a crisis in the terminology used for media measurement. Whilst it would be going too far to say that there is a similar crisis in the way in which we categorise media itself, it can be argued that it is increasingly difficult – and potentially misleading – to attempt to neatly put media platforms into categories like SVOD, AVOD and BVOD. The global streamers are chasing sports rights, launching curated linear channels and offering ad-subsidised tiers. Conversely, broadcaster platforms like ITVX in the UK are adopting VOD-first strategies and offering subscription ad-free options. Business models are blurring and converging and we may now be in danger of regarding defining media owners in terms of what they used to be, not what they now are. Younger viewers will be approaching their viewing choices without the ‘baggage’ of knowing the origins and history of media owners, so perhaps we need to be careful not to apply these strait-jackets as well.
Economic gravity is setting in for the global players
Meanwhile, media analysts like Ian Whittaker are highlighting that global growth of ‘SVOD’ is plateauing and economic reality is starting to set in, with the need to raise subscription prices in an already challenging environment and to significantly reduce programming expenditure. This new reality may lead to a more even playing-field between regional broadcasters and global players, with the latter demonstrating a growing interest in regional productions both to attract new subscribers and lower production costs. It is also seeing the global players starting to move away from platform exclusivity to maximise the return on their content investment, adopting adaptive windowing strategies.
Understanding content performance is more important than ever
As a result, the importance of measuring content has never been higher, with an increasing imperative to make the right decisions about commissioning, scheduling and platform strategy. NBCU is conducting a symphony of many different data sources to truly evaluate the importance of content, whilst the BBC is also using innovative analysis to understand the long-term performance of content in a hybrid world of VOD and linear. Parrot Analytics guages audience interactions to attempt to identify the direct financial contribution of properties like HBO’s Succession to media owner’s bottom line.
Measuring content is vital. There can be a tendency to focus on the use of measurement predominantly as a currency for media planning and trading of advertising, guiding billions of dollars of planning decisions and transactions. It is essential that measurement delivers on that goal, but it should not be the sole focus and, in many markets, the main revenue source for television comes from the direct monetisation of content itself: from subscriptions, license fees, content and format sales. Consequently, systems focused solely on ad tracking and outcomes are of limited use.
Equally, as various presentations across the three days highlighted, measurement of content is vital to understand the impact of the advertising itself. Whether we are talking about attention or the perceived value of premium TV, measurement systems that do not measure the context in which ads are placed are in danger of commoditising television and dumbing down media planning.
First party data meets privacy measures
Whether we are evaluating content performance or advertising effectiveness, the use of first party data is becoming the norm. This takes primarily two forms: first party data to enhance audience measurement itself (CTV data, server data, return-path data) and its use in combining sales/customer data with viewing data to evaluate effectiveness and measure outcomes. ITV’s energetic presentation at the conference showed a commitment to building data partnerships to demonstrate advertising effectiveness, with an emphasis on outcomes rather than just reach.
An increasingly high-profile element in combining data sources is likely to be the use of clean rooms. Meta explained a number of approaches to PET (Privacy Enhancing Technologies), which take account of a new world of privacy legislation and cookie deprecation, and clean-room approaches like that outlined by InfoSum clearly offer opportunities to combine data sets in a privacy-safe way. However, as Milton Data highlighted, there are still risk factors that need to be evaluated, primarily the level of match rates that are possible between two overlapping data sets and the degree to which potentially vital data inputs become reclassified as PII (Personally Identifiable Information) as privacy legislation expands.
Is big data’s role to enhance panels or vice versa?
One of the highlights of this year’s asi was the opportunity to hear directly from the new CEOs of Nielsen and Kantar Media, Karthik Rao and Patrick Béhar. One point that both were keen to stress was the evolution of their businesses into providing hybrid systems ingesting many sources of data. However, both asserted that panels remain absolutely vital in turning devices into people and to track audiences across platforms and walled-garden data sources. That certainly reflects the direction of travel at asi conferences over the last decade in which – after some initial doubts at the start of the ‘big data’ era – the key role of representative panels has been reaffirmed. However, far less clear is the direction of travel for the data itself. Put simply, is big data there to enhance the precision and accuracy of panels, or is the primary role of panels to calibrate and ‘personify’ big data?
This is a vital question, because the costs involved in building a high-quality passive panel involving people meters and router meters are significant. Such a panel is more justifiable if sitting at the heart of the system, but arguably less so if it is merely a cog in a larger wheel; a midwife rather than the newborn itself.
Either way, this places the emphasis even more on the need for innovation in media measurement, examples of which we saw throughout the conference. For example, Hyphametrics has moved away completely from using audio-based detection techniques like ACR to picture detection with the aid of AI.
Can radio measurement leverage passive panels to make the leap to new ways of selling and trading?
The perceived importance of passive meter panels also played a central role in the debate during our radio and audio sessions. An increasing number of markets are adopting passive panels – variously described as portable meters, wearables or phone apps – as an element in hybrid systems. This has been driven in part by industry demand, the challenges of measuring digital services and the increasing difficulty of sample surveys exacerbated by the pandemic.
Meter panels are now in the mix in Australia and the UK, but are not particularly high in that mix. Used primarily for calibration and insight, in both cases the imperative remains to translate the metered element back into traditional diary or recall style metrics and reporting.
By way of contrast, the winner of the Tony Twyman Award for best radio and audio paper (see video above) seemed to demonstrate the potential benefits of going ‘all in’ on metered measurement. The new Dutch audio measurement, built by Ipsos, reports listening time typically 52% of that reported by the previous diary system. However, by moving reporting and trading to a TV-style approach, radio ad revenue has actually increased by 4%. Whilst this was acknowledged to be a brave approach, making the leap to embrace new metrics puts radio directly alongside television and demonstrates how cost-effective a medium it is by comparison.
A fascinating debate followed (see video below), which highlighted the challenges in making such a leap in the dark and raised the question: is the radio industry’s adherence to its legacy metrics now inhibiting its future growth?
As we discussed in part one of our conference review, there was acknowledgement both on stage and off that the challenges facing all forms of measurement are becoming more and more common to all. A particularly pressing issue is that of sustainable measurement.
The media and ad industries have various initiatives underway to evaluate the sustainability of the media and advertising eco-systems, but measurement itself needs to have a better understanding of the carbon footprint of the systems it uses and make informed decisions going forward. Médiamétrie is a clear leader in this regard and demonstrated the many elements involved in media measurement that need to be evaluated and tracked. Going forward, some key questions may inform our measurement choices: is a panel of 2,000 metered homes more sustainable than big data stored in Icelandic server farms? Is watermarking more sustainable than audiomatching reference sites? In Nice we started a debate that will run across future gatherings as we gain a better understanding of the imperatives for sustainable measurement and the implications for the choices that clients make as a result.
The rationale and vibe of the conference
In November 2024 we will be meeting up in Venice to explore progress on all these issues -and those that will emerge in a media industry that never stands still. As our commentary reflects, the value of asi is not just in our community celebrating its successes, but also in identifying common challenges and, in a number of cases, understanding what hasn’t worked and what we can learn as a result. The ability to follow up discussions off stage as well as on stage is, of course, invaluable. As one delegate put it to us ‘The networking was excellent, I must have got through in two to three days what it would normally take me three months to do and also the papers were excellent, really well done.’
We are very grateful to all our generous sponsors for their support during this event: Nielsen for sponsorship of the TV & Video Conference and asiConferences App; GfK for sponsorship of the Radio & Audio Conference; Ipsos for sponsorship of the asiNetwork Social Drinks Reception; and dataBreeders for sponsorship of the Tony Twyman Awards for best paper at both the Radio and TV Conferences.
The 2024 asi International Radio & Audio and Television & Video Conferences will be held on 6th to 8th November 2024 in Venice, Italy.