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Programmatic TV allows advertisers to see how well a campaign performs in real time and make adjustments on the fly.

Which KPI Metrics Make Sense for Programmatic TV

January 29th, 2016   ||    by Todd Wasserman

Key performance indicator (KPI) metrics for traditional TV campaigns have always been somewhat hard to come by. However, with programmatic TV, it’s a different story.

Almost since its inception, linear TV has been evaluated strictly by numbers and demographics. For instance, if a TV show reaches millions of viewers in the 18–34 range, it could be considered a hit. For advertisers, though, that’s a pretty wide target. Even if many people saw an ad, it’s harder to tell whether they were consumers who would likely buy the product—the ultimate KPI.

With social media buzz, website visits, and offline purchases emerging as new ways to measure the success of a TV campaign, these are exciting times for advertisers and marketers, who also have the ability to shift their campaigns to optimize performance.

Better Metrics

The primary KPI metrics for traditional TV campaigns focus on sales. While tracking sales increases is still arguably the most important KPI, advertisers can also look for early signs that indicate whether a campaign is working. One area of focus is social media.

This was the rationale behind Nielsen’s decision to launch Twitter TV Ratings in 2013. Working with McKinsey & Company, Nielsen found a correlation between social media buzz and ratings, reports MIT Technology Review. The latter rose 1 percent for every 9 percent jump in social media comments. While providing a link between sales and social media buzz may seem tricky, since the products advertised could range from chewing gum to SUVs, social media buzz can still serve as a proxy for the campaign’s performance.

Another way to measure overall success is to monitor website visits and app downloads. Considering the profusion of second-screen viewing, it is rational to assume that if consumers see an ad that grabs their interest, they will search for it online and wind up on the company’s website.

Of course, connecting offline purchases to a TV campaign is the holy grail. A bump in sales is always welcome, but it can sometimes be difficult to tell whether the TV campaign deserves the credit or whether it’s due to other factors, such as the weather, price cuts, or some other variable. Advertisers can employ solutions to target specific consumers and see whether the campaign caused them to make purchases.

Adjusting on the Fly

Advertisers cannot immediately evaluate how well a traditional TV campaign performs, so there is no opportunity to make adjustments on the fly. Programmatic TV, however, is much more dynamic. For instance, an advertiser could run an A/B campaign in which one ad runs in one market and another runs elsewhere. If one of the campaigns sees much better results (as measured in social media buzz or website visits), the advertiser can quickly substitute in the better-performing campaign. The ability for advertisers and media buyers to make real-time adjustments to their TV campaign based on programmatic data insights is a tremendous advancement in the traditional TV buying world.

Geographic location isn’t the only variable. Advertisers can also experiment with different psychographic profiles. For example, if one iteration of a campaign clicks with 45-year-old stay-at-home mothers who love Pinterest, advertisers can double down on that version.

Early Days

Such experimentation indicates programmatic TV metrics are still in their early days. As with marketing in general, tracking too many metrics — not too few — is the danger. However, the rewards for lining up the right metrics, the right buy, and the right creative can be huge.

Want to learn more about leveraging KPI metrics for programmatic TV? Contact Videa.

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