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Impression-Based Advertising: The Move Away From Ratings

November 7th, 2019   ||    by Susan Kuchinskas

The Television Bureau of Advertising‘s (TVB) September call to action was urgent: the association aims to convert local broadcast audience measurement from a ratings-based to an impression-based advertising measurement system by January 2020.

Converting to an impression-based advertising measurement provides five benefits, Steve Lanzano, president and CEO of TVB, said in the announcement:

  • Allows the TV industry to measure the entire audience, no matter what screens they use
  • Lets advertisers evaluate media across platforms
  • Makes it easier for agencies and advertisers to include local TV in their cross-platform campaigns
  • Facilitates the use of automated buying platforms
  • Paves the way for more sophisticated uses of audience data

Why the Urgency?

Ratings for live, linear TV viewership slipped alarmingly for this year’s Premiere Week, according to Ad Age, down 12 percent year-over-year in the 18–49 demographic. And that’s not a new trend: Premiere Week ratings dropped 43 percent over the past five years.

But this dismal news doesn’t tell the whole story: People are watching about as much TV as they ever did, but they’re streaming, time-shifting, and going over the top. Old-fashioned ratings systems can’t capture any of this.

As Frank Comerford, the chief revenue officer/president of commercial operations for NBCUniversal Owned TV stations, told MediaPost, household ratings no longer make sense in today’s complex media environment. Shifting to impression-based advertising measurement will let local stations better track and understand when and whether a commercial was viewed.

At a time when direct-to-consumer brands have upped their television spending to $3.8 billion, per Broadcasting & Cable, and political scandals have sparked interest in news advertising, according to Variety, local stations want to maximize their potential ad revenue. Moving to an impression-based system will make it easier for them to prove the value of their programming.

The Road to Here

As the industry rushes to—finally—adopt impression-based advertising, it’s worthwhile to take a look back to the genesis of the old ratings system and its evolution.

Nielsen originated audience measurement for radio programming back in the 1930s, adding television in the 1950s. Nielsen signed up representative households and asked them to write down what they watched. In those days, families gathered around one TV set in the evening, so advertisers could be pretty sure that each TV set was equivalent to a household of watchers.

This system later became automated, but it was still based on the concept of statistical sampling: a subset of a population standing in for the whole.

Nielsen has continued to evolve its measurement and ratings products, while competitors offered measurement and data for other ways of viewing.

Meanwhile, digital advertising took a separate evolutionary path, beginning with the first banner ad, served on HotWired.com in 1994, according to Pixalate. While digital advertising has plenty of its own problems, including viewability and fraud, the concept of the impression—paying for one ad delivered to one screen—was a welcome alternative to the John Wanamaker conundrum of not knowing which ad dollars were effective and/or wasted.

The rise of automated tools for buying and placing ads plus analytics tools to understand ad effectiveness and ROI made digital a strong competitor to television.

Television executives and advertisers know that TV is still king when it comes to reach and overall consumer influence. But moving to an impression-based advertising system will let the industry marry digital and television across all its distribution channels.

The Outlook

We expect the shift to impression-based advertising to increase spending on local TV, while making automated/programmatic TV buying and selling even more effective and efficient. At the same time, it will transform the media buyer’s job. Instead of spending the majority of their time on trafficking, they’ll be free to tackle creative challenges, adding more value to the spots they buy—and to their own jobs.

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