Project Thor – Thunder or Blunder
In an attempt to prevent an exodus of advertising dollars from linear TV, a group of television executives met last week to determine if it makes sense to move away from traditional audience-based measurements and create a new measurement standard based on attribution. “Thor” is the code name given to this project and its stated goal is to develop consensus around a new attribution-based standard. To date, no information has been released on the outcome of that meeting.
Two questions immediately come to mind when evaluating the Thor project. First, will attribution measurement accurately represent the true value of a linear broadcast impression? Second, will Thor help or hurt the revenue potential for linear TV broadcasters?
So What Is Attribution-Based Measurement?
Attribution measures the influence of each media impression on a decision to purchase. These measurements enable marketers to optimize their media mix by breaking down the typical siloed media planning process, and allocate the most money to the most effective media.
Television Audience Trends
Traditional linear TV viewership has been eroding since the 1990s and in recent years, this viewership loss has been accelerating. A stark example of the challenges that networks face happened during September’s premiere week, where ratings were by all accounts dismal. According to Nielsen, 26% of A18-49 viewers watched live primetime broadcasts during Network premiere week, down 8% from the previous year and nearly 30% when compared to the 2011/12 television season.[i]
Offsetting some of the ratings loss is the fact that most ad buys are not based solely on live viewing, but based on live plus 3- or 7-days to account for time-shifted viewing. However, much of this loss can be attributed to the growth of non-ad supported viewing options such as DVRs that allow you to skip ads; streaming services; the proliferation of competitive OTT networks; and the rise of the Millennials, a group that appears largely disinterested in live linear TV.
Following the Money
In contrast to the 8% year over year drop in A18-49 audience, major broadcast networks saw a 4.1% increase in 2017/18 upfront revenue. Looking at the trend from a longer-term perspective, revenue was down just 1% since 2011/12 even though A18-49 saw a 30% audience loss.[ii] On a positive note, CBS with Young Sheldon and ABC with Will & Grace are new hit shows, and it seems that quality content, especially programming that is uplifting and inspirational, is popular, even amongst younger viewers.
Unfortunately, Sports ratings are also taking a serious hit, as Millennials apparently are not watching live sports nearly as much as their elders did when they were young. What makes this trend especially worrisome to the networks is the fact that huge dollars were laid out for broadcast rights based on the assumption that the sports audiences will continue to grow.
With audience trends pointing in the wrong direction for large ad-supported networks, television executives are rightfully looking for alternative methodologies to justify the billions of ad dollars spent on them. People in the know realize that linear television is reaching a tipping point because the combination of eroding audiences and increasing media spend cannot be sustained for much longer. Thor is an attempt to demonstrate that linear television is a more effective and influential medium when compared to its competition, and thus deserving of a greater share of ad dollars. As well, an updated measurement standard is necessary to give advertisers a sense of consistency, allowing buyers to more easily justify their purchases, thus yielding more transactions, greater revenues, and ultimately overall industry stability.
While it is possible to develop models that demonstrate attribution, it is quite a complex undertaking and the impacts of such studies on the industry are uncertain. Linear television audiences are clearly getting older, smaller, and less desirable from a traditional measurement perspective, but there is not yet enough stable data to fairly quantify the quality of audience that remains.
Linear television, especially primetime, has for decades been the crown jewel for advertisers, and ‘punching down’ to compete on the same playing field as less-prestigious, smaller-reach media makes little sense. Linear TV is a valuable branding vehicle and, while it is still an efficient medium, it is not certain that current attribution measurements will capture this properly.
To shore up its revenue base, television executives are better served by continuing to develop high-quality content, and embracing alternative revenue streams such as program sponsorships and product placement. They should also continue to emphasize distribution channels that best speak to the Millennial demographic, while making certain such efforts do not cannibalize current business.
Yes, a new and more accurate measurement system is needed to keep linear television relevant and the advertising markets stable. However, current attribution models are not the right measurement methodology for linear TV and the advertising partners who have for decades benefitted greatly from this symbiotic relationship. I wholeheartedly reject the notion that attribution is a proper alternative to our current audience measurement methodology. I recommend to the TV executives who may be recommending this change to think hard about the long-term negative impact this measurement system is likely to have on this jewel of a medium. Taken to its theoretical extreme, attribution would recommend that television networks create content that is 100% Direct Response, rewarding transactions over quality of content. Is that really where we want to go?
[i] Stephen Battaglio, Los Angeles Times Online, October 4, 2017
[ii] Media Dynamics Incorporated, estimates in advance
A 20-year veteran media executive, Rob Silvershein’s success in today’s competitive media environment is a direct result of his unique experience spanning traditional, emerging, and entrepreneurial media platforms.