Again, it's all about precision

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I’ve been saying for some time that while there’s a sea change in content and distribution, the real mind-blowers are coming in terms of changes to traditional advertising models.

Exhibit: "Our ratings, ourselves" from todays NYT Magazine. Ostensibly about changes in Nielsen measurements, but touches on the core issues of precision in advertising. Some key excerpts, emphasis mine:

”Television and media,” Luff said over the noise of five sets tuned
to five different channels, ”will change more in the next 3 or 5 years
than it’s changed in the past 50.”…

I’ll buy that.

Finding out whether ”C.S.I.” beats ”Desperate Housewives” is just
the beginning. Change the way you count, for instance, and you can
change where the advertising dollars go, which in turn determines what
shows are made and what shows then are renewed. Change the way you
count, and potentially you change the comparative value of entire
genres (news versus sports, dramas versus comedies) as well as entire
demographic segments (young versus old, men versus women, Hispanic
versus black). Change the way you count, and you might revalue the
worth of sitcom stars, news anchors and — when a single ratings point
can mean millions of dollars — the revenue of local affiliates and
networks alike. Counting differently can even alter the economics of
entire industries, should advertisers (thanks to the P.P.M.) discover
that radio or the Web is a better way to get people to know their brand
or buy their products or even vote for their political candidates.
Change the way you measure America’s culture consumption, in other
words, and you change America’s culture business. And maybe even the
culture itself.

And change what you count, like say reader purchases instead of readership or paid circulation, and then you’ve really mixed things up.

Some P.P.M. tests in Philadelphia have already indicated that wearers
tune into twice as many radio stations on a typical day as they ever
note in their diaries.

So perhaps the Long Tail phenomeon is less new than it seems — we just haven’t been able to measure it.


There is a dream within the counting industry that has been around for
decades, called single-source measurement, but it has never been
successfully realized. Recently, thanks to the P.P.M., this goal has
been resurrected under the name Project Apollo, which is a joint effort
between Arbitron and VNU (Nielsen’s parent company). ”Apollo is
basically something that’s been the holy grail of measurement since
people were drawing woolly mammoths on the side of caves,” David
Verklin said. It’s a closed-loop system that will measure the media
people absorb — and then what they buy.

To this end, Apollo will track 70,000 people across the country
who wear the P.P.M. all day. But not for the sake of ratings. The
advertisements and messages these 70,000 people see, hear, read,
encounter will be matched to the purchases they make…

At the moment, representatives of Arbitron and VNU are making
presentations around the country to encourage big companies to sign up
for the service, which should be available sometime next year. The
price is high (up to $1 million per company)
, and many businesses are
reluctant to invest in an untested product. So Arbitron and VNU are
trying to stress the practical appeal: Apollo should allow companies to
understand which advertisements get consumers to buy their products,
but could also offer insights into the connection between their
tactical approach to advertising and the urge to buy…

Um, wow. Two kneejerk reactions:

  1. Media outlets would be smart to put a pay-for-performance mechanism in place before a scheme like Apollo takes hold. The last thing you want is an outside service busting up all your voodoo ad space schtick. Better to bring it to market on your own terms.
  2. What about smaller businesses who can’t afford $1 million in fees? Does this widen the Wal-Mart’s advantage over small retailers?

The market is demanding more precision. (Note that I said precision, not perfection.) Precision may well be the divide that separates the haves from the have-nots in the coming decade.

At least that’s our bet.

Mike Orren is the Chief Product Officer of The Dallas Morning News; President of Belo Business Intelligence; husband to Crystal Orren; and a Mungarian at Munger Place Church in Dallas, TX. All opinions herein are mine alone.