Friday, July 10, 2009

How do you measure "engagement?"

Those companies that measure media audiences--and those who make their livings based on those data--are struggling to keep up with new technologies that are rapidly changing the landscape of advertising, marketing and media. "Rapidly" as in "the speed of light." It's tough keeping up! And the new CEO at Arbitron (radio ratings), Michael Skarzynski, is paddling as fast as he can. While testifying to a government hearing, he let slip that his company (and MY old company) is pulling a rabbit out of a hat. The story, quickly:

PPM tracks exposure to stations, but Arbitron says it's cracked the code to measuring listener engagement. CEO Michael Skarzynski says they've developed a prototype which "couples" exposure to engagement. The development may be a way to quiet PPM critics. Some Black and Hispanic broadcasters believe the drop in ethnic station rankings is a measurement of exposure -- not station affinity. Skarzynski told the House Judiciary Committee yesterday they'll release the new engagement tool later this month.

PPM, by the way, is a passive device carried by panel members recruited by Arbitron. It "listens" and logs encoded audio from stations and web sites so the device knows what the panel member is hearing. Not necessarily what they are "listening to," but still it is about as close to real audience listening measurement we have seen yet.

Fly in the ointment: the PPM is showing dramatically lower listening to ethnic stations than did previous methodology. Some claim the other forms of measurement--keeping a listening diary, doing random telephone calls--allowed ethnic groups to "vote" for "their" stations, not to necessarily accurately report their true listening. There is no "voting" with the PPM. It can only hear what the panel member is hearing.

I cannot imagine what Arbitron has up its sleeve. But here is why YOU should care.

Electronic media has almost always been priced on ratings. So many dollars per rating point (one percent of the population) and the like. But as media becomes more and more diffused, the value of an audience is not in its numbers but in its makeup, its tendencies, its propensity to do certain things predictably. And in the media’s ability to make them do those things for the benefit of advertisers. If my radio station can deliver 3,000 people who will likely eat at a particular restaurant, it has far more value than another station that can deliver 50,000 people, none of whom will ever eat there. Using the old model, the station with 50,000 sets of ears could command the highest rates for its commercials and probably got the bulk of the advertising.

Now, if we could just deliver data about “predictable propensity,” and the software to make a compelling case, we’d have something. But it has to be as compelling as “lowest cost per point” once was.

How does this affect YOU? Advertisers support programming and media and stations that move widgets down at the store. If media effectiveness is not measured properly, ad money goes to the wrong media or station or programming. And those media, stations, and programming stay around, even though they are not necessarily what you or your peers want to read, watch or listen to. And the "good" ones go away because the "power" of their audiences--if not their numbers--are not getting reported accurately.

It impacts you in many, many more ways, too, but this is a blog, not a doctoral thesis.

But Lord help us all if Arbitron does some statistical mumbo jumbo, like weighting ethnic listeners higher than the rest of us, just to appease those who claim the PPM is somehow being unfair to stations that serve them. Nielsen is facing the same criticism, primarily from Hispanic TV stations, and could be forced into the same sort of audience measurement witchcraft.

If it ain't accurate, it can't be believed. And if it can't be believed, data have no value. So why bother?

Don Keith


Anonymous said...
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Anonymous said...

As more media is delivered over the Internet perhaps they will devise a strategy like to present their ads to a more closely targeted local audience.

Don Keith N4KC said...

Well, that is happening on a gargantuan basis already. If I am searching for 2-inch PVC pipe, you can bet there will be paid links and banner ads all over the place for outfits that supply that stuff. Other than a 10-second commercial at the start of a video, over-the-net audio/video still has not broken the code on making money with it.

Traditional radio, TV and newspapers are the ones who are wandering in the wilderness, and most are already waist-deep in quicksand. The transmitter-on-the-hill model is dead, dead, dead. But it can still be a strong base from which to work if those who have keys to traditional media ever decide to bring their remaining strengths and join the party.

Don N4KC

Anonymous said...

For a hint at what Skarzynski may have been hinting at, take a look at Arbitron's major investments in other companies. Particularly on point is T R A, a firm that is committed to changing the media buy-sell process from an age/gender based guessing game to one based on ROI. Here's the link to the press release on the subject: