Bellevue’s iSpot.tv is measuring TV ad performance in a new era
The Internet has changed how and where media are consumed, and it’s made buying ads and determining a media mix more complicated. In the past, ads were purchased based on subscriber counts and broadcast reach. Today, marketers need to know that people are not just seeing their ads, but also are being impacted by them.
Meeting that last criterion has been tough for TV, the medium that commands the highest ad rates. The key metrics for TV advertisement buyers have long been reach — the number of possible ad views based on program viewership and ad frequency — and focus groups among key demographics. In today’s data-rich age, those metrics are, at best, murky; at worst, they force companies to make feeble guesses on how to spend billions of dollars of ad money.
“Advertisers are demanding more,” Sean Muller, CEO of iSpot.tv, said. “Digital has taught advertisers that there are more precise ways to measure effectiveness.”
Broadening the data available to TV ad campaigns is iSpot’s forté. For the past three years, the Bellevue company has honed a platform that — for a fee, usually around $150,000 — gives clients unprecedentedly precise, real-time data on national ad performance. The company’s ability to give TV advertisers digital-quality data is a big reason it received $21.9 million in funding in May.
TV ad spending, unlike that in other traditional media, has remained strong during the digital age, buoyed by, among other things, cable programming and live sports. According to media research firm Kantar Media, TV ad spending grew by 5.5 percent in 2014, while Internet ad spending grew just 0.9 percent, and ad spending on all other media fell. But the popularity of Web ads, and the data that come with them, is soaring. Consulting firm PricewaterhouseCoopers predicts that digital ads will account for 38.7 percent of all ad revenue in 2019, up from 16.6 percent in 2010.
TV remains the ad powerhouse — $69 billion was spent on TV ads last year — and a successful campaign can reap benefits on other screens after an ad has aired. “When people watch TV today, they’re generally holding another device. And we’re doing a lot of things on that other device that might have nothing to do with TV. You might be texting, on Snapchat, sending an email,” Muller said. “But when something catches your attention on TV, consumers often interact on their devices.”
ISpot tracks those interactions with a metric it calls digital share of voice, or DOV. Once a TV ad airs, iSpot’s platform is able to measure social-media interactions, subsequent views on video-streaming sites such as YouTube, and search traffic related to the brand. By iSpot’s standard, the good ads don’t just make a viewer chuckle. Instead, they make a viewer chuckle, then search for the ad on Google, watch it again on YouTube, and post it on Facebook. The ads might air on TV, but their value is measured on computers and smartphones.
Cross-referencing DOV with spending lets companies see how well their campaigns performed. If a company’s ad spending was 10 percent of the industry total in a week, but its ads received 15 percent of digital interactions, then it was money well spent. Flip the numbers, and the ads need to be more engaging.
ISpot captures every national ad from every brand — about 8,400 so far in 2015 — and organizes them into 164 industry categories. The data are licensed by category, so companies can compare their spending and success with their competitors. Metrics are available for a brand’s entire campaign as well as individual spots (the top performing ad of 2015, to date, has been the trailer for Marvel’s Avengers: Age of Ultron film). Ad success can be broken down by network, show, and episode. So not only can a company see how its ads are performing, but a network can monitor engagement in its shows, and charge accordingly for airtime.
In the near term, iSpot fills a data void that’s plagued the TV industry. But the company offers a glimpse into what advertising could look like for all traditional media going forward. With real-time data, TV buys could offer the customization that digital buys do, even within the course of a single program. Instead of, say, Doritos having a predetermined commercial to run in the third quarter of the Super Bowl, it could have a roster of four commercials, see how its early ads fare digitally, and then adjust its third-quarter ad accordingly, shipping it at the last minute.
“That’s where we believe TV is headed,” Muller said, “where you can optimize your buys in an automated fashion using data. But you need data to do it, and that’s where we see ourselves playing a role in the future.”