When integration can produce more segregation

There is a move towards greater integration of planning and trading data across online and offline platforms, but integration can sometimes disguise a move towards greater segregation. Where will this leave the non-publisher online display suppliers? By David Brennan.

Scotland has voted to remain part of the UK. Hurrah! Except the consequence is that they may be denied a say in future parliamentary decisions relating only to England. Boo!

Whether the ‘English votes for English MPs’ lobby – eerily quiet while the Scottish referendum voting was actually going on – was pre-planned or opportunistic is beyond the reaches of my Machiavellian imagination, but it does labour my point even more than is necessary; that we often encounter unforeseen consequences, even when we try to keep things the same, and that what looks like integration can sometimes lead to greater segregation.

Let’s take media research, for example (yes, I know, a tortured leap, but bear with me). I’ve been hearing about the irrelevance of media silos in a digital landscape for a couple of decades now, and yet as far as the movement of the advertising money goes, the same media silos – based on outdated terms like broadcast, print, TV, radio, cinema, outdoor, newspapers – are still very much in evidence.

That, in large part, is based on the fact that each has their own trading silo; working on audience metrics that have been designed for the established (and still predominant) platforms. Their JIC currencies have been predominantly designed for an analogue world, and are still underpinning the majority of advertising media trading. (It hardly needs saying that the reason for this is the average consumer’s stubborn attachment to analogue-era media platforms and experiences). Hence, as far as the advertising money goes, media silos still rule!

Admittedly, the media agencies have invested in cross-platform planning tools, taking integrated planning at least as far as probability modelling will allow, and initiatives such as the IPA’s Touchpoints have helped to wed the industry currencies within a unified planning framework. So, integration has been happening in a statistical sense for a decade or more.

In that time, although online display has taken an increasing share of overall advertising revenues, there are many who feel that the silo-driven and predominantly analogue-focussed trading currencies of the established media channels have limited online’s ability to trade at its ‘rightful’ share. Many more will echo the ‘integration good; media silos bad’ mantra, based on a belief that, once we measure everything on an equal basis, spanning all of human behaviour, online will gain its true rewards.

Ignoring the fact that the online industry itself has already added its own media silo (UKOM), we are finally beginning to see the emergence of a much greater integration of media currency data, which aims to merge online and offline audience exposure and (in some cases) link to surrounding online behavioural data. Unfortunately, it is still happening within the broader media silos rather than beyond them, but organisations such as BARB (Project Dovetail), RAJAR and NRS are looking at better and more relevant ways to monitor the total audience to their different media channels, across all platforms.

Although online currencies (note the plural!) do exist, they have been rocked by a series of revelations about their lack of accuracy, accountability and reliability. Meanwhile, there is a danger that print and broadcast measurement bodies might succeed in taking away (or, as they would see it, bringing home) the trading currency rights for their most prized assets; the audience for media publishers’ online content. If, say, the NRS was successful in its ambition to create a ‘publisher’ category for advertising measurement across platforms, where does that leave the non-publisher segment of the internet display market?

Back in 2010, when TV on demand pricing started to go through the roof (at its peak, it was being valued at up to 4x the broadcast audience CPM), there was a frantic race to justify why it was worth an even greater multiple of the CPM of non-TV online video advertising. There were some strong arguments raised in TVOD’s defence, even though it was generally accepted that much of the differential was generated by TVOD being used as a deal regulator, outside the BARB system (and therefore not subject to the same auditing scrutiny).

Things have settled now, and the TV on demand audience – across whatever platform they access the content – is increasingly perceived as valuable in its own right. It is therefore vital that it can be measured side by side with its broadcast ‘parent’. So, it makes sense for BARB to extend their measurement of the audience across platforms and integrate the data within their planning and trading systems. The same is true for the other industry currencies.

The (unintended?) consequence of all this cross-platform integration of planning and trading data is that the rift between the legacy media online assets and ‘the rest’ in terms of CPMs and premium pricing is only likely to accelerate, especially as ‘the rest’ will become even more susceptible to commoditisation through programmatic trading.

It might even help persuade some of the bigger online players to get more involved in offline ‘publishing’ in order to be part of this new media elite.

A few years ago, the Association of Online Publishers produced an impressive study showing how ads in publisher properties performed better that those on social media or aggregator websites. Since then, we have seen a raft of evidence supporting that case, whether it be demonstrating the effectiveness of TV on demand pre-rolls, newsbrand advertising on tablets or the native advertising opportunities with magazine publishers.

On one level, this has to be a good thing, as it helps provide a bulwark against the commoditisation of online advertising audience, certainly for the legacy media. It has always been an anomaly that, given the massive diversity within the world of online content, there has been relatively little differentiation between how diverse online advertising media opportunities are planned and traded within the purely digital sphere.

On the other hand, it also suggests that media silos between online and offline platforms might well be blurring, but much of the trading will continue to depend on channel-specific audience metrics – at least for as long as consumers stubbornly refuse to transfer a bigger chunk of their analogue media activities onto digital platforms.

David Brennan is the founder of Media Native.