Grading Your Own Homework in the Closed Loop. A discussion with Nielsen’s Megan Clarken.

As data becomes more prevalent in the media ecosystem, there are many more content companies touting their own versions of closed loop data systems in time for the Upfronts. But just like trying to define programmatic or even define television, closed loop applications can mean different things to different people. I wanted to know more about closed loop applications and how they are impacting the measurement arm of the industry so I asked Megan Clarken, Nielsen’s President of Product Leadership, what is going on.

In terms of a definition of closed loop, Clarken offered, "The way we at Nielsen describe closed loop is when the marketer measures their own impact using their own data, or when a media owner offers to do the same via their own set of data. So, the same set of data is used to target which is then used to measure."

Because of increased marketplace competition and access to more big data sets, it is understandable why closed loop systems are so prevalent now. "For a lot of media owners," Clarken explains, "there is unprecedented access to data, specifically audience data. Data such as registration and downloads from apps enable owners to track their audience and collect big data sets. Through this data, which has been untapped in the past, the media owner may see attributes of their specific niche audience that enables them to differentiate themselves from the competition."

For me, I am at once excited by the prospect of closed loop systems propagating the media ecosystem and, at the same time, somewhat worried. On the plus side, these systems enable creative and highly targeted solutions for both content providers and advertisers. But at the same time, these systems are essentially walled gardens, unable to be collected into an industry standard and therefore not especially scalable in their current forms. This, I believe, causes a fragmentation in marketplace selling and delivering and essentially reduces closed loop into yet another internally controlled sales positioning tool.

Many of these closed loop applications have proprietary data and algorithms and there is some concern about the long-term value and usefulness of these applications for the industry as a whole. Clarken is unfazed and philosophical. "Selling against one’s own data and using it to stand out against the competition is one thing," she notes, "such as performance based, niche audiences like sports enthusiasts who eat fast food. But it becomes complicated when you try and guarantee against it using the same data, because it is not a third party independent measurement. It is like grading your own homework. If media is bought on closed loops, the measurement of the campaigns reach and effectiveness will be based on each of the media owners own data and in this environment, there is no independent verification and no way of comparing results across the industry. Measurement needs a referee that can be used to guarantee."

That is where Nielsen comes in. Closed loops should not negatively impact Nielsen's business, according to Clarken. "Closed loop platforms generally include Nielsen’s age / gender ratings data anyway, but with many proprietary attributes layered on top" she explained, "using these additional datasets to differentiate and promote performance is essential in our industry, but using the same environment to guarantee against is problematic and confusing to advertisers. Nielsen takes the friction out of the market by using comparable metrics across the industry. There is an important role for third party independent measurement to play and that is to create consistency across media and to validate a transaction without any bias.”

Although this appears to be a time of measurement transition, Clarken doesn’t see the industry moving to standardization of measured impact from measured exposure any time soon. Foundational metrics such as reach and frequency are not going away, she believes. Those metrics are staples to describe the most basic role of the media transaction. Nor does she see traditional age and gender metrics being replaced by target audience measurement. Age / gender are also foundational and create consistency across campaigns. They are stable, and they inform creative and can be tracked over time. What she does prescribe to is a set of secondary measures that validate effectiveness and ROI for more direct response and targeted ad models. Nielsen provides measurement across what we call the three “R’s” - Reach which measures exposure and Resonance which includes brand awareness and message effectiveness and ROI through services like NCS and MTA (multi-touch attribution).”

In terms of standardization of closed loop platforms for the industry, Clarken is not especially hopeful. She states, “I don’t think it is possible by the nature of the closed loop environment. There are differences between performance targets versus audience measurement. So it is hard to standardize when everyone’s targets and the sources of those targets are different. All are collecting data through different ways. But there is a need for standardization in the form of audience measurement. Advertisers ultimately want one third party verifier of their guarantee and this is the role that Nielsen plays.”

This article first appeared in www.MediaBizBloggers.com

Marketing Data Companies. Q&A with Ethan Rapp

Ethan Rapp recently joined Simulmedia as SVP Program Management, bringing “deep experience in marketing effectiveness as well as developing insights and analysis that help define new media paradigms,” according to Mainak Mazumdar, Simulmedia’s Chief Science Officer.

Rapp was an early innovator in digital research at DoubleClick in its formative years and has held senior research roles at AOL, Conde Nast and Knowledge Networks. He also co-founded Marketing Evolution a leading cross media measurement firm.   

Currently, Rapp is responsible for the Simulmedia’s Business Outcomes measurement programs which combine TV viewership data from set top box data with behavioral data including transactions and online activity from various sources. These sources can include credit card data, "First Party" CRM databases and online data management providers like Oracle’s Marketing Cloud.

I sat down with Rapp and asked him the following questions:

CW: Ethan, what do your “Business Outcomes” capabilities enable Simulmedia to do?

ER: We now have the ability to look at client specific "Business Outcomes" relative to Simulmedia television buys AND other television and online components of the client's campaign. Examples of these outcomes can include: offline sales, online sales, basket sizes, transactions by customer segment, online behaviors, etc. It’s really an effort to look at media’s direct impact on a client’s goals in a very transparent way and at the same time demonstrate the value of Simulmedia’s audience targeting.

It should be noted that because we do a lot of “data matching”; we take great precautions to protect privacy, and in fact never ever touch personally identifiable data ourselves; we always use trusted third parties

CW: How does this work with clients?

ER: This has become a critical part of the Simulmedia offering as we are now guaranteeing that our media will produce better business outcomes than traditional television buying and planning. We provide money back if we don’t improve overall business outcomes relative to the TV buy made without us. This is a huge step in the industry and takes any perceived risk out of audience buying for the client.

This measurement is provided at no additional charge with a minimum media buy. While we have no intention to become a research company, a lot of what we do is unavailable elsewhere, especially because we can see all TV consumed, including our buy, the other buys of our clients, and even their competitors buys. So as you can imagine, there is a lot of analysis we have the capability to do that doesn’t exist elsewhere. Our analysis can and should inform future planning and buying (that is what makes it truly closed loop).

  

CW: Where is television measurement heading? Will it become more digitally based with connected TVs?

ER: The interesting thing that has happened to TV in the last couple of years is that digital has provided pressure on the CMO and CFO to provide ROI across more media. Until recently, TV has not been able to deliver the same level of visibility that digital can provide. Recently however we have gained access to this great treasure trove of set top box data, which allows us to do far better targeting and measurement.

CW: What do you think the common metrics will be to facilitate cross platform measurement?

ER: I think the “must have” in the industry requires that the metrics for digital media, and the metrics for TV need to eventually align. I don’t think that the result should be the GRP, regardless of how entrenched it is currently. I think it needs to be at a person level, or at least a household level because that is what will enable the understanding of efficiency in media planning. Eventually it needs to be business outcomes. That’s our job. Improve the ability for companies to grow their bottom line with their ad spending.

CW: Is ROI only about the client’s immediate return on a specific campaign or is it broader than that?

ER: The metric has to be at a level where we can measure individuals and markets. Buyers will want to know where they can specifically place efficient media to influence people and move market share, both in the short term and long term. They want to know where they are gaining share from and where they are losing it. ROI needs to be framed by the specific goals of the marketer. That’s why we work so hard to make our targeting so robust and our measurement tailored to each client.

I can’t think of a single marketer whose goal is anything other than profitable growth. They crave information to make media decisions on how to optimize their budgets against profitable growth. They want to be able to measure the behaviors and the performance of their spending. The pressure to show ROI or any metric that directly correlates to ROI is what is driving the evolution of media planning. That evolution is now picking up speed and digital has had a lot to do with that. Simulmedia is bringing that online accountability to TV.

CW: What are the greatest differences between digital and TV?

ER: The differences are substantial right now. Objectively there are probably more differences than there are similarities. From a creative standpoint TV gives you emotion. TV gives you reach. TV gives you a brand identity over the short -and long term. Digital has never really proven to do those things in a scalable, lasting way. On the other hand, digital is great for highly targeted buys, to be able to drive short term sales, the ability to optimize and activate in real-time, based on how audiences behave, and to a certain extent create targeted awareness. It is very flexible as a medium. It is a lot harder to create a new campaign in TV in a couple of days where in digital you can create one in a couple of hours. Of course the goal is the same – to drive sales. With all that said, TV is still the most dominant medium against almost any metric you can think of, especially consumption and influence. The imminent death of TV is highly overstated and we are innovating in ways that make it more targeted and more measurable.

This article first appeared in www.Mediabizbloggers.com