One of the notable themes of the last few years is that TV advertising is trying to become more like digital in terms of targeting and accountability. This convergence is good for brands and good for TV because it provides more consistency for buyers across different media and demonstrates the power of TV.
Multi-touch attribution is the key enabler of this accountability. For digital, the last-click attribution model allows companies such as Google and Facebook to take direct credit for customer conversion in a measurable way - and profit accordingly. Before digital advertising started, when a customer bought a new LG fridge, they would credit this to the customer having seen a lot of TV ads for LG. If all my friends are jealous of my new fridge, it almost certainly isn't due to Google, as most of them will have never entered the LG website via Google ads, but to brand recognition, having seen endless TV ads for LG over an extended period. And if LG increased their TV advertising budget, they would expect to see a subsequent increase in fridge sales.
Google and Facebook overturned this model with last-click attribution. If the customer clicks on a Google or Facebook ad to go to the LG website, where they then order a new fridge, then these companies claim the purchase should be attributed to them. They have the measurements to prove it (they say) and have profited accordingly.
Their success is in spite of the fact that many companies may not get their brand awareness from Google or Facebook. However, it was equally clear that the only response the TV industry could make to unseat last click attribution was to develop similar ways of measuring the impact of TV ads. Google and Facebook can easily measure the last click, as well as other indicators such as how often someone saw the ad before clicking on it, and what they did once they had clicked on the ad, whether making a purchase or leaving the website ten seconds later. Measuring TV advertising is more complicated and uses multi-touch attribution to map the customers' journey towards a conversion, i.e., making a purchase. So, given that the new LG TV ad was seen in the customers' household 11 times in the last week, how did this contribute to the sale?
To answer the question, we first need to look at what data we have to measure attribution. Traditionally, audience ratings have been calculated by Nielsen in the US (since 1950), BARB in the UK and similar organizations elsewhere. Nielsen's panel data still plays the key role of overall audience measurement, but big data sets (OTT; Smart TV data; return-path data) can, with the right match fabric, provide measurements such as attributing the number of new users to a website to the people who have seen the company's TV ad. However, there are further datasets whose addition can help paint a more accurate, multi-touch picture of the customer journey to conversion.
A highly measurable dataset is direct response TV ads, which ask for a direct response from the viewer. So Geico might offer a lower price if you ring a specific number. The ROI can then be calculated based on the number of phone calls received from subsequent buyers, though creating this dataset has extra costs, i.e., having to pay for the special offer and run or extend a call-center.
The availability of set-top-box and smart TV data has further opened up TV to last click attribution. By matching the IP address of the TV where the viewer saw an ad with the IP address of the viewer who has visited the website we can build up a pattern of consumer exposure to advertising across different media. This approach is known as multi-touch attribution and, for major consumer purchase decisions, we can map brand exposure over an extended period of time and involving many hundreds of TV brand exposures, Google ad exposures, online display adverts, and visits to the brands' website.
When the buyer decision is to purchase a new product the advertising is normally designed to drive people to buy in-store or from home delivery. Where the product was bought online the last click to the website is not the only point that deserves credit for the purchase. When driving people instore, all the advertising dollars spent are now fighting against the incentives and targets given to the shop saleswoman responsible for selling the highest margin products for the retailer.
With data from smart TVs, set-top-boxes, and digital, we can build up a complete picture that provides agencies justification for their buy, and brands with confidence that they are spending their ad dollars effectively. Now that's real accountability.