50 Executive Summary Taking the pulse The social science of
The vast majority of TV ads continues to be sold using pretty straight-forward demographic information, like men, 16 to 34 years of age, etc. But the fragmentation of TV audiences over the past two decades and the development of more sophisticated audience tracking technologies coupled with new computational power has spawned a gaggle of new kids on the audience tracking and ad sales block.
Among these is five-year-old start-up Simulmedia. According to Pravin Chandiramani it takes the demographic measurement tools that dominate the majority of the $70bn a year in US TV advertising to the next level: “We attach a lot of purchase data
TV ads
cautions that changing how the vast majority of TV advertising inventory is sold will take time because it requires a seachange in thinking.
“In the big data world everything can be
which gives us an idea of the business outcome of the advertisements,” he explains. Using data collected from 19m set top boxes in the US (representing about 50m viewers – bigger than audience measurement company Nielsen’s 24,000-person panel) and combining that with programming data from TV channels as well as purchasing data, Simulmedia creates what Chandiramani calls a “closed loop type of metric” where the ad spots people view can be correlated against their purchasing decisions. “In the big data world everything can be correlated,” he explains. “But at Simulmedia we look not at correlation so much as causation. We are able to connect viewing to actual purchasing.” The company, which has raised $60mn in venture capital, has had good success with retail and restaurants clients but Chandiramani who in addition to a business degree spent nearly two years studying the social interactions of baboons for a masters in biological science,
correlated”
By 2016 an estimated 10% – or some $16bn – of all TV advertising (estimated to be $75bn market in 2016 in the US) will be sold using data with “more colour and more definition than just demographics”. And this portion of the market is set to accelerate substantially over the next few years. Based on research by MyersBizNet Media and Marketing, by 2020 the amount of audience based and also programmatic/ automated TV spot buying (the latter is not something that Simulmedia does)
will double to $33bn out of an estimated total TV ad spend in the US of $83bn. “The whole notion of measuring and re- aggregating audiences will gather momentum,” says Chandiramani. “It’s taken time to get where we are now and some in the ad and agency world still view what we are doing with suspicion because it is a change from the past. Beyond the technical
engineering aspect, there is also the social engineering aspect and there’s a
marketplace consensus that this still needs to be built.”
theibcdaily
Pravin Chandiramani SVP Business Development, Simulmedia
Region: United States Interviewed by: Kate Bulkley
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