MBPT Spotlight: Resurrecting the Power of Television Advertising—Via the Set-Top Box

The January deal where CBS Corporation agreed to use Rentrak audience-measurement services sent a clear message that big data, a staple of Internet measurement and programmatic exchanges, is now fast becoming—if it hasn’t already—a standard for the television medium.

And it’s about time.

Our industry has understood for quite a while the intractable problem of using small samples across hundreds of cable channels with increasingly fragmented viewing.

Thanks to smart TVs and set-top box data, television is entering a new world of audience measurement and accountability.

Not only have we been dealing with unstable program ratings that have huge sampling errors, but there have been unintended, systematic biases, such as the understatement of cable audiences documented by the “zero cell” phenomenon experienced in local meter and diary markets.

The solution to the sample-size problem has been sitting right in front of us for over ten years, but it has taken the resources and entrepreneurship of Rentrak to make that solution a big-time reality.

I’m speaking, of course, about that ubiquitous set-top box (STB), which has the ability to passively capture anonymous, continuous electronic streams of television viewing exposure vs. channel tuning on even the smallest of niche channels, cable networks and local markets.

While the STB is not a perfect measurement device (frankly, there is no such thing in the social sciences), one of the biggest concerns—false-positive tuning—has been successfully dealt with by employing sophisticated mathematical algorithms. And you can take it on faith that CBS, with its bullpen of sophisticated researchers led by chief research officer David Poltrack, would have never entered into this deal had they had any serious doubts about the veracity of Rentrak ratings.

Another long-standing issue with STB data has been the attribution of demographics and household characteristics to STB tuning. Since Rentrak is not entering the home to collect such data, and the cable industry—out of concern for privacy—will not provide such information, companies such as Rentrak and my former company, TRA, use sophisticated privacy compliant matching rules to infer the required household demographics information.

There’s no question that CBS’ interest in Rentrak was not only for its reliable, census-sized-based television ratings in all 210 DMAs, but also Rentrak’s tremendous insights into the viewer/demographic equation.

Think about it for a moment. There is a level of behavioral measurement that the Internet used to have sole bragging rights to. Not anymore: With Rentrak’s 12 million STB homes, the television research industry has come of age, and CBS is sitting on a gold mine.

And luckily for Viamedia’s advertiser and multichannel video programming distributor operator-partner base, so are we. When I took over as president and CEO of Viamedia—the largest independent local TV advertising company—I saw a tremendous opportunity to expand our traditional spot television business through the deployment of new technology platforms fueled by innovative, smart databases.

Today, we are using Rentrak’s massive database to sell traditional television spots on behalf of our 50 MVPD partners in more than 70 DMAs across our unique cable footprint of over 3 million households, as well as sharing numerous data insights with our more than 10,000 advertiser partners to help them grow their businesses.

Tomorrow, we will be deploying Rentrak data behind our placemedia programmatic planning/buying exchange. Think about the possibilities of that for a moment. Advertisers will have the opportunity to select from myriad demographic, psychographic and consumer buying data, and then use the power of search engine optimization and big data to construct highly refined schedules that will find our clients’ most crucial—leverageable—target audience in whatever television program that audience happens to be watching. In effect, advertisers will be able to use the placemedia portal to buy impressions (a.k.a. audiences) like the Internet as opposed to the antiquated model of buying simple ratings.

It is the dawn of a new age of data accountability and smarter media on TV, and for once we are not referring to the Internet. We are talking about the 60-plus-year-old television medium that is about to be planned, bought and verified at the national and local level like it never has been before.

Lieberman was named president and CEO of Viamedia , an independent video sales organization that specializes in local, cross-platform TV ad services for MSOs, in January.Prior to that, he cofounded and wasCEO of TRA Inc., the media and marketing measurement company now owned by TiVo.