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TV Industry Leaders Developing Purchase Measurement Plan for Advertisers

Madison Avenue has for years paid for TV ads based on the number of people who see commercials. Now, a group of media executives is offering an intriguing new wrinkle: What if advertisers paid for commercials based on how many people were prompted to make a purchase after they watched a specific ad?

A coterie of cable and broadcast TV networks have joined together in the hopes of unveiling an initiative that would employ so-called “attribution modeling,” a technique that gives credit for exposure to specific ads over a pre-determined period of time, as a basis for individual deals between advertisers and TV networks. The effort, dubbed “Thor” in the hopes the invocation of the Norse god of thunder would keep the details from spilling out into public, could gain more traction later this week. That’s when a group of TV executives are expected to commit to taking part in the initiative, or not, according to a person familiar with the matter.

This person declined to name specific networks involved, out of concern that doing so might jeopardize the group’s progress or prompt some of the prospective network participants to pull out.

But the initiative work could add yet another yardstick to an industry struggling to devise new measurements for an audience that has scattered between traditional linear TV, streaming video, DVR playback and many other methods of consumption. Despite the rise of mobile tablets and subscription video on demand, most TV networks continue to derive the bulk of their ad revenue based on the number of linear viewers their TV shows attract.

In recent months, Time Warner’s Turner, Viacom and 21st Century Fox’s Fox Networks Group have unveiled “Open A.P.,” a system that would allow advertisers to buy based on specific kinds of audience, such as expectant mothers or likely moviegoers. Nielsen recently unveiled similar technology. ESPN is combining linear and streaming viewership for programs like “Monday Night Football” into a single number. And several big TV outlets, including CBS, Fox Sports, Turner Sports and ESPN, have begun offering Nielsen’s “out of home” measures  in hopes of getting paid for viewership that takes place in hotels, bars and offices.

In a research note issued last week, J.P. Morgan analyst Andrew Steinerman suggested that the industry is beginning to support more broadly efforts by Nielsen to measure TV audiences across many different kinds of screens and viewing behaviors. “We expect more progress on this front by spring 2018 Upfronts, though we do not know how long full industry consensus will take,” he wrote.

The new “attribution” effort means”we can get into a conversation about whether the purchaser was exposed to an ad, and we can say, ‘Yes, there was exposure to an ad on our air two weeks ago, or a week ago, and they actually made the purchase a day ago,” said the person familiar with the new effort. “We know that there’s a pattern of activity that led to that purchase.” This person suggested the group would use data from set-top boxes to determine when ads ran and how they may have affected consumers’ intent to purchase.

The talks could include potentially a dozen different parties, this person said, but which of them might ultimately take part remains unclear.

The new effort is not trying to compete with Open A.P., this person said, but rather bring another methodology into the mix. After the companies decide whether they will take part and what data vendors to use, they are likely to approach advertisers and media buyers with the concept. The companies hope to start testing capabilities by the end of the year, this person said.

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