“Half the money I spend on advertising is wasted,” goes a popular advertising-industry maxim. “The trouble is, I don’t know which half.” Some media companies are toying with a plan they hope will get people to stop using that phrase.
A host of top TV companies are slated to convene Friday to discuss whether they can move forward with a nascent effort to offer advertisers a new measure of success or failure. Rather than pay for ads based on how many people see them – the current standard – these companies want to see if Madison Avenue might consider paying based on how many people were prompted to make a purchase after they watched a specific ad. Tying a commercial to an actual sale has long been a sort of Holy Grail on Madison Avenue.
Discovery Communications, Time Warner’s Turner, CBS, NBCUniversal and A+E Networks are said to be among the media companies slated to meet and discuss the potential project, which has been given the code-name “Thor,” after the Norse god of thunder, according to people familiar with the matter. CBS, Turner, NBCU, Discovery and A+E Networks declined to make executives available for comment. Other media outlets could also be involved, some of these people said.
The Video Advertising Bureau, a trade group representing many TV companies, is also said to be involved in the project. Sean Cunningham, the chief executive of the organization, did not respond to a query seeking comment.
People familiar with the effort stressed that it is in its infancy. Even so, some of the executives involved hope to start testing capabilities by the end of the year, according to one person familiar with the matter. Under some of the plans being discussed, set-top box data would be harnessed to determine when ads ran and how they may have affected consumers’ intent to purchase.
“Thor” could help TV networks strike a hammer blow for ad dollars. As the linear TV audience has dispersed among streaming video, DVR playback and many other methods of consumption, the industry is struggling to count them in a way that will capture advertiser support. 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.
“Thor” puts a spotlight on so-called “attribution modeling” that attempts to determine whether a purchaser was exposed to an ad, when the interaction took place and how it may have influenced the sale of the product or services being promoted.