Video audience measurement systems have long served as a currency for buying and selling commercial air time. However, split measurements for TV audience across free to air (FTA) pay-TV using dated systems, coupled with no independent assessment of digital audiences has tarnished the accountability standards of the marketplace.
Poor measurement standards have lead to some advertisers redirecting their media marketing investments to markets where the sanctity of the solution is still intact.
So, why is the current measurement system not relevant anymore?
The technology and the methodology was designed when Malaysian audiences used to predominantly consume their entertainment on FTA or pay-TV. As the pay-TV subscribers grew, a parallel solution was established to "fairly" estimate pay-TV viewers.
While this might have assuaged one set of stakeholders, it caused the measurement solution to get fragmented, almost doubled the cost of operations, significantly increasing the workload to do the same job, and left the industry polarised for years.
This was also the time when the Malaysian consumers were gaining access to digital, thanks to faster data speeds and adding online video consumption to their repertoire. In the absence of a single TV currency and our implicit confidence in the likes of Facebook and Google’s self-declared audience data, there has been an accelerated erosion in TV advertising spends in Malaysia to the benefit of online players. The share of advertising on TV is lowest in Malaysia compared to other countries in the region.
To rebuild the trust and confidence in the measurement solution, all stakeholders need to come together, under the aegis of the regulator and form a management team that designs, deploys, and operates the audience measurement solution in Malaysia capturing audience data across all video platforms, covering linear TV, online TV, and OTT ecosystems.
How to make it work?
The current approach involves TV operators contributing to the chunk of the expenditure for the measurement and media agencies topping up the rest via subscription to the data and software services. There is no contribution to the measurement costs by advertisers and digital video publishers. In markets such as the UK, for example, advertisers are part of the investors in the measurement solution.
To add to this asymmetry, there is no independent authority regulating, supervising, or managing the service providers, to hold them accountable for the quality and relevance of the currency.
For a measurement system to work effectively, it needs to operate under a three-tier management structure.
The funding should come from all stakeholders, media owner, agency and advertiser, with seed capital from the regulator to kick off the initiative. There are other countries to learn from on how to organise to raise the capital for such an initiative.
Unless there are investments and skin-in-the-game of all benefactors of the media marketing ecosystem, the solution will be sub-optimal and will sooner than later end up leaving an archaic, non-scalable, and rigid infrastructure in the trail - exactly like what we are faced with now.
What do we need to do now?
The sophistication required for total video audience measurement and the need for a larger panel size has increased. The fragmentation of audiences necessitates that panel sizes to measure total video consumption needs to be much larger than they used to be in the past, for it to be a relevant currency and be able to inform pricing strategies for the advertisements. We face the challenge of putting together a comprehensive audience measurement system that covers multiple linear TV channels, growing consumption of online video and OTT platforms.
Building an audience measurement panel to account for all of the above and projecting this to the universe will not be easy. To add to the complexity, the current environment is quite dynamic - which means that the penetration of free to air, pay-TV, and OTT subscriber base are constantly changing. This would necessitate shorter gaps between baseline studies, which would revisit the census data in shorter timelines, almost continuously versus the current point-in-time, once in two years census updates.
In the future, audience measurement and advertising exposure in the era of connected TVs and addressable set-top boxes, will not be the same where every household can be delivered a different set of commercials.
The data for the US indicates that while these account for about under 10% of total television advertising, their share is growing. The audience measurement framework should address this development in Malaysia in the coming years.
This evolving landscape gives rise to many questions.
So, what will an audience measurement currency look like a few years from now? Will panel-based systems completely go away to leave only census-based approaches? Can a single entity measure video consumption across all platforms? Or will there be a need for dedicated specialist organisations to measure each platform independently?
We believe that panels will remain at the core of any audience measurement. However, the ability of a single cross-platform panel to comprehensively measure total video might be improbable. It is more likely that there will be parallel panels (TV and digital, TV only, digital only) across the country collecting audience data, which would be combined through statistical techniques to give a unified view of the video consumption behavior.
It will then be the role of the management and operations team to supervise the independent panel(and data providers, synchronise the disparate data sets, and provide a unified report to the industry as a single currency.
The evolving landscape in Malaysia and key imperatives
Malaysian advertising spends have shrunk year-on-year since 2017. In 2019, the estimated advertising spend across FTA, pay-TV and digital media was 41% of a little over US$1 billion. In this environment, raising funds for measuring audiences across video platforms would be a challenge. Yet, two audience measurement services are operating, based on vastly different methodologies and not yielding the complete picture.
It is therefore very critical to consolidate and have a comprehensive single video audience measurement currency that brings onboard the FTA, pay-TV, and video platforms like YouTube and Facebook to create a single view of the audience.
The problem of unified audience measurement is not unique to Malaysia alone. Other markets are dealing with similar dynamics. Few markets have made some progress in this area, Singapore and UK to name a couple. I believe, in Malaysia, we have the potential to create a best-in-class solution and over time lead the way for audience measurement across ASEAN.
The writers are Ranga Somanathan, former CEO of Omnicom Media Group Malaysia and Singapore, and Milind Sattur, senior consultant - advertising and media research.
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