Technology, Venture Capital, Private Equity

“Lies, damn lies and statistics” is an expression that aptly fits the media measurement industry across the board cutting across all media types. Right from the oldest media form – print to the newest – internet and all the intermediate ones (television, outdoor etc), procuring precise statistics for audience related information has been as fruitful an exercise as chasing a mirage on the hot desert sands. What’s even more surprising is that this is getting progressively worse and not better with technology advancements. Lets just focus on the two most important ones here – television and internet.

Television still remains by far the most important medium for the big brands. Advertisers pour billions of dollars into TV ads each year. Yet, the TV ratings industry still works largely on almost primeval technology. Nielsen, which is the pioneer and industry leader still relies in large part on audiences to fill in viewership diaries, where they record their viewing habits. If any other entity, which can’t boast of the history of Nielsen were to even suggest such a methodology today, it would have been dismissed off as a joke. That Nielsen gets away with such archaic ways is suggestive more of the clout they wield than the authenticity of their means. They do supplement these with automated recording meters. But, even here, the numbers are no way even near to being adequate for being taken seriously. For instance, in India, with a TV audience of nearly 600 million (assuming an approx. penetration of 60%) has less than 10,000 meters to track viewership. That is one meter for every 60,000 viewers. While on the one hand, the TV ratings industry itself seems stuck in the Jurassic age, on the other hand, tech majors such as Google and eBay seem to be zooming on the television high street. They are devising means by which TV networks can auction ad spots in real time to advertisers based on real time viewership ratings. So, a Pepsi doesn’t have to commit millions of advertising rupees to ESPN for a cricket match beforehand. It can wait to see how India actually fares in the match and accordingly adjust its spends. Great. But, how will all this work if the ratings industry remains in its current state of limbo? And it is not that alternative technologies have not been available. For instance, in India, there is a company called aMap that has developed a GSM based technology to collect live viewership data. However, given the stronghold of TAM over the value chain (they are affiliated to WPP, which also is the largest media buyer for advertisers), such innovative startups have found it hard to take root. And, advertisers’ attitude in this regard for some strange reason appears at best, lackadaisical despite the paradoxical fact that the explosion of new technologies on the TV viewership front such as PVRs, conditional access and space shifting (Sling media) necessitates a much more proactive response from the ratings industry.

Lets now turn attention to the internet. Things here seem to be definitely better, but still nowhere near the advertisers’ promised land; the recent discussion on the blogosphere about Alexa’s ratings for YouTube being more than that of Google being a case in point. Take any site and the ratings that the prominent agencies (such as Hitwise, Comscore and Alexa) throw up are so vastly different that one is left wondering as to why it is so difficult to collate such data on such a trackable medium as the internet. Here again, technological advances such as AJAX have made life a little difficult for tracking agencies since pages can be served without hitting the server, but tracking agencies are again culpable of woefully lagging the tech curve. Maybe that’s the reason, a CPC model such as Google’s has become such a hit the spam click problem notwithstanding. At least, advertisers don’t have to depend on dubious tracking agencies for measuring viewerships.

In summary, what’s clear is that the rating problem is one that is begging to be solved and my guess is its only time before we see major disruptions in this space.