TV vs online: who’s winning the best bang for buck battle?
While the anatomy of TVC and online advertising mediums has been much discussed, a direct comparison of advertiser value is more elusive. But with so much video now consumed online (and online content consumed via TV and other screens) and more advertisers placing TVCs there, directly comparing the value of each medium comes into question. So, which one offers the best bang for buck? And how does one go about comparing value?
Here’s my stab at it. According to Statistics New Zealand data there are 1.7 million New Zealanders aged 15-44 years. Using Windows Live ID information I know that in the same cohort there are 870,000 people on MSN New Zealand. Placing a video ad on MSN New Zealand (frequency capped at one) would reach 51 percent of all 15-44 year olds. By TV standards this equates to 51 tarps. At a $20 CPM (cost per thousand impressions) MSN’s 51 TARPS would cost $17,400. Which means the cost per TARP (CPT) is $341.
$341 might be a bargain, or a bit pricey. And different TV network times (peak/off-peak), demographics, and TVC duration – 15”, 30”, and 60” – will impact the value, or otherwise, of the Cost Per Thousand (CPT) rate. Who knows (well, your friendly TV sales rep should be able to tell you)? But at least advertisers have a comparative value measure to work with.
Not so long ago online video advertising lacked legitimacy. Stunted broadband, compatibility issues and shoddy online delivery technology consigned online to the planner’s portfolio of ‘emerging’ media options. But these limitations are history and advertisers increasingly vote with their feet.
New opportunities, such as web-enabled TV, and proliferating online video (advertising and entertainment) offer audiences more viewing options, in terms of what they watch, how they watch it and when. Convergence and slowly improving broadband are bringing the geeks back to the TV lounge. Soon, there will be no such thing as a computer geek – just more ugly people and pizza boxes in your lounge.
Video is king. Who cares about the delivery platform when availability is so unrestricted. Sure, when it comes to reaching a mass audience TV is hard to beat. But these days advertising is less about mass and mostly an exercise in engaging a defined group, on their terms (when and how they like to watch).
The time is right to establish a common industry measure. Just putting it out there.
Rick
July 27, 2010
You must be joking. Liz, I suggest you contact someone at Nielsen to tell you the meaning of a TARP. A TARP is a measure of those who actually saw the ad, not those who had the potential to see the ad, which is what you have described. As less than 1% of video is watched on line compared to 99% on television, I think you'll have some way to go to convince any agency person worth their salt that your numbers stack up. Maybe next time you shouldn't just take a "stab at it."
StampTramp
July 27, 2010
I thought a tarp went on back of a trailer full of leaves? hang on i am just going on line and watch some video adverts….ha ha ha good one Liz…I agree with Rick your stab has got the Tarp backwards making you look like a………………………PRAT
Rick with a silent P
July 27, 2010
Um, what's that really popular online video sharing site called, again? Oh, yeah. Youtube. Anyone else tried it?
Kevin Blight
July 27, 2010
There is plenty of room for discussion in terms of the content of the article and the associated commments,all very worthwhile , but one of them is that a TARP (awful name) is not a measure of those who actually saw an ad. It is in fact an "opportunity to see" an ad. Best readers go back to Nielsen to ask what that means and to the TV neworks to ask why they dont provide minute by minute ratings.
CS
July 28, 2010
How do you measure how many people actually see the ad on TV with 400 boxes?
And why would anyone contact Nielsen for answers?
2 Cents
July 29, 2010
@Liz – WTF?!
@Kevin – not so – OTS is not the same as TARP that is unless ALL opportunities to see turn into GRPs and all those who saw the ad were all in the 'targeted' audience
@Rick – almost right, more specific – it’s the 'targeted' audience who saw the ad
Gross Rating Points (GRP)
A term used in buying time for TV ads. If an ad is shown twice, and seen by 10% of people the first time and 8% the second time, it achieves 18 GRPs. A more specific version of GRPs is TARPS.
TARPs
Target Audience Rating Points. A term used in audience research for assessing the audience to a commercial. If a TV commercial is watched by 10% of the target audience it achieves 10 TARPs. When all the TARPs for individual commercials are added up, they become Gross Rating Points (GRPs).
Target audience
The type of people aimed at by a broadcaster, publisher, or advertiser. E.g. an ad for retirement villages might have a target audience of people aged 65 and over who live in their own homes.
In a broadcast media Gross Rating Points (GRP's) are used in media buying and media effectiveness analysis. They represent the Reach or audience share of your spots or placements (a function of what stations you buy and when the ads run) times the Frequency or number of spots (advertisements) run. Each GRP represents 1%.
Over a period of time and with multiple impressions, the GRP can be 200, 500 or more. For example a GRP of 100 could mean that you bought a hundred spots with a 1% reach or that you bought 2 spots with a 50% reach.
Targeted Rating Points are a refinement of GRP's to express the reach time frequency of only your most likely prospects. For example, if you buy 150 GRP's for a television spot, but you know that only half of that audience is actually your market, then you would state your TRP as 75 to calculate your net effective buy.
In online the model should be the same (or so we hope one day it will be) – of course the catch here is that online publishers have to allow their audience measurement to be compiled by a single source and where that 'source' must be able to determine the audience duplication across ALL publishers participating in a specific market i.e. New Zealand.
That said, here's an example of how things might one day work (or at least my take…)
1. Advertiser buys 1000 impressions from say 5 publishers – that’s a total 5000 impressions – let’s call this gross opportunity to see as each impression provides that potential 'opportunity' – what is unknown here is the reach, target-reach and/or frequency.
2. Those 5000 impressions could then be analyzed against a central measurement repository which determines that across those 5 selected sites say ALL users that go to site 1 also go to site 2,3,4 and 5 – meaning that the campaign is more likely to result in a 1000 Reach x 5 Frequency as users would see the ad across the same five sites – this is of course on the assumption that those 1000 impressions are also 1000 'uniques' – if there is duplication i.e. 100 uniques each visit each site 10 times, then the reach is actually much lower and the frequency is much higher – in this example it would be more like 100 uniques x 10 frequency per site x 5 sites for a total 5000 impressions purchased – OR 1 reach x 50 frequency
3. So our campaign is targeted to reach 100 uniques with 50 opportunities to each unique see the ad – translate this to an estimated GRP value and we have 100 people WHO SEE THE AD 50 times which equates to 100 as a percentage of the 'online audience all people' x 50 = (100/2000000)as% x 50 = 0.25 GRP
4. Now of those let’s say only 20 of them were the "Targeted Audience" i.e. males 25-35 — this means that the TARP is 1/5 the GRP – 0.05 TARPs
5. Lastly, let’s say this is a 'video' campaign and the cost for all the 'impressions' was $50 CPM – or 50 x 5 = $250… this means it cost $250 to buy .25 GRPs or $1000 per GRP (1% all people – online audience)
Advertisers often never see this because publishers, ad networks, etc each run their own set of numbers to measure their own specific performance (and of course they actually know how to measure as clearly Liz demonstrates that not all publishers actually know how to do this).
For now the online space is unlike TV that has a more unified reporting and measurement standard that all stations subscribe to …till then its apples vs. oranges – and the wheel goes round and round and round!!
CS
July 29, 2010
Funny how no one can agree on TARP is… long live TARP (and TV).