Howard Shimmel, Chief Strategist at datafuelX, shares the challenges of measuring video across different platforms, the role of data and analytics in the industry, and the importance of a reliable and accurate panel for measurement. Watch our latest Screen Wars Thought Leader Interview here and read the full transcript below!
Michael Beach: Howard, welcome to Screen Wars.
Howard Shimmel: Thank you, Michael. It’s great to be here.
MB: I have many questions today. Before we start, would you mind giving our audience a little bit of background on datafuelX and the problem you solve?
HS: datafuelX is a two-year-old startup. We are experts in the world of forecasting and optimization. We are currently working with many major publishers specifically to optimize their data-driven linear campaigns.
At the same time, we are working on a way to improve the way advertisers integrate what they’re doing on linear with what they’re doing in any sort of addressable media. We’re living in a world where it is wasteful if an advertiser buys an impression in addressable media, and that contributes to linear’s frequency challenges. Linear has a different problem: It is reaching fewer people, but it is doing so more often.
Our product, PrecisionX, allows a publisher or an advertiser to forecast where reach and frequency will fall at a unique ID level. And then, it pushes those signals into a Digital Signal Processor (DSP) so that it ensures that they’re not buying impressions that contribute to excess frequency. The advertisers are buying impressions that contribute to either incremental reach or frequency support for people who are going to have wider frequency.
The most important part is that, while there are products that already address this in the market, they tend to wait for a linear schedule to start to run. We’re forecasting based on knowing what the media plan is for next week. We’re anticipatory, not reactive.
MB: Do you think this forecasting creates challenges for the customer? Regarding how they’re used to looking at data backwards instead of forward.
HS: One of our challenges is when people ask if we can produce accurate forecasts to a certain degree of precision. We are not trying to forecast how many people are going to watch a show. We are trying to forecast the probability of the ad campaign reaching people within the next week.
But we’re getting a great response in the market, both from publishers and agencies. With this new product, I’m hoping the market starts to realize the waste that it is if an addressable ad reaches someone who has a lot of TV frequency. There is no value to that. And if you could use analytics in forecasting to avoid it, you should.
MB: Talking about the data-driven lending product, what are your thoughts on that market and the growth opportunity?
HS: Great question. As an industry, we need to acknowledge that trying to do data-driven linear based on data from 40,000 households (like Nielsen) was a major challenge. Those challenges come from two problems. First, you had cutoffs for how big the target needed to be statistically reliable in terms of your forecasting.
And the other problem is that, since so much TV viewing is long-tail, lower rated, you didn’t have a line of sight to a lot of inventory that a publisher would want to monetize or an advertiser and agency would want to leverage. Now that companies like VideoAmp gain traction, their sample size of 40 million devices means that you could do data-driven linear for any target where it would be relevant to be on national TV.
And once you identify that target, you could forecast with a high degree of accuracy, low-rated inventory. While everybody talks about alternative currencies replacing Nielsen, I think the big value is the ability to have the right dataset to drive data-driven linear.
From a product standpoint, we’re bringing a new way of forecasting that is more accurate than some of the available products in the market.
And we’re also bringing a new science around deal optimization, where we use analytics better to allow a publisher to get more yield out of a deal on behalf of an advertiser. Or help an advertiser get more yield with the publishers they’re dealing with.
We are confident about our opportunity because it involves both the data and the data science. Linear will be around here for a long time. It’s not going away. We think it’s the right time to give the market a boost based on better capabilities.
MB: The poor experience with repeated ads on streaming is well documented. What do you see on linear? Or, what similar issues have you encountered?
HS: Five years ago I was running research at Turner, and I understood the national advertising market. That market is suffering from not having enough advertisers. And the ones that are staying want to keep their GRP goals very consistent to what they’ve been in the past. But since linear is eroding at a very fast rate, with ratings declining around 15% each year, they’re buying more spots. And when your reach is declining, and you have the same GRPs, that results in higher frequency.
Linear is just as bad. One of the contributing factors is that there are just not enough advertisers. You can look at Facebook or Amazon, and they have millions of US advertisers compared to national TV, where only about 2,000 brands are prominent.
MB: Speaking of measurement and new currencies from a real high level, where are we currently at?
HS: We’re in a really interesting place, and I say that after being around this business for over 40 years. It’s an interesting juxtaposition, because Nielsen has had a monopoly in national and local TV measurement for a very long time, except for some competition from Comscore.
Now you have companies who are establishing themselves as viable alternatives to Nielsen, like VideoAmp, and iSpot. A year ago, NBC announced they would be using iSpot, and recently extended that and said that they’re also going to use VideoAmp in the upfront.
You have viable alternatives at a time when Nielsen is stumbling because of COVID, which was a situation that no company was prepared for. It was a once in a lifetime experience. They lost the MRC accreditation. They are struggling with being clear about the value Nielsen One offers to the market.
This is a scenario where you have well-established competitors while the incumbent is challenged. Also, the crucial part is that now the market accepts measurement that comes from big data. VideoAmp has set-top box data, and ACR data. They have a way of modeling demographics. And the market is okay with doing that.
Maybe this is not a great thing to say as a researcher, but we’ve lost some of our stuffiness. Measurement is not as pristine anymore. It really can’t be pristine in a world where there’s so much fragmentation. You need massive sample sizes. And the market couldn’t afford a Nielsen panel of a million homes, but maybe that is what you need to accurately represent what’s going on TV.
It’s a great time. I think the market didn’t anticipate all the challenges that would come with doing business off of other currencies beyond Nielsen.
This year, the market is ready. It would not surprise me if you see 30-50% of upfront deals being done using something different from Nielsen.
MB: Who do you think benefits the most in the short term from the shift in measurement, buy side or sell side?
HS: I actually think they both do. I don’t think anybody comes out on top. If you’re a programmer, with more ratings, more of your content will be a bit lower rated. You need good data, and you need big data to be able to reflect that.
But if you are an agency, and you have constraints with your supply, the last thing you want to do is to not measure a bunch of your inventory. I’ve always been a proponent that linear TV is a great media channel. But measurement has not allowed it to unleash its full value.
And having big data and the capabilities and data-driven linear helps unleash that. It would be great if we stopped using demographics like “Women, 18 to 49, execute TV.” And I think the buy side and the sell side both gain equally.
MB: A lot of sellers are announcing that they are working with VideoAmp or iSpot, saying that they’re the best market because of the economics in the short term. I’m surprised that more agencies and buyers are not going out there.
HS: There are a couple of reasons for this. One is, if you’re a publisher now, you need every capability in your toolkit to drive new yield. And if using one of these alternative currency providers enables that, you need to take advantage of it.
Also, there is more frustration with Nielsen, especially regarding how much these companies are spending with Nielsen. That’s a gigantic part of the equation. I think the publishers just tend to drive innovation a little faster than the buy side does.
MB: Coming from a digital background, it’s always been surprising to me that the revenue structure was pretty equal on both sides. As a buyer, sometimes you might use one ad server, and the publisher would use another. Or you would use a different measurement partner.
I believe the TAM for this is much larger than what Nielsen does today. But trying to figure out if it is going to be 50/50 or 70/30 between buyer and seller becomes an interesting problem.
Looking at the big picture, what do you think is the biggest disconnect between buyer and seller?
HS: That’s a great question. I think we should be more sophisticated in our ability to execute media jointly. An example of that could be an agency building, buying and activating a plan. And it could be the publisher creating that plan where we need to move beyond exposure, reach and frequency GRPs as our end goal.
Because not all exposures are equal, both within media and across media. I believe the market could move towards an outcome-based measurement, where you need to make sure your planning datasets include other variables that may be directly correlated with outcomes.
Think about NBCUniversal announcing their One23 event around content quality. Content quality should be one of the attributes that align with better sales response for a given media. I’m a big fan of Bill Harvey Driver Tags, which measure the sync between the content and ads. When I was at Turner, Bill Harvey and I did some research where we showed that better alignment between the content and the ad results in a higher sales lift than when there is worse alignment.
Now it’s 2023, and the entire industry would benefit by moving away from just measuring exposure. And there are a lot of very interesting capabilities that already exist or that are emerging. We need to do measurement right, and we need to count exposure right. However, it would be great if we actually focused on getting better signals to drive more yield and response.
How do we, as an industry, start talking about that? We often put it aside because we’re still trying to get measurement properly. But I think we got to do both.
MB: Quick question, Netflix CPO is between $60 to $85. Is that high, low, or right on spot?
HS: It’s what the market will bear. It’s got to be the easiest thing for an agency to sell to an advertiser. They have brilliant people there, like Peter Naylor and Adam Gerber. I’m sure they had the right estimate going in.
MB: I agree. I think we’re going to look back when they add measurement or any kind of targeting, and it’s going to be a no-brainer.
We talked about new forms of measurement and attention. I know that you and I are both involved and excited about HyphaMetrics. When you see the big picture, what do you think is their role in the market, and what excites you the most about them?
HS: Since I met Joanna Drews and Gerardo Lopez (Co-founders of HyphaMetrics), I’ve been a fan of their technology. The advertising ecosystem has gotten so fragmented in terms of how content gets to the screen. What app is it being served through? What device is getting it to the screen? We got used to thinking that we only needed to measure how many people are watching Big Bang Theory on TBS. We didn’t really care about how much of that content was coming from Comcast or Charter. That was because we sold national ads.
Now, for example, an advertiser serves a combined impression on The Office on Peacock. They could buy it directly through the publisher, or they could buy it through Trade Desk. They could arbitrage it through the connected TV seller. And since the market is so fragmented, measurement needs to have that level of granularity.
And I really believe that the HyphaMetrics approach is like 22nd century technology, with what they do of scraping what’s on the screen, and their ability to tap into all the HDMI ports. And the market really needs to understand that.
Another thing is that, at the end of the day, there are real human beings in the panels we’re deploying, average Americans. And I think it is really smart how they go out and offer a choice in terms of how they count demographics.
I love their technology. I think it’s right for the market at the time. Especially in a world where the market has really spoken that big data, set-top box data, and ACR data informed, by a really good panel, is the way to measure national television or national crossmedia.
I really think HyphaMetrics is almost the ideal panel component to that big data and panel architecture that the market seems to have decided is the right way to measure television.
MB: I love it, because when you look at their offer, there are so many places they could help. I’ve driven our product people crazy with different ideas about all the different places we could use it. There are so many burning needs it helps to solve.
HS: And it’s even simpler, too. For example, if Samsung wants to measure a banner ad on their home screen, ACR can’t find that. The world is not as one-dimensional as it used to be. If you think about some of the capabilities, there’s a lot of great operational activation things that HyphaMetrics is going to inform.
MB: I got one more question for you. If you could wave a magic wand and change one thing about the video measurement space, what would it be?
HS: That’s hard. One thing: That we solved the cross-platform measurement problem in the year 2007, which is when we needed to solve it. It’s not a new problem. I had the luxury of working in Nielsen then, and helping them try to start to roll some of this stuff out.
We should have solved this problem a long time ago. The market would’ve been better.
Something I would say is, focusing on measurement distracts you from focusing on making advertising work. Or, if you’re a seller driving yield, focusing on things you could do to drive more yield for the bushel of impressions and spots you have.
I wish we would’ve solved that, so we could be focusing on some of the higher order things.
MB: It would’ve been a different world, for sure. Well, Howard, I really enjoyed this conversation. I know our audience is going to love it. Thank you.
HS: Thanks for having me.
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Howard Shimmel is a television research and insights veteran with over 30 years of change-making thought leadership under his belt.As the President of Janus Strategy & Insights, he is transforming how companies around the world strategize and position their television marketing offerings, from linear methods to addressable and connected TV. Howard also serves as a Board Member and Head of Strategy for datafuelX, an advanced analytics firm focused on developing best in class decision science models to fuel the next generation of media capabilities, specifically focused on forecasting and optimization.
From attribution to advertising, data to ROI, Howard is carving the path to address the changing trends in the audience landscape, as well as shape emerging platforms and industry innovations. He leverages this knowledge to lead organizations through strategy, planning, buying, measurement, and stewardship. Beyond his role at Janus, Howard is co-founder of datafuelX, an advanced analytics firm focused on developing best in class decision science models to fuel the next generation of media capabilities. Howard also serves as an advisor and investor in many emerging new age research companies, including Hyphametrics, Adelaide, WeAre8, and Humantel.
Prior to starting this company, Howard was Chief Research Officer Turner, where he oversaw all multi-
screen entertainment, news, kids and sports research, as well as corporate analysis and insight-led
efforts. Shimmel played a critical role in driving the company’s efforts around the consumer journey and insights to better capture measurement for both Turner and its partners. In 2016, in partnership with Turner Ad Sales’ Turner Ignite team, Shimmel oversaw the launch of Turner Ad Lab, an initiative whose goal was to make recommendations about linear and digital video ad experience in light of the changing TV landscape.
Prior to be promoted to his role in 2014, Shimmel was senior vice president of ad sales and sports
research for Turner, where he oversaw television and digital research analysis and strategy support for the company’s news, entertainment, animation, young adults & kids and sports advertising sales units. He joined Turner from Nielsen Media & Advertising Analytics where he served as executive vice president responsible for building out an advanced analytic business focused on issues like cross-platform analytics, advanced media targeting, promotion effectiveness and ROI measurement, for media companies, agencies and advertisers. Shimmel’s industry-rich experience includes other leadership roles at The Nielsen Company, America Online, WBIS and MTV Networks. He also served as president of Symmetric Resources, Inc. Over the span of his career, Shimmel has developed research expertise related to technology adoption, methodology and advertising’s impact on sales.
Cross Screen Media is a leading CTV activation managed service for marketers and agencies, built on a proprietary technology platform that enables advertisers to plan and measure advertising across Connected TV and audience-driven Linear TV at the local level. We seamlessly fit into existing workflows to help agencies scale, differentiate and deliver high-impact campaigns for their clients. For more information, visit CrossScreenMedia.com.