Jon Watts, Managing Director of CIMM joins Michael Beach to discuss the evolving TV and streaming landscape, measurement complexities, and potential measurement advancements through emerging technologies. Watch our latest Screen Wars Thought Leader Interview here and read the full transcript below!
MB: Hi Jon, welcome to Screen Wars.
JW: Thank you so much, Michael. It’s great to be here.
MB: Would you mind giving us a little background on CIMM and the problem you solve?
JW: CIMM is not a new organization. It has been around since the 2000s, when the major TV networks founded it, and the main goal for the organization was to promote innovation in measurement. They were specially interested in having an organization that would focus on exploring the use of central box and ACR data to support more granular measurement. Particularly of streaming services, which were growing and becoming an important part of the market. I took over at CIMM last year after my predecessor (Jane Clarke) retired. I think when Jane looked back at her incredible career at the summit, was able to point with pride at the huge contribution that CIMM had made to supporting the development of a whole new paradigm for measurement.
Last year we reset CIMM’s mission, and now we describe our mission very straightforwardly as “promoting and cultivating innovations, best practices and improvements in measurement, metrics, and data, across the TV and the broader media and advertising ecosystem. We tend to think about it in terms of three pillars: Measurement and currency development, new metrics, and data enablement and collaboration. And our mission covers all the significant aspects, like identity resolution, addressable advertising and targeting, and data quality. These topics represent a wide range of things that our members are really focused on.
MB: CIMM has grown to more than 70 member companies, based on your website. What makes a great fit for a company in CIMM?
JW: That’s a great question. When I started at the organization, our members tended to be larger companies. We were doing very well with the big networks and agency groups, but I had a strong feeling that we needed to broaden and deepen our membership. The world of TV has gotten much wider during the last few years, entry barriers have come down, and the smart TV players are critical participants. We have a growth of programmatic trading platforms, data has enabled innovation to flourish in the measurement space. And we really want to expand the membership based on the idea that exposing new perspectives, insights, and experiences to our coalition helps to drive more productive positive conversations. So we really try to position ourselves as a nonpartisan pan industry group.
We want as many organizations as possible to come and be part of CIMM, whether they are large or small, as long as they have interesting and valuable things to contribute. We’re also about to launch an international membership tier. So, we are finding an increased interest from companies around the world in what’s happening in the US, where this unique transition to a multicurrency marketplace is happening, along with some very particular market developments. My experience was always that Europeans had some interest in what was happening in the US, while Americans were a little, but not very interested, in what was happening in Europe with the JICs (Joint Industry Currencies), but we’re finding that the interest is increasing. We are seeing innovations here and overseas, which all parties want to understand. So we’re aggressively building out those international relationships right now. We see it as a great opportunity to build bridges and learn from what’s happening in other markets.
MB: What was your path to get into CIMM, and what are the challenges of going international with the Coalition? We already have a lot of fragmentation in the US, and you are probably dealing with that, but amplified, internationally.
JW: Yeah. I spent most of my career working for various international consulting firms in the UK, always focused on media and advertising. I started my career in the 1990s, around the time of the internet explosion. For a long time I was the internet and digital media guy, and then I started working more around the TV and video space, and with the big internet platform businesses when those started to converge. So we were spending a lot of time helping big TV companies understand Google, YouTube, Facebook and more. And around 2015, I started to work with various partners, pulling together coalitions of willing and like-minded companies to design pieces of work that would move the marketplace forwards. We did some interesting projects looking at the use and application of TV data across the ecosystem.
We also worked looking at the evolution of TV measurement in 2016, looking at different European markets and how they were adapting and evolving their measurement offerings. It was those coalitions that led me to CIMM. I met Jane Clarke towards the end of the last decade, and we hit off a friendship and spent a lot of time collaborating. Jane participated in some of our European work, and some of our European partners and companies started engaging in the US marketplace. It’s also worth saying that the UK marketplace was becoming more influenced by the American marketplace. Comcast acquired Sky, Viacom Paramount bought into Channel Five, and Google and Facebook became the biggest media owners (from an advertising point of view) in the UK market. So more and more of our work was international and multi territory, which led me to the US, resulting in my move over here in 2019.
MB: I’m interested in anyone kind of moving from digital to TV, because that’s similar to our path. What was your thinking when you made that transition, did you feel like you had a different perspective?
JW: I’ve always been interested in the new things. The old things have a lot to add, and are hugely valuable, but we happen to live in a marketplace that is changing very, very quickly. We are in an unprecedented period of change. Helping companies understand the direction the marketplace is moving to, the current opportunities and challenges, and how to mitigate and address those in the best way, always appealed to me. Looking back at the year 2000, I think we hugely overstated, in general, the impact of new media on old media. Obviously, new media hugely disrupted industries like printed media, or recorded music, but I remember seeing forecasts back then predicting linear television to be dead by 2010, and saying that over 50% of consumption would be on demand.
The level of disruption in the TV space was hugely overstated. We have clearly seen a huge amount of disruption, and I think it’s been positive. We’ve lowered the entry barriers to bringing new video services into the marketplace, and that has led to a huge increase in the amount of choices for audiences and advertisers. Now there is vastly more content available in your typical household, but at the same time, TV organizations around the world have done a very good job at capitalizing on these changes to better serve their customers. Look at things like streaming services and their content libraries. You have more opportunities to watch what you want, whenever you want, and the quality of the TV, even the signal itself, has improved dramatically. I remember the days of SD, and when you contrast it with a 4K or 8K signal now, there is no comparison. TV has become even greater than it was, and that’s a testament to the medium’s ability to adapt to the new innovations in the market.
MB: I agree completely. The content is incredible today. We think a lot about the business model of TV, and of video in general. Our big picture view is that fragmentation will prevent any company from getting a massive subscriber base like they did in 2010 (like pay TV in the US). However, advertising rates are going to have to go up because you’ve got lower ad loads coming from streaming. But in order to do that, you’ve got to improve the value proposition to the buyer to be willing to pay more. I think that’s where the measurement space is crucial. If we can’t succeed there, then it’s going to be tough for the market to keep growing at the rate it’s been in the last 10 or 20 years.
JW: I think you’re right. Any economist would generally say that when you increase the level of competition in the marketplace, you increase the number of industry participants competing for consumer spending, for eyeballs, and for ad revenues. In general, we’ll see the market share go down. The incumbents will see their fortunes decline to some extent in terms of share, at least. Competition drives fragmentation in many marketplaces. There are clearly transitional challenges. It’s worth saying that the experience of different markets with fundamentally different structures, economies, cultural tastes and preferences varies very widely.
I worked as a consultant for Sky when they began expanding in Europe. In the UK, Sky’s found success through the incredible appeal of the English Premier League, described by Rupert Murdoch as the “battering ram” for pay TV services. He acquired the rights, rolled out satellite dishes and did an amazing job of building out the pay TV industry in the UK market. In Germany, the Bundesliga just doesn’t function in that way, and I think Sky was somewhat taken by surprise when it acquired Bundesliga rights, but didn’t see the same steady trajectory of growth in its subscriber numbers. If you look at different markets, their structures and dynamics vary very widely. Here in the US, you have an unusual marketplace. Pay TV has been historically expensive, and one of its characteristics was the lower levels of competition due to the dynamics of the cable industry, at least until the rollout of satellite and IPTV services. Prices have been higher and ad loads on network television are higher, which has supported a flight to ad-free environments.
Some people I speak to say that, as a customer, the quality of the advertising experience is also lagging behind other markets, and I think all of those things together have helped drive a thirst for alternatives in some marketplaces. Pay TV isn’t suffering quite the same challenges in much of Europe. I tend to think Pay TV isn’t dying, it’s just being transformed and creating new iterations. When we look at the rollout of virtual MVPD services, they’re growing very rapidly, and they offer a really compelling alternative for many consumers, and a better way of consuming those types of channels and offerings.
Pay TV is a huge industry, and it’s clearly going to transform. Any transformation when you are changing the engines of the plane mid-flight while in a dog fight is going to lead to some disruption, but I’m confident about the future of the industry. And all of that has implications to measurement.
I think we’re now in a hugely encouraging and novel place in the US marketplace. For example, in Europe we have JICs or MOCs (Media Owner Committees), and most marketplaces have tried very hard to maintain a single currency. In practice, the extent to which those single currencies have been dominant has been somewhat overstated. For example, many media owners in the UK will say that they actually trade in five or six different currencies, but the main JIC led currencies like BARB (Broadcasters’Audience Research Board), undoubtedly remain the main trading mechanism. In the US, we’re trying a grand experiment. Something very new and different, and I think that deserves encouragement and support, but this is a moment of transition. The JIC is just up and running. We don’t have access yet to standardized data from the JIC, which will clearly change the way many of the US’s measurement services operate.
The calibration panel that the Video Advertising Bureau (VAB) and the Association of National Advertisers (ANA) are rolling out has still yet to launch. We’d expect these kinds of shared assets in the measurement space to lead to quite significant changes. I think it’s fair to say that competition between measurement providers will lead to cheaper prices and better products, and more optionality for both the networks and advertisers in what they use, and how it meets their needs.
MB: That’s interesting. We’re some weeks past the Upfront presentations, and alternative currencies are in the news. You said in the international market that we’re going through this grand experiment. Can you give us a reality check on where are we there today?
JW: Like I said, we’re in a transitional period. So I think the big agency groups are still working hard, going through the mechanics and logistics of transitioning to a multicurrency planning and buying environment, and that will take some time. We have had interesting presentations from a number of agency groups at our regular CIMM meetings, and they are positive about the impact of these changes, but they are also realistic that work is still necessary to fully unlock the potential of the multicurrency marketplace. The big TV networks are all in, that’s very clear. I think the JIC is a hugely positive step. Measurement is a team sport, and the JIC as the new collaborative structure can have a really important role in supporting the development of the marketplace. But we are still in relatively early stages. We have companies that are still ingesting new data sets that change their offerings.
We have streaming data from the JIC, and we have calibration panel offerings still gaining hold. Nielsen is still gearing up to launch Nielsen ONE, with the current target of coming on stream at the 2024 Upfront presentation. So there’s a lot still that has to happen before we even get past the beginning of the beginning, if you see what I mean. That said, we can already see positive changes, and some newer entrants are innovating at a furious rate. Companies like VideoAmp, and iSpot, among others who are playing in the currency game, are really driving the market forward by doing interesting things. We’re also very positive about what Nielsen is doing with Nielsen ONE. It is going to be a huge step forward for the marketplace, and it will bring some really compelling new capabilities into the market. Dealing with streaming data can be painful, complex, and challenging, but what they are doing will mark a big improvement over the previous panel based system.
MB: I want to go back to something interesting that is slightly off-topic that you said before: The sports rights with soccer. We’re in the US, and we’re seeing the rise of Formula 1, and we’ve seen the Premier League have an impact, and we’re always anticipating that the NBA will go out and be international. It’s interesting that you said that, in Germany, Sky didn’t get the same gain from a sports rights deal as they did in England. Probably the biggest thing in that topic was what happened with the Indian Premier League cricket with Disney and Paramount. How would you look at that if you were these networks, as sports go global, but they’re still doing country by country deals.
JW: I’m fascinated by sports. I’ve worked with pay TV companies for many years and with big sports rights holders during the last decade, and the sports marketplace is fascinating. Sports in the US accounts for an extraordinarily large proportion of total live linear viewing. But if there’s one big lesson that we’ve learned from the past two decades, it’s that no sport has a given right to remain top of the pile. As tastes change, sports has to change. A great example is cricket in the UK. Cricket is a very seasonal sport. It’s played in the summer, but not in the winter. And, historically, in the UK it was a very long game and as entertainment options proliferated, it had an impact on the demand. And the English cricket board, and other authorities for clubs, did a really fabulous job of innovating the format by rolling out shorter, more action-oriented formats which fit better with current entertainment preferences.
Sports also has some interesting and inherent limitations. Let’s say you work with the English Premier League, since it’s mostly watched live, it is hard to find kickoff times that work for multiple time zones around the world. There’s been lots of talk about playing Premier League matches in the US, and about the various US sports federations playing games in the UK market, and other territories, and I think we’ll see that grow. But there are limits to that, which I think will always mean that sports remain very heavily nationally oriented in outlook. We would laugh in the UK at the World Series, and people would say, “Where’s the rest of the world?” There are a few countries, but the UK doesn’t field the baseball team. Soccer remains the great champion from a global point of view.
But if you look at the numbers behind cricket at the moment, it is one of the most valuable sports in the world. The US federations have some big international opportunities opened to them that they’ve been considering for some time. And as the US marketplace becomes more complex and challenging in many aspects, the overseas marketplace may start to offer increasingly attractive opportunities. It wouldn’t surprise me to see the leagues and federations addressing those opportunities in a more robust and concrete way during the rest of this decade.
MB: Sports is a really interesting topic, because if you look at the revenue projections for the media rights, they’ve got it growing well into the future, which has increased the value of the franchises. You’re seeing that in soccer, and even in the NHL, with the Ottawa Senators, who are going to go over a billion dollars. It’s quite incredible, and I come back to that economics problem of, how are they going to continue to pay for this? Obviously, it’s a combination of subscriptions and advertising and sponsorships, but I’m really fascinated by sports that go global and are able to add revenue from just opening up new markets. It’s real interesting.
JW: I agree. The value of sports is fundamentally driven in most markets by two factors. One, is the inherent, underlying appeal of the sport itself. Second, is the level of competition for the rights. How many well-funded players who believe they can make a return from their investment are competing for those sports rights? Taking the UK as an example, the biggest growth in the value of the rights of the UK Premier League came at a time when Sky and British Telecom (BT) were competing head-to-head in the pay TV market. It was some clever packaging by the Premier League, plus the ever escalating levels of competition between those two players, that drove the huge growth in sports rights during the 2010s. When BT exited from the market, the Premier League had a problem, and the last bidding round was actually flat.
They agreed with most of the major bidders, and they got a flat settlement with no inflation, in part due to COVID and the pandemic. At least in the UK market, it’s quite difficult to envisage other well funded bidders affording to bid for the biggest and most attractive packages of rights, unless they do so for reasons like buying market share. There is also the “Apple model,” where you’re cross subsidizing that cost.
Interestingly, for years there were rumors that, whenever there was a round for the rights, the Premier League would leak stories to the press with the purpose of driving up the prices in the auction. They would suggest that Apple would start bidding high for sports rights, but this has not happened so far. I think it’s because, when you start thinking about how would an Apple bid for sports rights really work, it’s hard to see it in practice. Are you going to withhold games from everybody who doesn’t own an Apple device?
How new does the Apple device have to be? All sorts of questions like that. It’s complicated. Here in the US you have a unique marketplace because you have an enormous contiguous media market with lots of regional segments, with a lot of very well funded players, all of whom have an overtime invest in sports rights. And you have these really interesting new bidders who’ve come in and are gearing up their investment, plus you have the growth of fighting sports. Look at the recent mega-merger in the fighting sports space, which is an enormous enterprise by international standards. It’s four or five times the value of Manchester United, possibly the most famous UK soccer club.
The US is a very big and well-funded marketplace with unique dynamics, which should see it remain healthy for a considerable time. But the question I’m really interested in is, can the existing major sports franchises and federations transform in order to grow their international appeal and to bring in younger audiences? And secondly, will we see new challenger sports coming in and capturing significant time and attention?
Recently, I had a bizarre and fascinating conversation with someone about pickleball, of all things. There are efforts to drive the commercialization of pickleball, which inherently feels slightly bizarre. It is an entertaining sport, and it is starting from a very low level, so there are lots of growth opportunity out there. It’s a really interesting and dynamic space, like the rest of the entertainment marketplace is currently. I think, if you’re a viewer, this is the golden period for you. There’s never been more creativity and innovation and opportunity for creators to bring services to market, and for good things to scale very quickly.
I’m sure you’ve had lots of conversations in which Mr. Beast has been mentioned. He’s often mentioned as a YouTube-born creator who’s now funding content that a big network might find palatable. The barrier between professional content and online content creator, which is clearly professional in many cases, has clearly come down. We’ve seen a huge democratization of production capabilities across the marketplace with HD camera recording equipment, and studio setups, and green screens. And, of course, I have to talk about AI at some point. AI is going to drive more transformation and change. We’re going to see a lot more change, and it’s going to be exciting. We’re democratizing video creativity in a way that was very hard to foresee 25 years ago.
MB: Mr. Beast is interesting, because I always ask people, “do you consider YouTube to be TV advertising?” Or premium video. Because that’s the question that brings up a disconnect between buyer and seller. I was on a panel in New York a couple of weeks ago, and half of the people were like, “absolutely,” and then, the other half of the people were like, “no way.” There was no middle ground. Where do you see disconnects between buyers and sellers in the overall market today, especially in the premium video TV space?
JW: It’s such an interesting topic. We’re running a summit in Cannes and our opening panel will involve executives from NBCU, YouTube, Google, Omnicom, and Karen Nelson-Field from Applied Intelligence. She will be talking about the content quality debate, which has been running intensely for about six to nine months. Like you, I don’t see much sign of a consensus breaking out anytime soon. I hear at least three opposite perspectives. On one hand, a set of organizations want to clearly set out that “made for TV” content. That is, content that is compliant with various rules and regulations, is delivered professionally by teams, goes through an editorial compliance process, and offers a brand safe environment. All of these factors are different from most User-generated content. I hear that position regularly, and there’s clearly some truth in that.
A second perspective is the democratization perspective, which states that there is lots of user-generated material on long tail video platforms, that unlike TV content, has low production standards but with a structure that is very TV-like. This content is increasingly being watched and finding its way onto TV screens thanks to smart TVs and other devices around the world, and many audiences would argue that is basically TV. And then, there’s a third viewpoint, which says, “You go and have your debate, but I’m the buyer and I don’t like sellers telling me the inherent quality and importance of their product for me. I make a decision based on the effectiveness of the advertising I run on your platforms.”
This debate ties directly into our measurement focus. There is one set of people interested in seeing us define quality first, and then measure reach. And there are a second set of viewpoints who say that we should measure reach, and then look to define quality and apply dividers and discounts. Not all the reach is worth the same. Not all impressions are created equal.
This debate will be running for a while. I don’t think we’re going to see a definitive answer breakout. The marketplace is big enough for different approaches and perspectives. Recently, I had a conversation with a major agency executive, who said the advertising market is very wide. There are a very large number of different brands out there, from mass market brands in the FMCG category, to challenger brands tightening a very particular niche.
It seems unlikely that all those advertisers, with their very different campaign objectives and positions in the market, are going to arrive to a single common definition of what “quality” or “premium” means. They’ll find value in different places and ways, and they will be willing to pay differently for it. That seems a reasonable perspective to me. Some people care about the quality debate enormously. They want to see their ads running in the Super Bowl, or in Max, in between Succession, while there are others who have a different view, and the market’s big enough for both of them.
MB: I agree with that. I always felt like the digital ad space was like that. People have completely different KPIs. We got into audience targeting very early, and we were willing to drastically overpay for an impression that would reach our audience, instead of reaching someone who was not part of it. I always said the buyer would value their own inventory in a way that could be completely different from anybody else. Let me finish this with a final question. If you could wave a magic wand and change one thing about the video measurement space, what would it be?
JW: I would try to move the measurement marketplace away from the perception of certainty. When you take a detailed look at different measurement offerings, all of them involve estimates, and assumptions, and modeling. Nowhere in the measurement space we have fully deterministic, 100% accurate data. And the more we agree that measurement inherently involves modeling, assumptions, estimates, and editorials to correct flaws in the data and to account for biases, the better off we’re going to be. There has been a discussion for some time about the idea of applying a Moody’s-style confidence rating to different offerings. And you could argue that the MRC plays that role to some extent, although in a very different way.
Those schemes would be very difficult to apply, and sometimes I wonder if we’re heading into a market where that becomes more important to buyers. At the moment, we have a “one size fits all” accreditation, where you’re either accredited or you’re not. But perhaps there’s space for different gradations between those two extremes.
At CIMM, we just did two really interesting studies. First, a piece looking at identity resolution and data matching in the TV space. And secondly, a piece looking at the veracity and accuracy of house holding data. In both cases, the central lesson is that data matching is far from an automated process. It’s messy, fiddly, and complicated, and the sooner we all recognize that, the better we can get with making progress. There’s a famous quote that applies, “We mustn’t let the impossibility of perfection stand in the way of our quest for progress.”
MB: That would be a huge thing because even the process of writing methodology docs for these things is overwhelming. And from a buyer’s perspective, it’s all statistics, and confidence levels, and then everyone has to string together multiple data sets and glue them together. People have to understand that you want to figure out the quality of the modeling and the methodology, not assume that it is correct to the 10th decimal point.
JW: Excitingly, our modeling is becoming increasingly sophisticated. If you look at the advances in areas like synthetic data, and most notably, generative AI, these have the potential to be transformational. Of course, we’re still in the early test and learn stage. The WFA’s Halo Project, and ISBA’s Project Origin are using vids, but they’re not commercially deployed yet. Synthetic data is very important in some fields, but it’s still gaining traction, in the media planning and buying space.
We’ll see these methodologies become increasingly important as we look to capitalize on huge advances in computing power. I read a very interesting about the potential of quantum computing now, which is still in development. We’re still away from applying quantum computers in the measurement space, but it is clear that there are huge advances being developed that we can apply to some of these areas in the future. It’s going to be exciting to get ready for those and see how they improve the measurement marketplace.
MB: Well, Jon, I’ve loved this conversation. I know our audience will also love it, and I’m very grateful for your time.
JW: It’s been a pleasure, Michael. Let’s do it again soon.
MB: Thank you.
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Jon Watts is Managing Director of CIMM, the Coalition for Innovative Media Measurement. He has 25 years of professional experience in media and advertising, in the US and internationally, working as an advisor and consultant to major media and technology enterprises, investors, policy makers and regulators.
At CIMM, Jon is leading a range of initiatives, including work on the future of cross-platform measurement, the transition to a multi-currency market, and the use of data across the TV ecosystem. Jon is also Executive Director at The Project X Institute and Editorial Director of Beet.TV’s events and industry retreats.
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.
