Sherrill Mane Presentation

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent

DRAFT

Managing Media Measurement Change: The Making Measurement Make Sense (3MS) Story Presented by Sherrill Mane, IAB June 20, 2012

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 2 IAB 3MS webinar 12 21 2011 NYC

What is Making Measurement Make Sense?

Making Measurement Make Sense (3MS) is an ecosystem-wide initiative to propose standards for metrics and advertising “currency” that will enhance evaluation of digital media and facilitate cross-platform comparison for brand marketing

Key objectives of the 3MS initiative are the following: • Determining the right metrics and solutions • Driving industry consensus around the solutions

• Establishing a measurement governance model


Who is involved with 3MS?

3MS is a joint undertaking of the IAB, the ANA and the 4A’s

These organizations engaged Bain & Company and MediaLink to facilitate and manage the initiative

The Newspaper Association of America (NAA) and the Online Publishers Association (OPA) also joined the initiative as supporters

Nearly 50 industry executives were a part of our steering committee and working teams. In addition, we engaged over 150+ other industry participants across the ecosystem


Why Did We Embark Upon the Journey?

•  Consumers embrace digital media in droves

•  Business and transactions lag behind consumers

•  Digital media need a consistent, transparent supply chain

•  Digital media need to be part of the cross media marketing ecosystem

•  Business leaders and functional experts need forums and mechanisms for change management


Why is this Process Different from Other Efforts to Improve Measurement?

•  Recognizes that measurement and metrics involve multiple areas of the businesses - Workflow - Currency - Inventory Optimization - Inventory Segmentation - Pricing

• Multi-disciplinary

•  Independent consultants •  Not seeking research proposals


Traditional Media Measurement Works on Different Fundamentals from Digital

• Media buyers and sellers accept a shared margin of error

•  Value chain players work within scientific norms •  Agreement on exposure measurement and “currency”

allows billions of dollars to flow through the television advertising supply chain - Planning and buying, - Guaranteeing and stewarding guarantees - Settling up the differences between guarantees and deliveries, make goods or overdelivery

• Reach and frequency of a TV schedule against target demos are readily available

• Reach and frequency across traditional media (e.g.,TV + print) can be calculated


Traditional Media Did Not Get There on Their Own

•  Government intervention brought about the creation of the BRC, The Broadcasting Rating Council, known today as the MRC

•  1960 - 1966 – Congressional committees examined broadcast ratings against a backdrop of - Quiz show scandals - Claims that TV ratings could be manipulated - Lack of disclosure of methodology “No one knows where ratings came from”

•  1962 -Lack of disclosure prompted the FTC to issue “cease and desist orders” to stop misrepresenting the accuracy and reliability of measurements, data and reports

•  1966 – Harris Committee hearings lead to recommendation to create BRC

•  1966- BRC charter, by-laws and process were approved by the government

•  And, today, Congress and the DOJ have reaffirmed MRC’s status (Nielsen LPM and Arbitron PPM)


3MS leaders agreed on Five Guiding Principles of digital measurement

•  We need to move to a “viewable impressions” standard and count real exposures online

•  Online advertising must migrate to a currency based on audience impressions, not gross ad impressions

•  Because all ad units are not created equal, we must create a transparent classification system

•  We must determine interactivity “metrics that matter” for brand marketers, so that marketers can better evaluate online’s contribution to brand building

•  Digital media measurement must become increasingly comparable and integrated with other media

1

2

3

4

5

Link to full press release: http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/pr-061311


• Shift from a “served” to a “viewable” impression standard (proposed standard minimum 50% viewable for one second)

• Introduce an online Gross Ratings Point (GRP) metric, providing reach and frequency reporting of viewable impressions

• Implement classification system and taxonomy for banner, rich media and streaming video ads

• Define standard and transparent metrics for view-through reporting and cumulative social activity

• Establish standards and vendor accreditation to improve methodology for online brand attitudinal studies

In Phase 1, we developed a five-pillar solution for digital metrics

Brand attitudinal measures

Standard classification of

ad units

Define impression

Establish audience currency

Brand ad performance

metrics

Initial implementation priorities

5

3

1

2

4

FAC

ILIT

ATE

CR

OS

S-P

LATF

OR

M C

OM

PA

RIS

ON

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 10

• 3MS working groups refined banner and video classifications and identified operational changes required for adoption

•  IAB will coordinate industry implementation by early 2013

• MRC is developing digital GRP guidelines to issue by end of 2012, with cross-platform GRP guidelines to follow in 2013

• Major vendors are looking to 3MS for guidance on incorporating recommended metrics into methodologies

• Two largest ad servers have been MRC-approved for pilot measurement of viewability, with several others in process

• Publisher pilot generated initial site-level viewability measurement, agency pilots now underway

Establish standards-

setting structure

• MRC refined business plan, with multiple funding models under consideration for board and DOJ approval

• MRC has defined key measurement standards priorities to be addressed by standards-setting committee

Pilot Viewable Impression

• Two largest ad servers have been MRC-approved for pilot measurement of viewability, with several others in process

• Publisher pilot generated initial site-level viewability measurement, agency pilots now underway

Establish digital GRP currency

• MRC is developing digital GRP guidelines to issue by end of 2012, with cross-platform GRP guidelines to follow in 2013

• Major vendors are looking to 3MS for guidance on incorporating recommended metrics into methodologies

Test ad classification

• 3MS working groups refined banner and video classifications and identified operational changes required for adoption

•  IAB will coordinate industry implementation by early 2013

Highlights of Phase 2: Implementation progress

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 11

3MS Viewable Impression pilot efforts are shaping future standards to be issued by the MRC

Develop and test technology Track publisher portfolios

Track live campaign

• MRC verifies server/vendor technology and reporting capabilities to approve for pilot participation

• Ad servers and publishers test functionality and uncover technical limitations

• Test Viewable Impression parameters and isolate factors that influence viewability

• Test advertiser campaigns in live environment

• Further test Viewable Impression parameters and test impact on wider range of inventory

• Assess measurement limitation issues

Technical verification Publisher-led pilot Agency-led pilots

In progress currently


Viewable impression publisher pilot summary results and findings:

•  3MS publisher pilot tested 10M impressions across 16 sites, on run-of-site inventory with a mix of placement sizes, page types and ad positions

•  Viewability of donated inventory averaged 54%, with site-level performance ranging from 67% to 25%

•  Pilot highlighted potential areas for inventory value increase

-  For example, on content-level pages, above-the-fold and below-the-fold inventory viewability converged (56% vs 51%)

•  Pilot confirmed that inventory viewability is sensitive to both time-based and spatial (i.e., % in-view) parameters


MRC is incorporating 3MS recommendations into digital and cross-platform GRP guidelines

Basis for impression

counts

Measurement universe

• Total U.S. population will serve as the universe for digital GRPs, rather than TV households

• Initially, GRP reporting will be limited to national media – local market reporting TBD

• Audience GRPs will be based on viewable impressions

- Reflects age, gender and ethnicity demographics, with ability to add further demo and behavioral targeting

- Enables reach and frequency reporting

• GRP reporting will address both video and banner advertising


Classification aims to reduce complexity and facilitate comparison of ad inventory

Format capability

Display classification criteria Video classification criteria

# of messages

Ad location Ad size User choice

Player size Interactivity

Ad length

-  Image - Rich Media - Rich media

with video

- Small - Medium -  Large

- One or more other messages

- No other messages

- Below content - Above content -  To side of content -  In content - On top of content

- Video plays automatically

- Click to start, not mandatory

- Click to start, mandatory

- Click to start, user chooses ad

- Small - Medium -  Large

- Not capable of interactivity

- Capable of interactivity (e.g. “Like” on Facebook)

- < or = 15 seconds - 16-30 seconds - 30+ seconds

Movement on page

- Static - Expandable -  Floating

Ad location in content

-  Post-roll -  Pre-roll - Mid-roll

42:31 0:00

PRELIMINARY – TO BE TESTED AND PILOTED


3MS confirmed support for MRC to serve as the standards-setting structure for the industry

• MRC mission and vision encompass standards setting and auditing activities for the media industry

- Set standards and address measurement priorities

- Meet new and diverse accreditation demands

- Manage change and complexity, and foster quality

- Promote international standards

- Educate members on best practices

• MRC members play a key role in shaping standards guiding the media industry

• MRC has recently established a standards-setting committee to guide efforts

Why the MRC?


2011 2012 2013

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Targeted industry engagement and broad-based press/marketing

Accreditation

Solution development

Solution development

Current 3MS implementation roadmap

Change management

MRC standards-setting

Classification system

Viewable impression Pilot

Attitudinal measures

Audience-based GRP currency

Board approval

First meeting of standards committee

Initial staff expansion completed

Social activity metric

View-throughs

Soft rollout

Parallel reporting

Banner Rising stars

Definition confirmed

Cross-platform guidelines

Taxonomy finalized

Accreditation

Accreditation

Digital guidelines


•  View-Throughs •  Social Media Metrics

•  Attitudinal Studies/Brand Effect

Preliminary Roadmaps for Principles/Solutions 4 and 5


3MS prioritized view-through as the first standard brand ad performance metric

Number of days after ad view that visit to brand site

is counted

• Data indicates that majority of view-throughs occur within 7 days

• 3 days is analogous to TV’s C3 rating system

Number of ad views attributed

for a view-through

• All ads contribute to brand building and a user’s decision to eventually go to brand or other target site

Percent of view-through attributed to

different ad views

• Attribution standards to be further tested

Last ad viewed All ads

2

3

Parameter to be defined

Range of options and suggested solutions

All ads receive full attribution

Each ad receives weighted

fractional attribution

1

1 day 90 days

Rationale

1)   Standardize key parameters of this metric (see below) 2) Make this metric more transparent and credible by introducing

accreditation for the reporting of this metric

Goals of 3MS for Brand ad performance metrics

3 days and 7 days

1st

2nd

3rd

Each ad receives equal

fractional attribution

PRELIMINARY – TO BE TESTED AND PILOTED


Priority social metrics for standards-setting

Standardized social metrics will be critical and remain under development

Preliminary metric solutions Goals of social metric standards

• Establish standards that provide a view of total relevant/ valuable social activity to assess campaign effectiveness

• Encourage accreditation of vendors providing standard social activity metrics

• Promote innovation, competition, and improvement by encouraging vendors to develop and offer metrics above and beyond that defined in standard metrics

•  Volume of high-value social activity/posts (e.g., reviews, sharings, recommendations, etc)

•  Volume of exposures to high-value social activity

•  Analysis of positive/negative social media sentiment

3MS led process to prioritize social metrics based on: 1)   Value and usefulness of

metric to advertisers

2)   Availability of credible data


•  Improve response rates

•  Shift to more accurate and relevant control groups

•  Reduce use of statistical weighting adjustments

•  Enhance ability to compare metrics with other media

•  Pursue accreditation of vendors and sources of data via independent industry body

Accreditation and improved methodologies will boost confidence in attitudinal studies

Accredited attitudinal metrics vendors will need to address key requirements

Options for improvements should follow in accordance with IAB Best Practices

Improve existing

methodology

Adopt new survey formats

Incorporate demographic

and cookie data

Switch to panel based surveys

a

c

b

d

•  Improved user-intercept analysis conducted by 3rd party vendors

•  Variations of current user-intercept analysis

•  Surveys delivered to people who have seen an ad (identified via cookies)

•  Surveys delivered to panel members, with direct tracking of users

Documents

Sherrill Mane Presentation