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Published: November 2, 2009 at 01:05 PM GMT
Last Updated: November 3, 2009 at 01:05 PM GMT
Is there an industry need for innovative media measurement? More to the point, is there a need for leading television networks, media agencies and marketers to organize a coalition to advance innovation in media measurement? The Coalition for Innovative Media Measurement (CIMM) has posted two requests for proposals on its website (www.cimm-us.org/rfp.htm) and is anticipating significant interest from media research suppliers including both Nielsen and WPP's TNS. The history of media and advertising industry consortia and coalitions, as I am too painfully aware, is one of failure and rejection. Can CIMM, formed with nearly $2 million in seed funding from 14 founding member companies, beat the odds and generate meaningful and long-term advances? In this week's detailed full report I review CIMM's objectives, share my perspective on the Coalition's prospects, and argue for increased industry support.
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The explicit goals of CIMM are to identify and review research companies that are working with set top box data and companies that are aggregating and reporting on cross-platform video usage across television, the Internet and mobile. "CIMM intends to initiate, fund and evaluate a number of pilots with relevant parties and publish research findings." The implicit objectives are to form a consensus on which companies offer the best potential for advances in these two overlapping categories, provide seed capital for expansion, and through the Coalition's validation provide a foundation for these companies to seek further investor support.
Contrary to reports that NBC Universal's Alan Wurtzel has stepped down as an active participant on the group's executive committee, Wurtzel remains active in a leadership role. Suggestions that Wurtzel's role was reduced because of reported discussions between GE and Comcast are misguided. Wurtzel volunteered to cede chairmanship of the effort to MTV Networks' Colleen Fahey Rush to assure the industry that the Coalition is indeed a multi-company – and not an NBC dominated - initiative. The Coalition is conducting a search for an executive director with 15+ years of industry experience, who is well versed in data manipulation and analysis, who has the ability to manage multiple constituencies, who will reinforce through his/her presence the goal of facilitating innovation, and who can be a relevant spokesperson for the industry. (www.cimm-us.org/jobs.htm)
Giving further credence to the Coalition is the powerhouse of executive names included as the organization's founding fathers (and mothers): Time Warner's Jeffry Bewkes, News Corp's Chase Carey, Viacom's Philippe Dauman, CBS' Nancy Tellem, Disney-ABC's Anne Sweeney and ESPN's George Bodenheimer, WPP's Sir Martin Sorrell, P&G's Dina Howell, Unilever's Laura Klauberg and Mediabrands' Nick Brien, plus other industry luminaries.
There is no dearth of innovative media research initiatives. From TiVo to TRA's integration of set top viewing data with shopper card purchase behavior to Marketshare Partners' strategic marketing analytics dashboard, the industry is flooded with interesting research tools and resources. Two major suppliers, Nielsen and TNS, dominate the media research marketplace. Media sellers and buyers, faced with corporate demands to consolidate wherever possible and cut budgets across the board, are locked into ever-increasing year-to-year research investments just to maintain the status quo. Research executives need to validate any further investments in research by proving to their management the investments will have a direct and measureable return on investment. This leads to myriad custom applications and a marketplace that discourages entrepreneurial investment.
The last major research company to bubble up from the cauldron was IAG, founded by Ken Orkin and Alan Gould, which required a reported $90 million in investment capital and was ultimately sold to Nielsen for $225 million. While the exit was a happy one for investors, the comparatively low 2.5x multiple it has made it difficult for new idea-based research companies to raise the capital they require to become legitimate competitors to Nielsen. Plus, the industry believes that any company that becomes a legitimate threat to Nielsen will simply be acquired by that company. The equity investors in Nielsen, however, are reported to be seeking exit strategies more than they are additional acquisitions.
Industry insiders estimate that at least $200 million will be required to create a data-centric research company that can viably compete with Nielsen. As much as $1 billion could be required to build a company from scratch with the massive resources and capabilities to provide truly state-of-the-art insights on the rapidly expanding array of audience video viewing habits, especially as the forms and formats of commercial exposure respond to technology-based advances. TNS, with support from parent WPP, is actively expanding its tools and capabilities to compete with Nielsen. But even these two companies cannot generate sufficient incremental financial support to keep up with the industry's desire for innovation and advanced resources.
The fundamental industry need is for Comcast and Time Warner to become more supportive by offering increased availability of set top box data. A business model for Canoe Ventures, the consortium of six cable operators that further proves how difficult it is for corporations to join together in common cause, might be to become an aggregator and facilitator of set top box information from its multiple underwriters. Today, only Charter and Dish Network among video distributors have been forthcoming in making set top data widely available. Cable operators have the unique potential to provide both cable and broadband viewing data, and phone companies that offer mobile and video services will be important future partners.
The most logical solution for the industry would be to create a Joint Industry Consortium (JIC), similar to the model implemented in Europe, to acquire and operate Nielsen as an industry-run research service. Rather than approaching research with a for-profit motivation, the JIC would invest industry contributions in the capabilities that best serve marketers' needs and content suppliers' interests. Eventually, the current Coalition could evolve into a JIC.
Now, your reaction to this idea might appropriately be to question how an industry JIC could ever agree on the capabilities that best serve both marketers' and media sellers' needs and interests. Of course, it's the same question that needs to be asked as the Coalition moves forward. Can competitive media sellers, agencies and marketers ultimately agree on common methodologies that serve their mutual needs and justify further investment? And, once innovative research companies are identified and agreed upon, can the Coalition generate sufficient funds to enable these companies' tools to grow into valid currencies?
Of course, the founders of the Coalition understand these questions and issues. They also recognize that a failure to act – and act now -- would simply accelerate the demise of traditional media and maintain the current entropy that holds back innovation and exploitation of the extraordinary wealth of data now available and untapped. Everything the community can do to join, support and advance this initiative should be done.
Jack Myers consults with media, agencies and marketers on transformative business models and revenue growth strategies. He can be contacted at firstname.lastname@example.org.
Jack Myers Media Business Report is published by M.E.D.I.Advisory Group, LLC.
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