MediaPost’s Wayne Friedman isolates hairy problems associated with TV’s recent initiative to discuss a new method of selling TV media that the Internet has engaged in for years: CPA (cost per action) nicknamed Thor.
Namely, if a consumer saw a TV advertisement (linear, or streaming), and that consumer made a purchase within x number of days…the TV network would get paid a bounty.
Essentially, TV attribution (birthed in 2012).
But the hammer of Thor isn’t so easy to lift.
Friedman begins to unravel the obvious with questions like:
Industries and brands have seasonality which will impact conversion rates from TV ads to outcomes.
Think weight loss. Conversion rates are higher from January until the early part of swimsuit season.
Think automotive. TV ads convert at a higher rate with great lease or financing deals at the end of the year…but without a great lease of financing deal, should the TV media seller put its own TV inventory at risk when the fish aren’t running?
Convert vs Prompt
Brick and Mortar establishments even for the same brand, have vastly different conversion rates.
“I deployed one of the earliest brick and mortar conversion rate IT systems at Pep Boys automotive in 50 stores,” said CEO of C3 Metrics advertising attribution data cloud Mark Hughes. “The ability for one store to convert versus another store showed wild differences. Store layout, lighting, inventory on hand, time of day, and quality of staff all affected the ability to turn a person walking in…into a customer making a purchase.”
Even ecommerce conversion rates wildly vary.
“Over a three-year period, a former client converted fewer paying customers on their site.” said Vanessa Branco of Armonix Digital. “The NYSE traded company wasn’t located in the heart of Silicon Valley and didn’t have the technical chops to understand the pure statistic related to shopping cart abandon rate which showed that plaque was accumulating to their proverbial ecommerce arteries. Consequently, the media was expected to bear the brunt of the company’s conversion woes.”
Lake Wobegon, where all brands convert their prospects above average? Thor lore.
Creative – Thor’s Biggest Thorn
Thor’s biggest Thorn, however, is TV creative itself produced by the advertiser.
According to Chief Research Officer at CBS Television David Poltrack, TV creative + messaging = 70% of the impact of TV advertising.
Translation: put an awful TV spot in 30 seconds of TV media, and you’ll get an awful result.
But put a great TV spot in 30 seconds of media, and results will be amazing.
So if TV media companies plan to sell media based on a CPA formula…those very TV companies may end up giving away TV for free if the creative does not deliver.
Is there a solution?
Imagine if an auto dealer in Delaware knew his creative = 36 index to all auto dealer ads nationwide.
That Delaware dealer now knows it’s not the TV media that has let them down…it’s the creative. Creative is the key to making TV media work or wilt.
Furthermore, that same dealer might be able to take a look at the dealer in Nevada with a 136 Index and discover what they’re doing right versus giving up on TV and moving more ad dollars to digital.
Only TV creatives “deemed worthy” passing a requirement (or creative index threshold) should be able to lift the hammer of Thor.
If a threshold metric is not met, then the TV advertiser should pay the normal CPM rate.
Thus, a threshold metric places mutual risk on the advertiser and the TV media seller.
Thor can only succeed with a “deemed worthy” creative, plus a prompt versus conversion methodology.
Before blazing to imitate digital and deliver the lagging metrics TV desperately needs to prove itself in the upper funnel…TV needs to be Thor-ough.