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SQAD TV is a benchmark to evaluate the relative cost efficiency of client media buys versus the marketplace. Several clients have recently questioned how SQAD is addressing two key events affecting the media landscape:
Understanding the Nature of SQAD TV Benchmarks
SQAD receives actual buy data – unit costs, ratings and cost/GRPs by buyline – via exports from the buying platforms used by subscribing agencies. Data provided reflects the deals buyers and sellers actually made, expected costs and delivery. They do not represent that they provide a posting service or independent projections and have been very clear in past discussions that these would be very different services.
SQAD publishes high, average and low cost factors to support buyers and other users (including auditors) in addressing a variety of conditions that may influence media costs, i.e., lead time, restrictive buying requirements. Their methodology incorporates quality controls to eliminate errors, inconsistencies, missing data, etc. as well as assure reasonableness in the trends from report to report.SQAD is committed to transparency, as evidenced by publication of its SQARE methodology as well as participation in the Media Rating Council (MRC) accreditation process.
Nielsen Currencies
Over the past 5 years, Nielsen has introduced several new ratings metrics in the marketplace. The industry has demanded more granularity in the data to address the use of DVRs and has yet to coalesce around a singular metric for Spot TV buying (as is also the case in National TV where Commercial Ratings + 3 days (C3) emerged with very strong support but sports buys largely focus on Live ratings). In Spot TV markets measured with a Local People Meter (LPM), advertisers have the choice of basing buys on one of four currencies (Live only, or Live plus same day, 3 days, or 7 days) and in Metered markets one of three (no Live only). Live+3 ratings have not gained significant support locally, and with many retail-oriented clients it is preferred to negotiate fewer days of delayed viewing, or Live ratings.
SQAD’s database has evolved appropriately to reflect this:
Ratings CurrencyPercent of Spend by Currency In SQAD Database September, 2010
Live76Live+Same Day20Live+3/Live+74Thus, 96% of the data reflected in SQAD estimates reflect Live and Live+Same Day audiences. SQAD has been highly transparent about this, enabling buyers to better understand the nature of the data. However, users are not able to segment the benchmarks by ratings currency.
Also note that Nielsen has provided impact data in advance of the release of new ratings currencies, an important aid to help buyers get out in front of the issue.
Advertiser’s Best Interests
Every advertiser must consider its goals in comparing costs to SQAD marketplace norms. Perspective regarding the buying process is essential:
MMi’s Circle Audit® provides cost benchmarking addresses these important dynamics in the buying process, providing analysis of both estimated and posted costs.In terms of ratings currencies, the appropriate basis for negotiation should be determined with knowledge of client goals:
Some agencies have suggested that buyers negotiate the same unit rate regardless of target and currency such that significant variations in Live to Live+7 ratings will translate directly to cost per points. This would seldom be the case; buyers would make very different buys given the variability in performance by station/daypart/program under different ratings currencies (reflective of differential DVR playback).
To be fair, there is a legitimate concern in that SQAD TV benchmarking does not break out reporting by ratings currency metric as it does with its national NetCosts service. It is helpful that the current service is heavily weighted with Live and Live+Same Day data but there is certainly room for improvement on this front.All of this considered, we believe it’s critical to note what we’ve learned from extensive experience with the data and advertiser buys:
Reaction Time
Over time, SQAD has been demonstrated to evolve with the marketplace as shown in the following snapshot. Importantly, this isn’t a momentary resource in which you can see the media cost today. Even in the sharpest downturn, many advertisers will keep existing schedules in place, some may renegotiate as they did at the height of the 2009 financial crisis and so on. But the evidence does show SQAD will ultimately reflect where the overall market settles AND, in the audit process, it is the ultimate result showing the final costs for all buys that is used for benchmarking.
Further, to combat limitations with data acquisition on the 1st of the month each quarter, SQAD has announced “SQAD Final Quarterly Vue (FQV),” an enhancement to capture buys placed late in the quarter and/or entered into contributing buying platforms after the quarter. To illustrate the improvement:
Whatever buys contributor has in systems will be reflected in SQAD results regardless of when they were put into the agency buying platform.
New Markets
From time to time, advertisers and agencies enter new markets where they have not previously purchased Television. SQAD is a valuable resource for estimating and evaluating negotiated costs vs. the marketplace. There is simply no substitute.
Accountability Creep
We are very mindful of the growing trend of “Accountability Creep,” a topic of concern to all advertisers. Agencies have increasing lobbied for elimination or softening of requirements to which they are held accountable. Again, while we are all aware that industry research begs for improvement (perhaps most notably availability of commercial ratings in local markets), it is not in the advertisers’ interests to shy away from implementing and tracking performance against objective industry benchmarks.SQAD is the only resource for local TV cost benchmarking relative to the marketplace; there is no viable alternative. Let’s not let the perfect become the enemy of the good. And let’s continue to press for improvement in ALL of the resources that drive the advertising media industry.
Please let us know if you have any questions/comments.
If you enjoyed this post, you might also like "3 Cautions for Advertisers During Onslaught of Media Agency Reviews".
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Thomas BridgeFounder/CEO
thomas.e.bridge@mediaaudit.com
636.812.0140