Digital advertising growth: Why a common measurement system is needed now more than ever

There has been a long-standing demand in the advertising industry to have a common measurement system for digital and over the top (OTT) platforms to encourage transparency and accountability. Currently, most of the digital media buying happens on the basis of data provided by the platforms. That data is available only with the platforms and clients who buy ad spots on those platforms. There is no third-party validation of that data and different platforms have different metrics for gauging the return on investment (ROI).

According to the recently released dentsu-e4m 'Digital Advertising in India 2021' report, the digital advertising industry has grown by 15.3% to reach Rs. 15,782 crore by the end of 2020, which was at Rs. 13,683 crore by the end of 2019. The report projects that digital media is likely to grow at 20% to reach a market size of Rs. 18,938 crore by 2021. It is expected to grow at a CAGR of 22.47% to reach Rs. 23,673 crore by 2022.

As digital advertising has already surpassed print media and is on course to reach the same level as TV in the coming years, the chorus for accountability and transparency is growing louder.

GroupM India President, Investments and Pricing, Sidharth Parashar said that a common measurement system is required since digital media is highly fragmented and duplicated reach is a big pain point for advertisers.

“Given the nature of this medium, consumers are on multiple platforms at any given time. In order to maximise audience coverage for their brands, marketers opt for multiple digital platforms to advertise and that leads to the high probability of duplicated reach and inefficiencies. Hence the need for a common system cutting across digital platforms measured by a neutral third-party is very important which can help make advertising/marketing budget work so much harder and efficient,” he asserted.

Queried as to why the industry has failed to come up with a common measurement system, Parashar pointed out that unlike other mediums, digital encompasses various differentiated platforms like search, social, video, OTT, and e-commerce, and each platform is structured differently thereby lending itself to different user experiences.

For example, the way one searches for a product online is very different from the way one connects with friends on social platforms or shops through various marketplaces or watches content on OTTs.

“As each of these platforms are employed to achieve different marketing outcomes, it results in different ways of advertising and different ways of measuring each outcome on these respective platforms. This makes digital media fragmented and very complex from a common measurement standpoint,” Parashar said.

Fragmentation is not the only challenge for common measurement. The emergence of new technologies can very easily render a common measurement system meaningless.

Noting that there is a lack of consensus within the industry on a common measurement system, Isobar India COO Gopa Kumar said it is high time everyone came together and work towards arriving at a common metric for digital & OTT. Kumar added that it's important to have common measurement metrics as different players are using different metrics for their platforms.

“This is resulting in a situation where there are multiple data points floating around. Since there is no single standard industry system either to verify or validate there is a trust deficit that arises. It also leads to confusion on which data set or platform is to be trusted with. There is no consensus on what constitutes a view, and different players count three, six, or 10 seconds as one view. Currently, everybody comes up with their own numbers. As the industry is becoming bigger and it's already the second-biggest medium in the country, it's very important that one gets to a common measurement currency,” he stated.

InMobi VP and GM, Growth Marketing Platforms, Navin Madhavan said that a common measurement system or metrics enables advertisers to optimise their spends and maximise ROI.

“In the digital world, marketers can leverage a number of channels (search, social, display, video, etc.) to achieve their branding or performance objectives. However, with specific budgets for each campaign, brands need to optimise their spends and invest in the channels that meet their engagement and acquisition goals. With the ability to capture common metrics, brands can allocate the right spends on the right platforms/ partners,” he added.

Madhavan further stated that using a common metric such as Audio and Visible on Complete (AVOC) score, a brand can allocate budgets to the app categories that are driving more valuable video completes/views. The same AVOC score can also be used to determine the efficacy of desktop vs tablet vs smartphones and optimise spends accordingly.

While stating that transparency is the biggest ask across the ad tech supply chain, Madhavan said that the programmatic ecosystem is enabling complete transparency and efficiency for marketers outside the walled gardens of tech giants like Google, Facebook, and Twitter.

“Programmatic is the preferred buying method in the west (accounting for over 90% of all digital display ad spends and close to 50% of all video ad spends in advanced markets like the USA) and is an eventuality for markets like India,” he stated.

Times Internet Vice President, Revenue Strategy & Analytics, Vivek Pandey feels that the advertisers should take the lead in pushing for a standardised measurement system.

"Digital is a highly competitive industry, with each player trying to corner a bigger portion of online ad revenues. This creates a strong incentive for smaller platforms to present skewed first-party data to present themselves in the best possible light. Hence, while there may be some amount of parity in measurement systems within these industries, there is no standardised metric. It’s high time advertisers demanded Media Rating Council (MRC) accredited metrics to gauge the outcome of their online advertising efforts. Demand from advertisers is more likely to push prominent digital players to work with the Media Rating Council (MRC) to formulate a simple & standardised measurement framework to bring more transparency within our industry,” Pandey said.

Kurate Digital Consulting senior partner Uday Sodhi has a different viewpoint on the measurement issue. According to him, digital has the best measurement across mediums as it is 100% census data. He also said that a common measurement is available in the form of cost per thousand (CPM).

“I think there is a very strong common measurement available today which is called CPM. Currently, OTT provides information to all clients on a real-time basis which is 100% census data. It can't be better than that. Nothing in the world is better than giving clients real-time data which is down to the profile of the user who is consuming the content. Every single detail is available to the advertiser and the agency,” he argued.

According to Sodhi, census-based data is any day better than sample-based data which will always have all kinds of errors. “Further, both sides - buyer and the seller - have the same information. It's a Rs 20,000-crore industry. Everybody is paying and collecting money based on this information. The challenge is that others can't see it. Today, people are willing to spend Rs 25,000 crore on the print where there is no measurement whereas digital is the most measurable medium,” he pointed out.

He also said that the onus is on advertisers to make sure that they have the right technology to analyse how their ads are performing. “There is enough technology available in the market which will help them target correctly across all the publishers.”

MX Player SVP and Head-Revenue Viraj Jit Singh said that a third-party common measurement system is a must as it leads to accountability. “The measurement of the top end of the funnel and bottom end of the funnel can happen on digital. One can measure cost per install, cost per engagement of user base, cost per reach which other platforms may or may not be able to give with attributions. There is a need for a lot of transparency and accountability. Having a transparent, third-party, neutral measurement body is always welcome.”