I often hear the laments of digital signage network veterans when they discuss ad rates, agencies and measurement. It seems that digital signage networks are held to a higher level of accountability than traditional media, especially television. The dirty little secret is that television numbers are and always have been directionally useful but certainly lacking in true accuracy. Have you ever heard of advertisers challenging Nielsen or Arbitron ratings because they could not verify how many people were in the room, and whether they were paying attention to the screen? Is it not true that simply having the television on and tuned to a channel is sufficient to drive ratings, and therefore rates? Is that insufficient for digital signage networks because it is “new” or because the presence of technology drives expectations? There are indications that the worm may be turning just a bit, driven in part by evolving television technology. The question is whether the new reality will have a positive or negative influence on digital signage.

In a recent presentation, Facebook investor Roger McNamee had lots of things to say about the world of media and technology. It is well worth reviewing. The one nugget among many that caught my eye was this:

“Television is the last protected media business,” but it’s going to get disrupted. For one, once televisions are computers, analytics of who watches will get more accurate than Nielsen panels. “Everyone knows that if we go to actual measurement, ad rates will collapse because the numbers aren’t as good as Nielsen makes them look.”

Pretty insightful stuff, and concepts that will have television executives shaking in their Armani suits. Nielsen ratings were good for everyone: networks, advertisers and Nielsen, because there simply was not a reliable way, or any real imperative to get a a greater degree of accuracy. And to be  sure, the networks have little interest in being more accurate. The age of TiVo has been disruptive enough for them. The age of granular viewer analytics will be even more so, as McNamee predicts. But will more precise metrics result in a collapse of TV ad rates? If American Idol is still the most-watched show on television, will Coca Cola, AT&T and Ford want to pay less to be associated with it once they know about the impact of bathroom and kitchen breaks? I don’t think so, and the fact that I didn’t have to think very hard to name the three top Idol advertisers should be evidence enough of that. Advertising still works, and pricing at the top end is still a supply and demand business. It is at the fringes of ratings and viewership curves where TV ad rates are likely to drop, closing the gap between a huge chunk of television advertising and digital signage advertising.

How does this impact the world of digital signage networks? If television numbers are less than they have appeared to be for decades, and the net impact on television rates is primarily on second and third tier programming, digital signage may start to look even better on a more even playing field. I don’t think that anyone in digital signage had delusions about CPM rates that would approach those of network television. Nevertheless, if the reach of larger DOOH networks can be established, and the venues of the screens are arguably more conducive to driving a purchase decision than a television in a bedroom, is it not a better value? I think so. Of course this presumes that networks will have research numbers to back up traffic data, whether it comes via old fashioned legwork or emerging technology. Clearly, that is the direction of the serious players in our space. If we lead the charge for precise measurement, there is a chance to make the case for digital signage as a leader in transparent metrics. Television will be left to catch up, and answer questions about the veracity of their numbers. That can only bode well for DOOH networks.

Will better precision on television viewership impact rates for TV?

Will it impact digital signage uptake or rates?

Should Ken have admitted to watching American Idol?