Confidential & Proprietary• Drunk Nate Silver riding the subway,telling strangers the day they will die• Drunk Nate Silver predicting the shape ofevery snowflake• Drunk Nate Silver looking at strangersfrom across his doctors waiting room,then worriedly scribbling in his notebook• Drunk Nate Silvers McDonalds ordercomes out to exactly $5.00, after tax. Thecashier looks at him in awe• Drunk Nate Silver placing a wreath next toSchrodingers cat box
Confidential & ProprietaryTV is dead14The Telegraph, 2007, "TV Is Dying Says Google Expert"One of the founding fathers of the internet has predicted the end of traditional television....Vint Cerf,who helped to build the internet... said...that viewers would soon be downloading most of theirfavourite programmes onto their computers.
Confidential & Proprietary4,00040,0001952 1962 1972 1982 1992 2002 2012Radio Direct Mail Yellow PagesMagazines Newspapers TOTAL TVNewspaperTVDirect MailRadioMagazinesYellowPages1950 – 2000
Confidential & Proprietary4,00040,0001952 1962 1972 1982 1992 2002 2012Radio Direct Mail Yellow PagesMagazines Newspapers TOTAL TVNewspapersMagazinesYellow pages1950 – 2000WHAT HAPPENED?
Confidential & Proprietary 180%5%10%15%20%25%30%1990 1995 2000 2005 2010 2015internetusers % of world populationinternetusers % of world population0%1%10%100%1990 1995 2000 2005 2010 2015internetusers % of world populationinternetusers % of world population
Confidential & Proprietary 1901020304050607080901001940 1950 1960 1970 1980 1990 2000 2010 2020VCRs% of TVHHsVCRs % of TVHHs01020304050607080901001940 1950 1960 1970 1980 1990 2000 2010 2020Multiset% of TVHHsMultiset % of TVHHs0102030405060708090100Oct-2006 Feb-2008 Jul-2009 Nov-2010 Apr-2012HD DisplayCapableHD Display CapableSource: The Nielsen Company-NTI, Jan. each yearSource: The Nielsen Company, Media-Related Universe Estimates.
Confidential & Proprietary 20051015202530354045Oct-2006 Feb-2008 Jul-2009 Nov-2010 Apr-2012DVR % of TVHHsDVR % of TVHHsSource: The Nielsen Company, Media-Related Universe Estimates
Confidential & ProprietaryTV viewing hours2101234567891940 1950 1960 1970 1980 1990 2000 2010 2020Hoursper day per TVHHHoursper day per TVHHSource: The Nielsen Company, NTI Annual Averages, 1994-present estimates based on start of broadcast season September to September.Beginning in 2007, estimates include Live+7 HUT viewing. Prior to 9/87: Audimeter Sample; 9/87 to present: People Meter Sample.
Confidential & ProprietaryTV viewing hours22Source: The Nielsen Company, NTI Annual Averages, 1994-present estimates based on start of broadcast season September to September.Beginning in 2007, estimates include Live+7 HUT viewing plus DVR playback.0.001.002.003.004.005.006.001985 1990 1995 2000 2005 2010 2015Men Women Teens Children
Confidential & ProprietaryIn the past year23IPTV appearing for the first timeMcDonough, P. (2012), The Evolution of The Video Consumer, Audience Measurement 7 presentation, Nielsen Corporation2.9%switched“on”
Confidential & ProprietaryVideo – Mobile Device0.000.501.001.502.002.503.00K2-11 T12-17 A18-24 A25-34 A35-44 A45-54 A55-64 A65+Video on MobileVideo on Mobile12-17 year oldsPr(VideoOnMobile|AgeGroup=X) /Pr(VideoOnMobile)Source: Nielsen Three Screen Report 2009http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/09/ThreeScreenReport_US_2Q09REV.pdf
Confidential & ProprietaryVideo - Internet0.000.501.001.502.002.50K2-11 T12-17 A18-24 A25-34 A35-44 A45-54 A55-64 A65+Video on internetVideo on internet18-24 year oldsPr(VideoOnInternet|AgeGroup=X) /Pr(VideoOnInternet)Source: Nielsen Three Screen Report 2009http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/09/ThreeScreenReport_US_2Q09REV.pdf
Confidential & ProprietaryVideo - Traditional TV0.000.200.400.600.801.001.201.401.60K2-11 T12-17 A18-24 A25-34 A35-44 A45-54 A55-64 A65+TraditionalTVTraditional TV65+ year oldsPr(VideoTraditionalTV|AgeGroup=X) /Pr(VideoTraditionalTV)Source: Nielsen Three Screen Report 2009http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/09/ThreeScreenReport_US_2Q09REV.pdf
Confidential & ProprietaryTraditional TV still dominates every age group0.020.040.060.080.0100.0120.0140.0160.0180.0K2-11 T12-17 A18-24 A25-34 A35-44 A45-54 A55-64 A65+LiftvsVideoonInternetOn Traditional TV*Watching Timeshifted TV*Using the Internet**Watching Video on Internet**Mobile SubscribersWatching Video on a Mobile Phone20x – 160x video watching on traditional TVversus Internet!Source: Nielsen Three Screen Report 2009http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/09/ThreeScreenReport_US_2Q09REV.pdf100x
Confidential & ProprietaryOriginal programming290500100015002000250030002005 2006 2007 2008 2009 2010 2011 2012original programson cableoriginal programs on cableSource: NPower. All original programming. Analyzed on programs, not telecasts. Nov 11 v. Nov. 06 1500 original TV Programs now on the air in2010. This has increased from 750 in 2005.NCC Presentation 10/20/2011 3:25PM ETOur Perspective on Local Cable Measurement. Nick Garramone – SVP, eBusiness Operations & Research, NCC Media
Confidential & ProprietaryMulti-screen & Multi-channel TV programming30WHERE YOU WANT IT WHEN YOU WANT IT
Confidential & ProprietaryThe TV landscape31FAR FROM BEING COWED BY NEW MEDIA, TV IS COLONIZING IT
Confidential & ProprietaryAlthough the popularity of some programsremains a scientific mystery....
Confidential & ProprietaryOnly two problems withTV - we can’t target andwe can’t track!Dancing with the Stars Nielsen
Confidential & Proprietary| Database marketing with TV media34TV Ad Targeting using SetTop Boxes & Advertiser dataHow it works
Confidential & ProprietarySet Top Boxes7075808590951996 2001 2006 2011% HHs w Set Top BoxSet Top Boxes - 91.5% of US HHs
Confidential & ProprietarySTBs with return path - 30% of US HHsSource: platform status report IAB, Platform Status Report: Interactive Television Advertising, AN INTERACTIVE TELEVISIONADVERTISING OVERVIEW, http://www.iab.net/media/file/ITV_Platform_Status_Report.pdf Source: SNL Kagan VOD & ITV Investor Report1/20096%16%23%30%0%5%10%15%20%25%30%35%2009 2010 2011 2012% HHs w True2Way% w True2way
Confidential & Proprietary• Viewers• 1000 times more viewers thantraditional panel• Demographics• 200 times more variables• STB volumes:• 1 billion events per dayRevolution now taking placeMichael Lewis (2003), Moneyball: The Art of Winning an Unfair Game
Confidential & ProprietaryExample viewing recordNet Person DateTime M Program Day PFNEW 10274739 12/5/11 6:30 AM 2 FOX and Friends Mon 1FNEW 10274739 12/5/11 7:00 AM 30 FOX and Friends Mon 1OXYG 10274739 12/5/11 7:30 PM 28 The Bad Girls Club Mon 2OXYG 10274739 12/5/11 8:00 PM 24 The Bad Girls Club Mon 2OXYG 10274739 12/5/11 8:30 PM 30 The Bad Girls Club Mon 2OXYG 10274739 12/5/11 9:30 PM 2 Bad Girls Club: Season 8 Preview Mon 2FNEW 10274739 12/6/11 7:00 AM 29 FOX and Friends Tues 1LIFE 10274739 12/6/11 8:30 PM 27 Americas Supernanny Tues 2LIFE 10274739 12/6/11 9:00 PM 30 Americas Supernanny Tues 2LIFE 10274739 12/6/11 11:30 PM 30 One Born Every Minute Tues 2LIFE 10274739 12/7/11 12:00 AM 1 One Born Every Minute Wed 2FNEW 10274739 12/7/11 7:00 AM 28 FOX and Friends Wed 1FNEW 10274739 12/7/11 9:30 PM 25 Hannity Wed 1FNEW 10274739 12/8/11 7:00 AM 21 FOX and Friends Thurs 1FNEW 10274739 12/9/11 7:00 AM 29 FOX and Friends Fri 1AFAM 10274739 12/9/11 7:30 PM 3 Santa Claus Is Comin to Town Fri 3DSNY 10274739 12/9/11 7:30 PM 20 Beethovens Christmas Adventure Fri 3DSNY 10274739 12/9/11 8:00 PM 22 Beethovens Christmas Adventure Fri 3AFAM 10274739 12/9/11 8:00 PM 4 The Santa Clause Fri 3Multiple viewers for the same set top box. The demographics of this viewer are “Female”, Second gender =“Male”, “Married”, “2 children”, “Education=GradSchool”. We have hand-labeled column “P” to show what could be the viewing from three different individuals – Person 1 who likes to watch Fox news in themorning, Person 2 who watches young female programming, and Person 3 who watches kids programming.
Confidential & ProprietarySTB Targeting ExampleAdvertiser provides 24,151 customer recordsEnrichment rate of age = 75%
Confidential & ProprietaryCustomer Media MatchCorrelationcoefficient = 0.87
Confidential & ProprietaryRK7321 Handyman Tool – Most unusual DemographicsDemographic IndexOff-Road Recreational Vehicles 3.4DIY Living 1.8Personicx Classic =Country Ways 1.7Occupation - Professional =Farmer/Dairyman 1.3Woodworking 1.3Hunting 1.2Personicx Classic =The Great Outdoors 1.2Military Memorabilia, Weaponry 1.1Personicx Classic =Full Steaming 1.1Personicx Classic =Acred Couples 1.1Occupation =Farmer 1.0Science, Space 1.0Personicx Classic =Rural Retirement 1.0High End Appliances 1.0Motorcycling 1.0Auto Parts and Accessories 0.9DOB - Year =Born in the 1940s 0.9Crafts, Hobbies Interest 0.9
Confidential & ProprietaryBreaking Sales Records at Rockwell Tools
Confidential & ProprietaryRockwell Tools JawhorseInnovative Clamping device, Welding Station, Portable workbench, Holds in place of two menIt does everything the manufacturer says it does and more.I would strongly suggest anyonewho does any kind or repair orbuilding to get one!- William H. Morris (Louisiana)- C. Borst (Ft. Worth, Tx.)Very simple: the Jawhorse performs as advertised.- H. Paul Gaudet "tool guy" (pensacola fl)Forget saw horses. this is the way to go!This is the greatest tool2nd only to the wheel. - Good Old Boy USA (USA)everI know I will have this for many years.Very well built and very strong clamp.- Unkabuzz "Retired ??" (Lake Tahoe)This is a well made, solid workplace tool,worthy of all its positive reviews – C.Winton (Jacksonville)
Confidential & ProprietaryRockwell Tools JawhorseInnovative Clamping device, Welding Station, Portable workbench, Holds in place of two men“I showed another buddy (woodworking hobby) the jawhorse and he liked it a lot. The only problem we see is you need 2 orbetter yet 4. It would be great to have had when I restored the jeep and could be a good item to rent a set to someonedoing a jeep. Perfect for the frame, axles, body etc. It is strong enough and easy for old guys to secure stuff and move itemsas you work on them. As I say and mark my words, one is great and 2 is fantastic and 4 would be out of this world. I seepeople wrestle and balance stuff on milk crates, garbage cans and so on. On long items using a good sawhorse works well asyou only need the one strong grip, its a good product.”
Confidential & Proprietary• In April 2010 sales were declining, and a lower quality competitor entered the market.• Unclear how to run television advertisements to maximize retail impact.• Huge stockpile of excess inventory.Catastrophic Business Failure....A serious business situation after only 3 months on the market…
Confidential & ProprietaryAd Elastic change during holiday period: Curve ConstructionEffectiveness of localconcentration increasesfrom 1x to 7x during theholiday period. Samemedia, more outcomenear event600concentrationprovidesanother levelon the advelasticitycurve…300concentrationis first point onthe elasticitycurveElasticities change– become larger –by day during theHoliday period….(shown fromrunning actualinstrumentation)Diminished returnsfrom doubling themedia concentration…getting less than doublethe effect…. That’s whythe curve diminishesAdvertising becomes moreeffective during later dates..Sales lift at300 on11/15/2010Sales lift at300 on12/5/2010Sales lift at300 on12/23/2010-5051015202511/1/201011/3/201011/5/201011/7/201011/9/201011/11/201011/13/201011/15/201011/17/201011/19/201011/21/201011/23/201011/25/201011/27/201011/29/201012/1/201012/3/201012/5/201012/7/201012/9/201012/11/201012/13/201012/15/201012/17/201012/19/201012/21/201012/23/201012/25/2010exp300liftexp600liftVisible because 600 imp/mhh pulls away from 300 imp/mhh and control
Confidential & Proprietary• In previous years 70% of revenue generated in Q4• Strategic situation – declining sales for past 2 years...• Mountain of inventory that wasn’t moving81Holiday Period
Confidential & Proprietary• Client expectations 22,000 – 26,000 (2 years of declines)• Our forecast 42,500 units.• October meeting where we discussed the projections• Lowes retail provided with forecasts but generally ignored them8282Holiday Period
Confidential & ProprietaryResults• Broke Rockwell Sales Records• Never sold so many, even during productintroduction• Inventory problems. 40% of stores ran out byDecember!• Website had to be taken down!• $2 million additional revenue for free• We might start business in inventory forecasting8989“PrecisionDemand has solved the problem oftransitioning direct response success to retail” – TomDuncan, CEO Positec USA“We gave PrecisionDemand an impossible task and[they] exceeded our expectations!” –Rhonda Tate,Director of Operations, Positec USA
Confidential & Proprietary 90TV The futureImplications and Major Shifts
Confidential & ProprietaryCurrent State of TV Advertising
Confidential & ProprietaryOutdoor vehicle (manufacturer not shown)0%5%10%15%20%25%TNTHISTESPNDISCFOXNCSPKNGCMILSPDTVLSYFYVSESPN2CNBCUSAAMCHIMSNBCENNHLNG4IDGSNBBCAFSCTBSCBETAENCMDYCNNFXVH1NICKHGTVBRVOTLCENTNANMTVFOODOWNOXYGLIFMLBNEquinoxMedia Plan ComparisonPD Buy Past
Confidential & ProprietaryIndustry has been focused on impressions94• David Poltrack, Chief Research Officer with CBS: “*Nielsen will+ remainthe currency for the near future” (Worden, 2011).• Charles Gabriel, VP of Sales at AOL, “Nielsen is the de facto standard interms of measurement and audience delivery.... it makes sense to havethem create that common currency across both mediums.” (Rodgers andKaplan, 2012).• Steve Hasker, Nielsen “we’ve created a currency” (Goetzl, 2012; Nielsen2012).• Rentrak recently reported that “*Rentrak provide...] television ratingscurrency” (Rentrak, 2012)• Irwin Gotlieb GroupM: criticized the proliferation of different metricsthat are becoming available online to measure consumer behavior, andhas called for the industry to adopt standardized metrics such as theGRP as the general advertising currency (Gotlieb, 2012).
Confidential & ProprietaryBut impressions can produce no lift-0.4 -0.2 0 0.2 0.4 0.6 0.800.511.522.533.544.55x 10-5Correlation coefficientPhoneresponsesperimpression
Confidential & ProprietaryConclusions• It is not just that TV is alive and well.... TV content is better than everbefore• TV advertising is the area that is behind.• Panels will no longer be the primary measurement vehicle• STB targeting can be performed now (30% of US HHs have return path).• Conversion tracking is now possible• Targeting is now possible• Watch for a rapid increase in ad relevance
Confidential & ProprietaryWhat will happen when TV ads become more relevant?97• Higher advertising revenue per display• Higher spot prices• Higher consumer satisfaction• Fewer ads
Confidential & ProprietaryEmail:firstname.lastname@example.orgCitations, collaboration, business opportunities please contact me!All work is patent pending.98