Advertisers are wasting billions with antiquated measurement: here’s what must change

That’s the scathing assessment of the IAB’s new report released this past week during the annual leadership meeting, which quizzed 200 executives across the spectrum on their readiness for a very near and real future that will be far less reliant on third-party data.

While much of the conversation at the IAB’s annual leadership conference this week focused on the instability of third-party data for digital, the reality is that the risks to television are even more real.

As TV similarly undergoes a tectonic transformation in measurement and currency, the market is running the risk of repeating many of the same missteps by relying on the third-party data sources that have led to the impending “measurement blackout” the IAB is now sounding the alarm over.

Advertisers are wasting billions with antiquated measurement

It is not an overstatement to say that the decisions, or lack of decisions, being made today put the very future of the $170bn+ global TV ad market at stake.

As marketers embrace new ways of measuring and directing their advertising strategies, they are realizing the immense opportunities for better measurement and engagement, as well as coming to grips with the immense waste the current legacy TV advertising systems have enabled to go undetected for decades.

In Q4, after reviewing 37bn hours of linear television viewing, Samba TV discovered that 97% of all linear ad impressions served in the US reached the same 55% of consumers. In the UK and Germany this number is just as stark, with 95% of all linear impressions reaching just half of audiences. By relying on less diverse legacy measurement systems that fail to leverage true first-party insights to identify incremental audiences, marketers spent nearly every linear television dollar reaching the same half of audiences over and over and over again.

It’s time to move on from short-sighted third-party reliance

While pundits talk up the growth of streaming and the ad targeting possibilities of CTV, far too many brands are using a linear-first strategy and relying on the same third-party data that has now placed the digital world in a precarious position.

Despite this alarming reality, according to the new IAB report fully two-thirds of brands surveyed say they don’t plan on adjusting their measurement strategies this year. That’s in spite of a year’s worth of stories warning about the impending end of cookies, the collapse of Nielsen and the already massive ad targeting shockwaves wrought by Apple’s new ID policies (just ask Facebook).

Even as many chief marketers worry about how to effectively navigate the demands of our modern privacy-first era, and the pressing need to accumulate as much first-party data as possible, the IAB found that a stunning 59% of those surveyed are not upping their investment in first-party data. In fact, the report found that investment in third-party data climbed by just 8% over the past year. As the media landscape continues to fragment and access to third-party data becomes more unstable and less representative each day, advertisers and media companies are facing a perfect storm moment requiring decisive change for the future.

The road ahead: future-proofing your ad strategies with first-party data

The IAB has put its finger on the central opportunity before us. With numerous disruptive technologies emerging that promise better omniscreen tracking and measurement, brands no longer need to stick with solutions built on legacy technologies and the crumbling foundations of third-party data. This is just like building your plans around cookie targeting, knowing midnight is about to strike.

To be sure, large-scale change can be hard and our industry is full of those promising solutions to everything and anything that ails us. Many of these new approaches are complicated and lack history. Consider that in the IAB report, less than half of industry leaders (46%) said they were knowledgeable about Google’s Privacy Sandbox, the very initiative ostensibly aimed at helping to establish a post-cookie solution.

For those searching for the best path to begin moving forward on, the IAB report provides helpful benchmarks to measure progress toward a new multi-currency world where advertisers are empowered to understand and maximize the effectiveness of their spend.

It all starts with ensuring you are working with partners that have direct relationships with the consumer. This is the future-proof solution for advertising, across every screen in the consumer journey. We need to begin collectively moving in this direction soon, before the path ahead risks veering into the IAB’s feared “blackout” and the true multi-currency world becomes even more restrictive and closed to marketers.

Ashwin Navin is co-founder and chief executive at Samba TV.