Helping the TV networks and other content publishers determine success given today's media-consumption patterns is Josh James, CEO of Omniture, a Utah-based web-analytics firm. Unlike Nielsen and ComScore, which measure online audiences from a broad standpoint, Omniture works on a client-specific basis to determine more-granular viewing habits such as online ad engagement and behavioral targeting across TV and the web. Omniture even partnered with MSNBC recently to help its producers determine which stories should be featured on its broadcast based on web traffic from the past two to three hours.
"A lot of these organizations feel they have an obligation to educate the public, but there's also a component of giving them things the public wants to view," Mr. James said. "Now they have that data in front of them."
Key TV buyers have said Nielsen's new, preferred "C3" commercial rating, which measures live viewing of a program plus three days of time-shifted viewing on digital recording devices, is only a halfway step toward metrics that provide more accountability. Mr. James said new metrics will have a lot more online components to them.
"Digital data has given you a one-to-one understanding of every single visitor or every single viewer," he said. "It's pulling the rest of the industry into demanding the same sort of accountability."
Mr. James spoke with MediaWorks about today's media-measurement criteria, the crucial role DVD viewership and digital downloads play in a show's success, and why online spending could see some major commitments from top brands by 2009.
MediaWorks: "Jericho" and "Gossip Girl" are two of the strongest examples of shows that have become hits by different standards than traditional, live, prime-time ratings. How can changes in media measurement change the industry's perception of what makes a hit?
Mr. James: One of the big challenges is understanding the revenue-generation potential for commercials online. When you're streaming it and you show some commercials in the middle, some at the end, how many people are actually viewing that? Is it just playing on a screen or is someone actually watching it? There's a huge need for publishers of this content to actually understand what's going on, and that's where we come in. How many stops and starts? How many people skip over commercials? How many customers have set-top boxes now with on-demand commercials? We can tell which are being fast-forwarded through. Studio executives won't understand commercials if they're all being skipped through. If they're building a big business out of it, they get burnt if they see that [generic] data. It's more important than ever, because the models are changing so fast, to understand in real time how many commercials are being viewed, what are the different price points and the elasticity.
MediaWorks: How have some of these new viewing patterns affected revenue?
Mr. James: One of the big things we've always measured with these programs is the lifetime ability for shows to generate revenue. You've got to make that prediction very soon into the process -- whether or not a show's going to make money. We started to notice not only with DVDs, which actually started this off, but also all the online sales taking place and the digital downloads taking place -- just understanding the true revenue-generation capability of these different properties. Some shows wouldn't get a huge following in their first season and might not in their second season, but they end up making tons of money on DVD and see an increase in revenue when they're digitized and stuck online. You have to make sure not to cut the winners too soon and make sure you truly understand what a show's following is.
MediaWorks: Are there any shows in recent years that could have gotten an extra season or two out of these new success models online and through DVD sales?
Mr. James: Look at "Firefly," [Joss Whedon's canceled sci-fi drama from 2004]. They figured it out too late, and everyone had moved on to different projects. We just don't want that to happen again. You just have to remember that every project is going to have a different profile for how it sells. Each individual property is going to vary the percentage from each of those channels. You may have one that's really strong online and appeals to a certain audience, but you want to make sure you're able to capture that everywhere. It's more important than ever to gather multiple data sources, especially as a network executive, when it's your project and trying to get a buy-in from a studio, you're able to present them with this information.
MediaWorks: What are some ways you've been working with the networks at Omniture to help them program to meet these new expectations from a show's fans?
Mr. James: We've been looking at information and really able to understand whether a network -- should they take the time on their live program to push people to the web or not or sell that time as an ad? We can determine which one's going to make them more money or lead to more of a long-term following. We also have a lot of customers using it to change programming on that particular show. We can see which characters have created the most interest online and have scripts created around that. With a sitcom, you may see someone that says, 'You know what? We didn't know this character was loved so much. There's a fanatical following around this character. Let's make sure there's a big part for him."
MediaWorks: What's the online-spending outlook for 2008? Will we start to see some of the big consumer-goods budgets move there soon?
Mr. James: I just met with a CMO who manages a $3 billion [consumer-products] spend, and he said by 2009, his goal is to have 100% of his spending online. Just last year it was less than 10%.
MediaWorks: Do you think there are enough scale and reach opportunities online to justify such a major shift in spending?
Mr. James: The biggest concern they have is they want to make sure they're not just about moving ad dollars online and getting a better experience. All those things are true. One of the overarching concerns is that another company figures it out before them. If you're the last one to figure it out, you're at a massive disadvantage. Those that don't figure it out have to spend more money to get the same results.