Netflix picks EDO for outcomes measurement as it looks to justify premium ad pricing

Netflix has selected EDO as its first outcomes measurement provider for advertisers, estimating the search response and website visits their ads generate without requiring any personally identifiable subscriber information, the company said at its virtual upfront presentation on Wednesday. The integration follows a pilot over the past five months, said EDO CEO Kevin Krim. “Because they’ve taken a very strict view of not capturing, and therefore not sharing, any personally identifiable information, we had to innovate on the way we would match ad occurrences” with online response, he said. Check out the latest Ad Age events and award programs The partnership EDO announced late last year with Similarweb, which tracks digital behavior among millions of opt-in panelists without capturing any personal information, is key to making the Netflix integration work, Krim said. EDO is using what it calls a “micro-cohorting model,” which resembles what Google and Microsoft have experimented with in their ad data reporting, Krim said. “But this is the first time anyone has commercialized this kind of approach for third-party measurement, and it’s the only way you could solve measuring outcomes for Netflix given their requirements.” EDO’s approach works by taking anonymized groups of about 50 people defined by their ZIP+4 Code locations for short periods of time, then determining the probability they were exposed to a brand’s campaign on Netflix or not exposed, then comparing the search, site visit and app usage behavior for those two groups, Krim said. Besides adhering to Netflix’s privacy guidelines, the approach also helps better apply EDO’s digital response methodology to a connected TV world where viewership and ad exposure aren’t linked to time or program schedules as they are in linear TV, Krim said. Related news: More from Netflix’s upfront presentation Doing outcome measurement without using individual subscriber data is also increasingly important given an onslaught of 70 lawsuits brought in the past year under the Video Privacy Protection Act. The law was originally passed in 1988 in response to a video store leaking the video store rental records of Robert Bork during what would be his unsuccessful effort to win Senate confirmation to the U.S. Supreme Court. But its wording has been applied by trial lawyers to sharing of subscriber information by streaming digital video purveyors. The rise of Netflix’s ad-supported offering is “one of the most significant shifts in the television landscape,” said Edward Norton, actor, director and co-founder of EDO, in an interview between stops in New York during upfront week. “It’s indicative of the larger emergent reality that the way we define television networks is likely to change really radically.” Norton said he believes measurement of outcomes from advertising will become increasingly important relative to counting audiences as streaming increasingly overtakes linear TV, particularly given the relatively high CPMs of streaming. “We’re seeing performance on Netflix that justifies the premium pricing that they went to market with,” Krim said, based on response data measured so far from Netflix ads. In his upfront presentation, Netflix VP of Ad Sales Peter Naylor said early results of EDO measurement show viewers are four times as likely to respond to an ad on Netflix compared to other streaming platforms and 4.5 times as likely to respond as linear TV viewers. On Wednesday, Netflix announced its ad tier reaches 5 million monthly active users globally. As the broader TV market debates the future of who will count audience numbers as currency, EDO now has inked largely under-the-radar deals with most of the major CTV players to measure outcomes, Krim said. “Netflix vetted everything, and the technical capacity EDO has to solve the larger and more difficult technical problems of analyzing video on demand,” Norton said. “The fact that they jumped into doing that with us is, I think, affirmation of what we’ve said for a long time.” Upfronts and NewFronts blog Tracking the latest TV and digital ad pitches Read more here

Netflix picks EDO for outcomes measurement as it looks to justify premium ad pricing

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