Tuesday, March 23, 2010

Rentrak. Stickiness. And, Comercials.

Rentrak has a “Stickiness Index.” It’s been in operation for about eight months. What the index measures is how long viewers stay engaged in a TV program.

According to Bruce Goerlich, chief research officer at Rentrak, the value in this for advertisers lies in the fact that the longer a person watches a program, even when controlling for exposure, the more likely they are to recall the commercials.

As Bruce puts it, “That’s what ‘stickiness’ is: It’s the percent of a program watched on an index basis.”

My question is, if Rentrak can measure the “stickiness” of a program, can they also measure the “stickiness” of a commercial?

“Stickiness” is measured on a second-by-second basis. The way that Rentrak determines “stickiness” is to take the average percent of a program viewed, divided by the average percentage viewed for all programs of that duration – 30, 60 or 120 minutes.

Rentrak’s data comes from some 4.5 million set-top boxes in 2 million AT&T U-verse TV homes.

So why can’t Rentrak’s “Stickiness Index” also work for commercials? After all, logic seems to indicate that if recall for a commercial increases the longer a person engages with a program, the same must surely hold true for the commercial itself.

In other words, the longer a viewers engages with a commercial, the better the recall of that commercial.

Couldn’t Rentrak determine a commercial’s “Stickiness Index” by taking the average percentage of a commercial viewed, divided by the average percentage viewed for all commercials of that duration?

Of course they could.

The question then becomes, how is that of value to an advertiser?

Well, going back to yesterday’s post, what it could do is help the advertiser determine their ROPE – Return on Production Expenditures.

“Sticky” commercials, after all, deliver a better return on production dollars spent than “non-sticky” commercials.

If an advertiser pays for 60 seconds to be produced, it’s because they want 60 seconds watched. If they only wanted 15 seconds watched, they would have produced a 15-second commercial.

The talk these days is all about value-based compensation models. If there is value in stickiness, then why don’t advertisers take Rentrak’s data and start paying their agencies accordingly?

But that’s a question for another post.

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