Rock.Hard place.Music industry.

My friend’s little home studio where I recently recorded some music of my own. 
What a time to be alive ! 

The much embattled music industry complains about You Tube not paying them a fair share of the ad revenue that it makes from music videos. (Read here). As a lifelong music fanatic and a big You Tube lover - among other things, You Tube has put several lifetimes worth of music within easy access, after all ! - this puts me in a quandary. It's a tough one.

On the one hand, according to industry body the IFPI, the revenue per user going to the music industry from You Tube and other free services is a staggering 20-30x lower than from paid streaming services ($0.6 vs $18 in the chart below). On the other, You Tube et al deliver 5x the audience. Wouldn't the biggest distributor hold and exercise similar bargaining power anywhere ? And from the POV of music itself, You Tube are one of those at the frontlines of democratizing and leveling the field for whoever wants to give it a shot - an often unacknowledged cultural-good role that it plays. Could that be a worthwhile 'externality' (in economics-speak) ?

Commercially, one way of looking at it is to ask the opportunity cost of not being on You Tube. Who can tell for sure but one suspects it would be significant - going by what we see all around us across music or video or gaming , surely most of those being monetized by YT would not otherwise opt for a paid service ?!

All of which is not to say that artistes and/or creators should not get paid their due. On the contrary ! Certainly the reported 30x 'Value Gap' (read and download the IFPI Global Music Report 2017 here) seems excessive and should ideally be reduced. The point,though is that it's, well, complicated. The ground under 'due' itself has shifted dramatically thanks (or no thanks, if you prefer) to the massive tech-disruption that this particular market has been confronted with. 

There are just no easy answers.

It's heartening to read that the music industry has turned a bit of a corner recently and reversed years of decline to post a + 6% revenue growth driven by streaming (+60%). One hopes this continues and that all parties come together to find a mutually beneficial solution. Like most human endeavors, music (and art in general) relies on commerce to thrive ; but like only those few special endeavors, I believe it goes beyond commerce !

I for one will be watching this space. Or 'listening' to it ! :) Thanks for reading. Cheers !

Removing the Measurement Cap !

Measurement hasn't perhaps got the attention across the wider marketing ecosystem that it deserves. While the challenges of digital measurement - Person vs Cookie, Third Party vs Walled Garden, Cross-device/platform measurement and attribution, etc.- are out there in the conversation , it tends to be mostly among specialists.

The cost from the lack of measurability should be assessed more rigorously and appreciated for what it is - a cost. And this is where a ground-level micro perspective may play a part.

For example, in the simple - though not simplistic! - case of skippable online video (OLV) advertising when average viewing frequency per cookie is known , the duplication rate makes a significant difference to the actual 'person'-reach and therefore frequency and cost.

Imagine a hypothetical OLV campaign of 500,000 paid views with a specific creative copy with an average VTR of 20% targeted at a demographic base of 1 million individuals with an average cookie view frequency of 1.5. As the chart at the bottom shows, depending on what the duplication is in reality, reach can be anything from 33% all the way to 5% and below. Cost per reach obviously increases accordingly.

But it goes beyond just  cost per reach.

Assume that the actual 'person'-reach is close to unique cookie viewers, i.e. an actual 'person'-frequency of around 1.5-2.0 ish (meaning the user wouldn't watch the same spot more than a couple of times or three - a reasonable enough assumption on anecdotal evidence in the absence of anything else ), what happens when another 500K views are bought , say, in the following month ?

Now, at 20% VTR, around 2.5 million impressions would have been already served first time around to generate those 500K views. These impressions would have covered most if not all of the addressable 1.0 M TA base already. So in terms of incremental audience in Month 2 , what are the chances that users opting to skip or drop out the previous month would choose to view the same spot now ? Or that those who viewed it last month would view it again this month ? Neither case is impossible or even improbable but ,well,it doesn't sound very probable either ! The math just does not stack up. Now this becomes not only a question of X% additional cost per reach but also the very tenability of the campaign, i.e. the possibility of a 100% additional cost

This example is obviously illustrative - and,yes, extreme ! In reality, a buyer would take audience size and related info into account before deciding on the buying volume. Equally important, copy would be refreshed regularly. And this is only a case of purely demographic-targeted buys which in reality is a relatively small number of buys.

(Measuring outcomes differently - say, through engagements, etc - doesn't affect this argument. Firstly, they are not mutually exclusive - one doesn't preclude the other. Second, this goes for those measures too, e.g., substitute 'click' for 'view' and the same Person vs Cookie discrepancy holds. Third, 'engagements',for example, tend to be low and stable in this format and , moreover, still a function of scale)

The point here though was to illustrate costs that may fall in the cracks of micro campaign management away from headlights and headlines.Should they - and numerous other more complex cases across channels and formats - be thought about, quantified and aggregated, it could provide the urgency and push which would expedite the move towards better measureability sooner.

Almost the entire illustration here is conjecture built on assumptions. Only the facts and figures could really tell. And for that to happen requires an understanding from the ground-up and cooperation among both marketers / buyers and platforms / sellers. Most questions are not easily answerable and require advanced measurement , including (especially ?) Third Party but some 'clues' could also be provided by platforms - for example, viewing distribution even if at cookie level. The buyer needs to think about that and ask , the seller needs to appreciate the market growing potential of such moves and provide ! The onus is on both because the benefits go to both.

As a post script : talking about frequency and such leads me to a sign off on Frequency Capping. It's a no brainer that Frequency Capping is a huge boon in today's digital era.

But how meaningful is it in the context of served impressions for skippable videoads with completed (or at least paid) views as KPI ? In the above hypothetical example of 20% VTR and an average View frequency of 1.5-2.0, how meaningful is a Frequency Cap of , say, 5 (or 4 or 6 or 10) here ?

When it is highly unlikely that a person will watch your ad three or four times , the cap becomes redundant at best. And at worst, you are limiting the chances of future exposures by not serving it again.

Also,as an aside, when a viewer has actively opted to watch an ad multiple times, is that still a waste ? One to ponder