WTF is the difference between measurement and currency?

This article is a WTF explainer, in which we break down media and marketing’s most confusing terms. More from the series →

In this season of tectonic change in the world of media around tracking — from cookie deprecation to Nielsen’s continued ratings depreciation to the onslaught of new forms of measurement flooding the digital and video marketplaces — the words “measurement” and “currency” get bandied about. Often interchangeably. 

Hell, I’ve done it in conversations (hopefully not in my stories). But they are not the same, and one cannot and should not take the place of the other.  

So what’s the definition of each?

Measurement can be broken down to the tool of measurement and then the metric of measurement. A ruler is a tool used to measure length in metrics such as inches or centimeters. A measurement company is a tool used to measure audience size or business results in metrics such as unique viewers or website visits.

Currency is the value assigned to a metric and that is agreed upon by multiple parties. For example, a gallon of gas does not inherently have value, but it is ascribed value by people and companies thanks to its use as fuel, which is why gallons of gas are exchanged for money at gas stations. 

So currency can’t exist without some form of measurement to enumerate its value. One of the reasons for the confusion is that while some in the industry see currency as a subset of measurement, others argue it is rather an application of measurement — a state of something that only exists in the context of a transaction, which can include a potential transaction.

Here’s how Bob Ivins, chief strategy officer for TVSquared, a 10-year-old measurement firm recently acquired by ad tech firm Innovid, puts it: “Currency is a measurement metric; one in which a buyer and seller agree to transact on. Measurement is much broader, encompassing not only currency, but cross-platform reach, outcomes and audience insights that are used to inform video mixes and creative/media optimizations that, ultimately, improve the efficiency and effectiveness of advertising.” 

When do measurement and currency interact in the advertising business?

Nielsen for decades was the only game in town for measuring TV audiences. The measurement it provided — ratings (the number of people viewing) — has been used as currency by media buyers and sellers: An advertiser would agree to pay a sum of money to a TV network owner in exchange for reaching a given number of people, as measured by Nielsen.

Why do you say Nielsen was the only game in town?

Within the past year, Nielsen’s measurements have been exposed as faulty, to the point that the Media Rating Council has suspended Nielsen’s accreditation. As a result, the all-important industrywide agreement on the value of Nielsen’s measurements — the key factor making them a currency — has been called into question by companies such as NBCUniversal and opened the door for alternate measurements to be adopted as currencies.

Nielsen now faces competition from several companies, such as Comscore, and VideoAmp, all of which are trying to measure TV for various forms of effectiveness — from attention to engagement to generating business outcomes. Their efforts to measure these elements can generate various forms of currency. Many of them are trying to make their mark as not only valid forms of measurement, but important forms of currency off of which to evaluate the advertising.

All of this is coming to a head in this year’s upfront marketplace, where billions of ad dollars are earmarked in advance by advertisers and their media agencies across these media options. The measuring of the services — and the currencies that can be generated from them — make for what’s expected to be a complex market for at least this year, if not longer.

Are there different types of measurement that are used as currency in advertising?

Yes. Technically any advertising metric could be used as a currency. For example, Google sells search ads on a cost-per-click basis, making clicks a currency. Additionally, some ad sellers offer business outcome guarantees that promise to deliver a certain amount of site traffic or lift in product sales to an advertiser, making those business outcome metrics into currencies.

There’s a growing void between what TV networks and publishers value as currency and what brands and agencies value as currency, argues Marilois Snowman, CEO and founder of media agency Mediastruction. Her example: “Brand A might build modeling that determines a particular [network or station or publisher] is a top performer in driving web visits or even sales. That particular [network or station or publisher] might even have fewer viewers than a competitive [outlet]. In this case, the agency’s performance measurement is more important than the viewership measurement. So traditional currency of viewership isn’t valuable to Brand A.”

In other words, whether a measurement is valued as a currency is in the eye of the beholder?

Exactly. As one head of investment at a major holding company buying agency explained, “We may want to measure high-value audiences, we may want to measure outcomes, attribution, all these other things. Currency is the price we trade on, and it should include value.”

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