MARKETING executives used to complain, “Half the money I spend on advertising is wasted; I just don’t know which half.” The Internet made that joke an anachronism, at least in text-based media, offering advertisers a measurable return on their investments.
But the exposure and effectiveness of ads on broadcast media like television and radio, which still claim more than 50 percent of all ad spending, remain as immeasurable as ever. Marketing executives still don’t know which half of their broadcast spending is squandered.
Integrated Media Measurement, a start-up in San Mateo, Calif., wants to make advertising on broadcast media more efficient. Tom Zito, its C.E.O., boasts, “The simple way to think about us is that we’re doing for broadcast media what Google did for the Internet.”
That is a grand claim. But Mr. Zito, who previously worked as a rock critic for The Washington Post and as a staff writer for The New Yorker, has chutzpah to spare and a passion for technology. He started four technology and entertainment companies, including Axlon, a robotic-toy company that he took public, and Garageband, one of the first online record labels, before he helped found Integrated Media in 2003. This time, he may be onto something bigger, and more lasting. (The other co-founders are Amanda Welsh, the senior vice president for research, and Al Alcorn, chief technical officer.)
Integrated Media, also known as IMMI, uses existing technologies to do something new. It recruits teenagers as well as adults up to age 54 to carry a special cellphone at all times for two years. (In exchange, it pays all their cellphone costs.) The phone captures 10 seconds of audio from its surroundings every 30 seconds. Those samples are compressed into small digital files, called fingerprints, and uploaded to the company’s servers in California. There, the files are compared with samples of the media being measured, using a technology called acoustic matching.
Thus, IMMI can measure the number of participants who have heard an advertisement not only on television and radio, but also on digital video recorders, game players, cellphones, DVDs and CDs. The technology also works at films, concerts or sporting events.
That goes far beyond the measurements provided by Nielsen Media Research, which has long dominated the broadcast industries. Nielsen tracks viewing habits of households, rather than individuals, and has struggled to measure accurately the exposure of people to ads across different media. And it cannot really tell whether an ad encouraged someone to see a movie, TV show or event, or make a retail purchase. But IMMI can, its founders say. It tracks not only whether participants responded to a promotion to view or listen to other media, but also whether they made retail purchases after viewing or hearing an ad.
“We use something called a Bluetooth beacon, which our clients can install in stores,” Mr. Alcorn said. “We can know when an IMMI panelist goes into a store, and we can see what, if any, advertisements they were exposed to” before that.
Steve Jurvetson, a venture capitalist at the firm Draper Fisher Jurvetson, was the primary investor in IMMI. “It’s one of those rare ideas that just smacks you in the forehead,” he says. “It’s pretty bold: they want to passively monitor everything that someone consumes in terms of media.” In all, Draper Fisher Jurvetson and another firm, Advanced Technology Ventures, have invested $14 million in the company.
IMMI has signed up 10 clients, including NBC and ESPN. “I don’t think that IMMI is the last stop, but frankly, we have nothing better right now,“ said Alan Wurtzel, the president for research and media development at NBC. In addition to signing up broadcasters, the new venture wants to sell its research to advertisers and the agencies that create and place ads.
Already, research has produced some surprising results. The company discovered, for example, that panelists who watched a Burger King commercial with a tie-in to “The Simpsons Movie” were 40 percent more likely to see the film than those who saw only television, radio and theater trailers for the movie. IMMI also determined that 10 percent of the audience of “Heroes,” the television series, watched it over the Internet, a larger figure than NBC had thought.
Of course, there are any number of obstacles to IMMI’s success. Right now, IMMI measures the exposure and effectiveness only of audible media, although Mr. Zito says he plans to track which Web pages people are reading, too.
But the most obvious challenge to the company is that many people may find its technology an intolerable intrusion into their privacy. Will enough people be willing to carry around a cellphone that logs all their media use?
IMMI has signed up 3,000 participants in urban and suburban centers, and hopes to recruit an additional 2,000 in more scattered regions. But it will require more to compete with Nielsen’s endlessly replenished volunteer army.
Ms. Welsh, who wrote a book on privacy called “The Identity Theft Protection Guide,” asserts that IMMI’s cellphone does not preserve or transmit conversations, but only matches digital fingerprints to broadcast media: “If you’re planning a bank robbery while listening to a radio all day long, all we know is what radio station you’re listening to,” she says. In addition, she asserts, the technology is carefully explained to all panelists.
IMMI’S research could precipitate a turbulent, unpredictable era in broadcasting. The revolution of measurable advertising continues to trouble traditional publications, which for decades were subsidized by inefficient advertising. That revolution spawned novel advertising forms like key words, contextual ads and sponsored links, as well as new ways to calculate the effectiveness of more conventional display advertising. Google, the leader in creating and selling such measurable advertising, has prospered, while newspapers and magazines, which depended on older forms of advertising, have floundered.
Who knows what a similar revolution will bring to broadcast media?
