WTF is the difference between measurement and currency?

By Michael Bürgi

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 …read more

Source:: Digiday