New ad spend player Standard Media Index set to give Nielsen a run for its money—UPDATED

  • Media
  • June 6, 2013
  • Ben Fahy
New ad spend player Standard Media Index set to give Nielsen a run for its money—UPDATED

When it comes to ad spend, there are a few measures available, from the ratecard-based Nielsen AIS, to the industry-supplied figures released annually by the Advertising Standards Authority, or other quarterly releases sent out by various industry bodies. But a new player is about to take the field, with Standard Media Index (SMI) launching in the New Zealand market this month. 

SMI is an independent global publisher of media agency advertising expenditure data that already operates in the US, the UK and Australia. And it claims it "will deliver the most comprehensive view of New Zealand's advertising market when it launches". 

Chaired by ex-Fairfax Media chief executive and current executive chairman of The Hoyts Group David Kirk, he says in a release it has already delivered a new level of transparency to the Australian, US and UK advertising markets and it's looking forward to doing the same here. 

"... I have seen for myself how increased knowledge of advertising expenditure can benefit all stakeholders within the media industry,'' Kirk says. "Having been involved in media at an executive level for many years I know the difficulty of operating in an opaque advertising environment, which is why I'm so pleased to be involved in SMI and its transformative impact on media markets.'' 

SMI, in which Kirk's Bailador Investment Fund bought a key stake in 2011, has partnered with 15 media agencies in New Zealand who buy advertising space on behalf of the country's largest advertisers to produce what it calls "the first truly independent advertising expenditure figures". Each month, the agencies provide SMI with their actual media bookings (the agency agreements ensure no individual client or rate information is revealed) and it then combines them to deliver a total market picture of agency expenditure across all media types and 30 global advertiser categories.  

Nielsen also provides similar figures, although as it calculates spend at ratecard when most agencies get significant discounts, its figures are often much different to those provided by media owners to the ASA. Nielsen is currently working on a project to rejig the AIS after recognising there are some issues with it (it doesn't have access to Sky's figures, although they are available on Sky's website, and RadioWorks doesn't supply its direct data).

Because it is based on agency figures, SMI is expected to be more accurate than Nielsen, and it is thought SMI will also offer clients a gauge on exactly how much discount is available in the market (something some media owners might not be too chuffed about). But unlike the end-of-year figures from the ASA, it won't include direct spend, which is significant for radio, newspapers and magazines.

When it comes to calculating online expenditure, Google doesn't play ball in any market, so the IAB already relies heavily on the agencies to provide figures but direct is an estimate. Interestingly, OMD's departing managing director Chris Riley told StopPress last year that he believed a big chunk of change was falling through the cracks as Kiwi clients increasingly put their ads on international sites that aren't represented in New Zealand (check out Adweek's series on the fradulent online advertising industry that is thought to be stealing millions from advertisers through bots and bogus publishers). 

In addition to the monthly advertising bookings provided directly from the agencies' booking systems, SMI says its data is also "by far the most detailed and timely". 

"Consequently, for the first time, media companies are able to gain an accurate source of competitive data and unique insights which with to fuel their sales and investment strategies." 

SMI's managing director Australia/NZ, Simon Kent led the negotiations with New Zealand's agencies and said they had embraced the SMI model. 

"Our New Zealand agency partners knew about SMI and asked us to expand across the Tasman. We applaud them for this foresight and innovation. Everyone involved in the media sector understands the accelerating rate of change and the issues this is creating in the market,'' he says. "And as the sector becomes more data driven, understanding real time demand is critical. But by partnering with SMI the agencies now have a deeper view of the media market to use when investing their clients’ marketing dollars."

UPDATE: Kent says it's been an 18 month-two year process to get the agencies on board. 

He sees SMI and Nielsen as complementary services because Nielsen's estimations based on ad units work alongside the actual spend data provided to SMI by agencies. 

He admits it will only be a small proportion of the revenue for some media like radio, magazines and newspapers because it doesn't count direct spend, but it has no plans at this stage to include those figures to create a total picture.

"We focus on getting a smarter pool of fast, accurate data. If we did direct spend, then we just fall into the trap of the others where we're estimating."

One major point of difference with SMI, he says, is that it can specify media owners so it can compare spend between TVNZ and MediaWorks, APN and Fairfax, or Yahoo and Facebook. Individual rates or individual clients aren't shown, however.  

To create the view of advertising expenditure across all media, SMI has 'harmonised', or matched, more than 10,800 individual booking codes from the New Zealand agencies against 2,597 master codes (each master code represents an individual New Zealand media asset). And to create the New Zealand category data, SMI has assigned more than 17,500 individual client and product codes to its 30 global advertiser categories. 

SMI also delivers to its clients and agency partners its data analytics software, SMI Dataminer, giving them the tool to quickly navigate and find key insights within the large data set. 

Kirk says these insights have already led to more informed sales conversations and better strategic decision making in the Australian and other global media markets. 

"We are confident there is very strong demand for the same information in New Zealand and look forward to working with the industry to develop this exciting market." 

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