5 Things You Need To Know About Set-Top Box Data And TV Ad Targeting

Everyone says they use it; odds are, they really don’t. Here is what using TV Set-Top Box (STB) data actually looks like:

  • You take a list of target voters (preferably a large list of tens of thousands, hundreds of thousands, or millions), and then pass it to an STB data vendor.
  • Vendor sends you back multiple sets of files with millions of data points. These files are typically massive.
  • The data files contain up to second-by-second data for each tuner that the vendor has matched for you.

Once you’ve got the matches back from the vendor, you’ve got to process the data. Data can come back as second-by-second records for what each tuner was tuned to. So to figure out that one of your targets was watching an hour of Duck Dynasty on Tuesday, you have to roll up 3,600 seconds of viewing, or 3,600 rows of data. Now you’ve credited one of your viewers as watching Duck Dynasty on Tuesday. You have to repeat this process for every second of data, for every viewer, to get tallies of how many viewers you should credit to each TV show throughout the day. So let’s say you do this for process for 10,000 people. Now that you have tallies, you have to scale the tallies up to take into account the fact that your sample of data was just that — a sample. In reality, you are only observing 8% of the target voter universe in the data. So you need to scale your data up to take into account the whole target universe. What this means is you need a lot of servers, a lot of programming, and a lot of competence. In other words — be wary if someone throws a Rentrak or Fourthwall logo in their slideshow, odds are a.) they aren’t actually buying the data, or are buying summaries not based on your vote file b.) they don’t have any clue how to match to your campaign data c.) they don’t have any clue what to do with matched data. Ask yourself: Does the guy selling me this look like he’s a computer programmer?

Match Rate is king. When buying STB data, you care about the match rate and coverage. Let’s assume that your target audience lives in the AnyCity Designated Market Area (DMA). You talk to the two STB data vendors and both claim to have coverage over that DMA. You push and discover that one firm has 100k households that can be matched to, and the other has 50k households. If all else is equal, you should choose to match with the vendor that has more households in their system, because more households typically result in better match rates. A higher match rate will mean you have more sample data to work from. Just like a poll, a larger sample means more accuracy on predicting where your targets are watching TV. So do you just go to the biggest cable companies to get the best match rates? After all, they have the largest user foot prints, right? It turns out that right now, the large companies like Time Warner and Comcast do not provide raw data streams for sale. Some big companies have tools they have created that have started to move in the right direction, but they just aren’t offering what you really want: the raw data streams (though we can’t wait until they do!). Right now, the two large players in set-top-box data are Fourth Wall Media and Rentrak, and they aggregate data from lower tier cable companies like Charter or Brighthouse.

STB data is expensive. Right now, STB data is primarily sold by Fourthwall Media and Rentrak. DirectTV and DISH sell something similar to viewing data, and cable companies such as Comcast have announced they will sell data at some point in the future. There are plenty of vendors who sell it, but much like steak, not every vendor has every cut, and not every vendor’s stock is of the same quality. A match can cost cents or dollars per match, and may have a recurring monthly cost or a flat fee. In other instances, vendors may just put a flat price on the data and say take it or leave it. A general rule of thumb is you want to have about a 5% match against your target universe (or better), so if you are trying to hit 100k voters, you want to match 5k STBs; or if you’re trying to hit 1M voters, you want to try and have at least 50K voters matched (there are caveats if you get larger, but not a bad rule of thumb). Our firm has purchased STB data for 4 figures and even 6 figures. There is no hard and fast rule, but let’s put it this way: Your data costs should be below 1% of your media buy, otherwise you’re paying too much (remember it’s not just the data – you’ve also got to pay someone like us to analyze it).

Think this approach is only viable in large campaigns? Well, it’s true the ROI is higher the more you spend, since the cost of the data and analysis stays largely fixed. But given how cheap the data is relative to the cost of TV buys, we’ve produced attractive “all-in-net” ROI at even the single-DMA level. Remember the first nuclear bomb weighed tons and they dropped it out of the back of a plane; now, they can put them in suitcases — it just took some time and innovation. TV STB data analysis is the same: Optimus is miniaturizing it, and bringing it down the cost curve. Check out our case study where we made it work with $200k in the Houston DMA. Rest assured, you can make this work with much smaller buys as well.

Is STB data about saving money or getting more out of your audience? Both. Set-top box data gives you a much better idea when the specific audience you are trying to reach is on TV. Because you know where the audience is and in what quantity, you are able to combine that knowledge with pricing data to ensure you are buying your audience efficiently. If you are buying your audience efficiently, you are able to make a given budget go much further (in terms of impressions delivered to target audience). In our recent cases, statewide campaigns/issue advocacy groups we have worked with have achieved 25-50% efficiency gains over traditional buying methodologies. Think about that for a second: that means if a given TV buy, planned the conventional way, is going to net you 1M impressions against your targets, properly utilized set-top box data can help you achieve 1.25M-1.5M impressions on the same budget. To learn more, contact us to setup an appointment.