There have been some numbers that have come out lately that have made me laugh. The funny part was how they were presented as something of significance in their numbers alone. For instance, a report came out a few days ago that showcased NBC’s CPM averages being higher than the other networks. Another post today pegged the Connected TV penetration of Apple TV at a high of 32%. Unfortunately, they are both somewhat irrelevant when being shown as a number value above all else. There is a high value placed on the numbers alone and they do not always present the strongest argument for a product one way or the other. This type of reporting seems only to confuse the matter.
In the case of NBC, the lift in the average was attributed to News and Late-Night programming and the article essentially held it in high regard based on its singular number value. The CPM average of $20.85 is more than four dollars higher than its closest competitor. Besides the fact that FOX shows a considerably higher CPM at the end of the report (due to only counting its two hours of primetime each night and one hour of weekend morning programming) there are a number of issues with the report in the first place. I am sure somewhere within NBC/Universal’s walls, there is a hollow victory. Is it ludicrous to intimate that News and Late Night programming can make up for Primetime deficiencies. It points to a volume issue. The basis that NBC is leading because of those high CPMs is like saying that Carl’s Jr is a stronger fast-food chain than McDonald’s based on its 6 dollar burger compared to McD’s couple dollar Big Mac. It may be nice to say that you item costs more, but if you don’t have the volume of sales, it’s a non-story.
I count the story about Apple TV and connected TVs to be in the same realm as the NBC CPM story. Yes, 32% is a nice number when trying to determine market share, but what does it really mean? Some would argue, in fact, that the myriad of newest generation plasma and LCD televisions that have been sold be the highest share-holders of connected TVs. I would even go so far as to intimate that most people don’t know what a connected TV truly means and some people might even think they have a connected TV when they do not.
A relative problem in the Home Entertainment industry is that there is/was a strong push to convert to Blu-ray with the promotional push to use BD-Live for more content. It ends up that huge numbers of people aren’t even connected to access that content and, if they are, the BD-Live experience tends to be quite underwhelming.
In these cases, the underlying piece that ties them all together is context and engagement. The numbers on their own are nice and all, but out of context they seem more like a waste of time. Factoring in the elements of engagement would be even more useful.
The post about Apple TV does bring up solid points about forms of engagement with growing incorporation of the AirPlay product. The product provides solid opportunities for the future, but it’s not here yet and we have yet to see what the uptake is on that.
With new technologies, we know that it takes time to build those engagement numbers and one of the biggest obstacles is adoption. If we are going to work so hard to do drive adoption and engagement and then ultimately celebrate numbers that don’t really matter (like referenced in those NBC figures for a well-established medium), we’re only doing going to run ourselves in circles.
Analysts are engaged to try to bring understanding and order to our businesses to clarify solutions. Make sure you don’t run the risk of only looking at the numbers without dissecting the context.