After a career spent tackling some of the most challenging roles in Hollywood in films such as “Motherless Brooklyn,” “Fight Club’” and “American History X,” Edward Norton has started to work in TV.
Norton is doing his work behind the camera, but it could make him and his colleagues some of the medium’s most influential. EDO, an analytics company he co-founded with economist and entrepreneur Daniel Nadler, has in the past year struck alliances with Netflix, Disney, Amazon, TelevisaUnivision, Nielsen and Paramount Global, among others. It is also helping advertisers such as State Farm and SoFi determine how to spend their dollars.
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TV ad-sales executives have spotted the actor holding forth at a Disney presentation to advertisers and at a meeting of the VAB, a trade group that represents the TV networks. At the latter, Norton sounded “like a CEO. He’s very big picture and super articulate and understands the issues as well as any of us who are in the business,” says John Halley, president of advertising for Paramount Global. “He’s not just like a celebrity endorser. This guy is deeply into it.” Norton was “really interested in why there hasn’t been more progress,” says Mark Marshall, chairman of advertising and partnerships at NBCUniversal, in finding new ways to count TV viewers — an elusive Holy Grail for the entire industry as more viewers jump from linear television to streaming services to watch their favorite movies, series and sports.
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Norton and his colleagues are betting that TV networks and the advertisers who support them will find new worth in what EDO examines. While most tabulations of TV audiences hinge on calculating how many people see a show or a commercial, EDO does something decidedly different: It examines search activity tied to the appearance of a program or ad on TV. And it has created an archive of such behavior, collecting information for nearly a decade. Search activity, Norton argues, is a better proxy for consumer interest than any audience rating, and can be made readily available to buyers and sellers, unlike proprietary viewership data housed by streamers or consumer information collected by Madison Avenue giants.
“The value of counting and demos is plummeting to close to irrelevancy in our opinion,” Norton tells Variety during a recent phone call that lasts nearly two hours. The bulk of the conversation centered not on his newest film project, but rather the “super wonky” future of TV advertising technology. He envisions an industry where advertisers are much more attuned to proof that commercials prompt a TV viewer to search, respond and buy, rather than just happy to find out how many people merely saw something.
“Actually measuring the return on investment in a Wall Street investment grade way, that’s what people will expect and that’s what the streaming platforms — with us — will be able to deliver,” he vows.
Media executives have for years been growing increasingly dissatisfied with what is measured by traditional TV ratings. They have good reason.
As more viewers more to stream their favorites at times of their own choosing, the ratings are getting smaller. And no one has yet struck upon a single measuring technology that captures all the ways people are watching TV — in bars, on FAST channels, on-demand — in ways that satisfy all parties involved.
With that in mind, there is a growing interest in examining some other indicator. For some, that is what is known as “attribution” or “outcomes” — some sort of proof a consumer reacted to a commercial. So what if a TV viewer remembers a jingle or can do an impression of the Green Giant? To really drive value, the ad needs to spur a potential customer to request a brochure, visit a showroom or surf a website. With many new companies relying more heavily on the web and social media to interact with consumers and track their responses, media outlets are under new pressure to show different kinds of proof.
“It’s an expectation,” says Steve Bagdasarian, chief commercial officer at Comscore, another measurement competitor. It’s not a nice-to-have, as it was in the past.” Focusing on how ads lead to specific business outcomes “will fundamentally give a better sense of the value” of TV commercials, says Paramount’s Halley, and potentially help reverse some of the erosion in pricing the industry has had to navigate in recent years.
Norton might seem an unlikely ad-world guru. But he is quickly making an interesting stretch, one that enmeshes him in a high-tech battle for ad dollars. Norton is one of a growing parade of entrepreneurs who have entered the TV arena, hoping to find new business in an era when the sector’s old model has fallen apart. For the past few years, media companies have backed any number of upstarts that offer so-called “alternative currencies,” or new methodologies of calculating how many people saw content on TV or via streaming video on one of the nation’s mainstream networks or broadband hubs. Most of these efforts have aimed to destabilize Nielsen, the venerable media-measurement giant with TV ratings that still serve as the bedrock for most ad deals
Rather than fight that battle, EDO aims to leapfrog it. With Netflix, Disney, Amazon and Warner Bros. Discovery launching ad-supported tiers of their streaming services, there’s little reason to enter a skirmish over who counts audiences better, says Kevin Krim, EDO’s CEO. He has experience testing the theory. Krim was among the executives then at CNBC who in 2015 decided to stop using Nielsen ratings to negotiate with advertisers for the price of commercials in its daytime business-news programming. The network has never reversed itself.
In some ways, Krim says, the struggle is already winding down. He points to “The Bear,” the FX program that runs primarily on Disney’s Hulu. “What number did ‘The Bear’ do last night? What was its rating? Those aren’t the questions that come to mind, because we all know everybody is watching it at different times,” he says. “Most of streaming is no longer aggregated in a single moment in time. The size of the audience is less of a dominant question.” As time goes on, he suggests, advertisers will invest their dollars in media that drives more response among likely customers.
This isn’t Norton’s first investment. He’s already had experience investing in early-stage entities, including Uber and CrowdRise, a fundraising platform that was eventually purchased by GoFundMe. He says he has simply found another way to tell stories. Acting, writing and directing represent a traditional path to such a goal, he says, but figuring out a better financial model for the entertainment industry is another. “I find them both to be very creative,” he says of his pursuits in finance and entertainment. “Building a company is a very creative act, and it’s full of storytelling and communication.”
His interest in the ad-tech space was spurred initially by trying to figure out if he and some cohorts could help movie studios market their films better. Norton felt studios were quickly becoming disposed to invest only in big tentpoles or small films that required talent to work for scale or profit participation. If only the studios could feel more confident in the way they spent to open their films, Norton believed, they might be willing to broaden their appetite to include riskier projects — the kind backed by directors such as David Fincher or Wes Anderson, with whom Norton has collaborated. “He was very frustrated by an all-or-nothing marketing model that was hurting creators’ ability to get the art they wanted to do done,” says Krim.
EDO isn’t only analyzing search data. Norton clearly keeps a close eye on entities like iSpot, Comscore and Videoamp — three of the companies that have struck their own alliances with networks in a bid to supplant Nielsen’s dominance in the sector. He thinks some of those potential rivals may have overpromised what they can do.
“Nielsen isn’t going away,” he cautions, adding: “I think you should never get infected with the hubris of thinking that you’re just going to replace or own or dominate a very complex ecosystem.” He believes Nielsen, which is one of the companies using EDO analytics, retains strong advantages in the marketplace, capabilities that would take others billions of dollars in capital to build out over time.
EDO intends to keep forging ties with other parties, says Krim, including media agencies and advertisers, as well as parties in other countries. He even thinks Apple, which currently does not offer an ad-supported tier for its AppleTV+, might one day need the company’s services. He notes Apple already shows ads during its Major League Soccer coverage. “I think it’s a natural progression,” he adds.
Should EDO continue to gain ground, Norton could find himself in the unusual position of building a company that helps set the value of content that he has produced or directed — or even in which he stars.