Ratings and ranking systems are a part of almost every industry these days. From finance and media to sport and music, people lap these things up.

I can’t stand them myself. In my humble opinion they make people behave all weird. Like moths attracted to a burning hot light bulb. They know it might end in 3^rd degree burns, but they just can’t help themselves.

On the one hand ratings make a lot of sense. Rating things attempts to show what’s good and what’s bad and what’s popular and what’s not. This allows people and companies to make more informed decisions. The problem is they are easily manipulated and arguably driven by rather shady motivations.

Whether it’s buying the latest single, making a bet, an investment or spending marketing budget, various forms of ratings heavily influence what people do.

You only have to look at the financial crisis to highlight how pointless they are.

Millions of dodgy sub-prime mortgages were given goodratings by official organisations just to keep the money rolling in. This Time quote pretty much sums things up:

“But ratings also became a stamp of actuarial approval that often let investors and regulators skimp on their own due diligence”

Now I’m know financial whizz, I work in advertising, but how does USA have a perfect credit rating despite being one of the most in-debt countries in the world, coming a whisker away from defaulting?

Media buying around TV ratings is another example of how reality is distorted. Brands spend billions buying up the ad breaks of the highest rating shows. Now I’m not against TV advertising I just think it’s way over priced for its impact.

TV has never been a better medium for advertising the media agencies and networks will tell you. Ratings are up, and more and more people are watching TV (this is true). As a result one 30 second spot in The Voice will cost you $100K to ‘reach’ approximately 2m Australian.

Why do companies do it? It’s supposedly the quickest and easiest way to reach a lot of people with your gospel. Again this is fundamentally flawed.

It’s projected. It assumes that people are actually watching the ad. You only pay for the actual TARPs/GRPs I hear you say. Have you ever met anyone that actually has one of those mythical little boxes that records the sound of the show to check you have watched the ads – of course not, but that’s beside the point. And just because it’s recorded the sound it still does not mean I have watched the ad break let alone remembered it.

Marketers aren’t very good a observing their own behaviour. The front room is full of distractions. I could have checked my emails, sent a tweet, checked my Facebook account, played Angry Birds or God forbid spoke to my Wife, made a cup of tea or had a number two.

Media agencies are even peddling this point of view about time-shifted viewing not really affecting the situation; they are just watching more TV. Who does not fast forward ads on shows you have recorded? In fact there are so many ads on some shows I have to record it because it’s impossible to watch it at the set time.

Again not to say TV isn’t a good medium, just don’t always follow the high rating shows. There is a better way. The problem is that people don’t get sacked for creating TV ads to plonk in the highest rating shows. It’s not their fault if it doesn’t work, it must be the creative, and after all media buying and TV ratings is all scientific like. Well it’s not, it’s designed to keep people in Jags and I’m amazed how the industry just takes it.

Ratings completely mislead industries and make organisations take its eyes of the bigger problem and ultimately the prize. Australian networks are more interested in driving prime time ratings on one or two shows to sell ads than creating content people want to watch.

Brands and agencies spend way too much time and money trying to fill these breaks rather actually making stuff people want.

Ratings give people an overinflated confidence and should only be used as I guide. You need to ask the tough questions even if you can’t measure stuff 100%. Take them on face value and you will get fixated on the wrong goal.