A.C. Nielsen (RIP), Shiny New Objects And The Elephant

by Mark Lieberman, Oct 12, 2011, 11:34 AM

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With Steve Jobs’ passing last week at too young an age, we lost the single most influential technology icon ever. The media industry lost another key driving figure in Arthur C. Nielsen, Jr., who also died last week at the ripe old age of 92.

There aren’t many executives whose names become synonymous with the service they provide; Nielsen was one of them. He took his dad’s small, Chicago-based market research firm -- one of the first to measure food and drugstore sales -- and turned it into what would become a billion-dollar operation. Whatever your opinion of the Nielsen Company’s various products, there’s no question that Nielsen (who actually sold the company back in ’84) helped make our industry what it is today.

Nielsen was there when what we now call “audience measurement” got its start back in the 1930s. At the time, radio was pretty much all the media there was to measure, and Nielsen jumped in with both feet. His firm’s tool of the trade at the time was the Audimeter, and its goal was to provide a tool for buyers and sellers of advertising to measure ad effectiveness. With the Audimeter, Nielsen’s firm sought to answer a critical question: Did the people who listened to (before they watched) an ad actually buy the product being advertised?  But wait. Since information about purchase behavior was not available, viewing behavior became its proxy.

The story of measuring ad effectiveness is one of Shiny New Objects -- gadgets that excite us until the next one comes along -- and the Audimeter was the very first one. Nielsen used it to track radio listening in a sample of 1,000 American homes; soon he’d be doing the same thing for television.

When Americans started buying TV sets en masse in the early 1950s, Nielsen was ready. He brought out a television-tweaked version of the Audimeter in 1950, and three years later introduced the diaries that (incredibly enough) remain in use today. Demographics and the “Opportunity To See” (OTS) concept were born. His key question became: Did anyone in a Nielsen panel of thousands in a specific age range and gender watch a program -- and therefore have an opportunity to see a particular commercial? (Note that there was no information about whether anyone in the panel ever actually bought the product being advertised.)

The AC Nielsen Company (as it remained through Nielsen’s tenure) evolved over the course of the decades, and so did the audience-measurement industry’s Shiny New Objects -- always with the goal of measuring ad effectiveness. The ‘80s brought Nielsen’s Peoplemeter, which let people pause the unit that tracked their viewing when they made a snack run or stopped the (gasp!) VCR. Smaller firms began to make headway around that time too, introducing different ways to measure ad effectiveness: Online focus groups began to test for new metrics like brand awareness and recall. More recently, “biometric response” made its way into the marketer’s vocabulary. Goodbye Peoplemeter, hello electrodes.  And now social media has become the Shiny New version of Nielsen’s OTS.

The challenges presented by VCRs, significant 30 years ago, are nothing compared to those we face in our age of DVRs, online streaming, and multiscreen viewing. Of course, the opportunities to measure are much greater too, thanks to the robust data generated by cable and satellite providers and retail outlets.

Yet, with every Shiny New Object, the industry simply invents another proxy for understanding purchaser behavior. As a colleague pointed out to me the other day, when we employ just one of the tools in our measurement arsenal (take your pick), we’re still no closer to understanding the big picture than the blind man in the old Indian parable was to “seeing” the elephant. Each tool gives us only part of the story, and if we want “to learn the truth,” as the first blind man says, “we must put all the parts together.” 

But what is the elephant in the room, so to speak?  It’s the question marketers have always wanted to answer: Did a person who was exposed to an ad ever end up actually buying the product being advertised?

Can we finally answer? Are we up to the task? Nielsen’s legacy is substantial, but is it enough?  In 1974, a trip to India inspired Steve Jobs to turn parables into action and eventually change the world.  It’s time for us to do the same for our world.  

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