In a move that will enable the burgeoning digital out-of-home media marketplace - especially place-based video networks - to be planned and bought alongside traditional TV networks, Nielsen this week released the first edition of a regular quarterly report that will enable advertisers and agencies to compare their audience reach with TV and, and eventually, with other screen-based media such as online and mobile video. The aptly named "Fourth Screen Network Audience Report," initially features 10 place-based networks, including ones distributed in movie theaters, health clubs, restaurants, and even gas stations, and Nielsen expects many more to join in the next several months.
Aside from being a potentially lucrative new revenue stream for Nielsen, the report provides important context and infrastructure for the rapidly growing digital out-of-home marketplace, and comes as its trade association the Digital Place-based Advertising Association (DPAA) renamed and repositioned itself (from OVAB, or the Out-of-Home Video Advertising Bureau), in part, to more directly compete with TV advertising mindshare and budgets (MediaDailyNews, March 24).
When OVAB originally launched three years ago, it was modeled after the Cabletelevision Advertising Bureau (CAB), which did a similar job in the early 1980s of bringing the infrastructure, and research, necessary for a legion of cable networks to compete directly for share of TV advertising budgets. A critical component of that game plan was working with Nielsen to develop the methods and metrics necessary for advertisers, planners and buyers to compare the two television platforms.
Nielsen's new Fourth Screen report begins to do something similar for place-based networks, and while many of them have seemingly disparate forms of distribution, content, and audience experiences, Nielsen has managed to pool them together in a way the creates a common denominator akin to TV's advertising coin - the GRP, or gross rating point - based on pure audience impressions.
Importantly, those impressions, which Nielsen dubs "ad exposures," eventually can be compared alongside conventional TV ratings, and eventually with online and mobile video impressions that Nielsen says it is looking at developing as well.
"The basics of the calculations we are using are certainly consistent with the normal use for ratings," says Paul Lindstrom, a senior vice president at Nielsen who championed the development of the digital out-of-home measurement system, and the new Fourth Screen report.
Lindstrom says that Nielsen's method takes into account the various ways that each network is distributed, but utilizes a common means of estimating their audiences based on a "census of transaction data" that Nielsen factors and adjusts based on the unique elements of the environments their video content and advertising are viewed in. In the case of a movie theater network like National Cinemedia or Screenvision, Nielsen works with theater box office receipts. In the case of an elevator network like Captivate, Nielsen works with audits of the office buildings they are located in. At gas stations, Nielsen works directly with transaction receipts from the pumps.
While each network requires slightly different configurations, Lindstrom says it is Nielsen's ability to set common rules and produced a harmonized audience estimate that makes the new report work.
The report is likely to cause a stir among other screen-based media that are also fighting for a share of national advertising budgets, especially Nielsen's traditional base of TV network clients. While many of those clients, including NBC Universal and CBS Outernet, play in the place-based network business, many other may look askance at Nielsen's push to create a new advertising marketplace currency that enables advertisers and agencies to compare out-of-home media directly with TV.
And those comparisons can be significant, according to the data released by Nielsen this week.
In the last four months of 2009, Nielsen estimates that U.S. adults 18 years or older were exposed to 237 million video ads per month in the ten location-based video networks. Nielsen estimates those exposures mean that more than half (54%) of the adult population were exposed to a place-based video ad during that period.
While that number may seem abstract, Lindstrom says it is directly comparable with TV's audience reach, and that the numbers can be further distilled in ways that compare directly with network TV's trading currency, the so-called C3 ratings. According to Nielsen's estimates, the combined video ad exposures of Nielsen's two cinema network clients - National Cinemedia and Screenvision - delivered an average of 61.7 million adult viewers during October 2009, many more times the TV networks' prime-time average of 3 million viewers age 18-plus. That means it took about 20 prime-time TV commercials to reach the same audience equivalent as a typical month-long advertising buy on the two cinema networks. While that comparison might seem a little apples and oranges, Lindstrom noted that is the way the cinema networks are sold, and how advertisers and agencies buy them.
Nielsen and its clients no doubt will have to make other adjustments to begin comparing other place-based networks, and to compare Fourth Screen sources with the other three screens Nielsen says it is committed to measuring and integrating into something equivalent to TV's coveted GRP (gross rating point).
In the next several months, Nielsen plans to begin adding dozens of other place-based networks to the report, including some in big retail-based platforms. In each case, Lindstrom said Nielsen will work with its clients to come up with the best methods for calculating their audiences based on a census of transaction data, and in factoring it to come up with reasonably comparable audience estimates for advertisers.
"What we are attempting to do is create a sizing or a context to compare these networks," he said, adding that it is unlikely Nielsen will ever produce anything analogous to its so-called pocketpiece reports for place-based networks, or to list them alongside conventional broadcast and cable TV networks.
The precise value of the audience estimates, he said, "belongs in the negotiating process between the buyers and sellers. But we at least know, in this case, what the size of the audience is."
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