• by Joe Mandese , November 9, 2010

The marketplace of out-of-home video networks continues to expand, and if Nielsen Co. has anything to say about it, it will be researched, planned, bought and posted like another extension of the traditional TV advertising marketplace. That's the underlying premise behind Nielsen's so-called "Fourth Screen Report," a quarterly series of studies measuring the burgeoning place-based video marketplace in a way that can be compared with conventional TV audience impressions, so that advertisers and agencies can plan it as an extension of their TV advertising mix.

 

But unlike the conventional TV universe, which theoretically is limited by the number of people and the amount of time they spend watching in U.S. TV households, the audience for place-based video networks theoretically is infinite, and is limited only by the number and variety of places that they can be installed in, and their inclusion in Nielsen's report.

That's a great business for Nielsen, which has helped cultivate similar extensions of the TV advertising marketplace in the past, including cable TV, syndicated TV, and unwired television networks, and the Nielsen executive in charge of the studies has no compunctions about the analogy that Nielsen effectively is making a new market currency for place-based video networks looking to compete with traditional TV suppliers.

In fact, that executive, Nielsen Executive Vice President Paul Lindstrom, likens the new Fourth Screen Report to the way Nielsen developed measurement systems for the U.S. TV syndication marketplace, in which programs frequently are televised at different times, in different markets, but which Nielsen aggregates into "gross average audience" estimates that have enabled syndicators to compete directly with conventional TV networks.

"It's a little like syndication in the old days," Lindstrom explained to MediaDailyNews during an exclusive briefing on Nielsen's latest Fourth Screen Report, which adds new place-based video networks, and significantly increases the number of measurable audience impressions in the market.

According to the latest report, which covers the second-quarter of 2010, there now are 20 networks, operated by 13 companies that are being measured, and they are generating a total of 435 million "gross monthly digital ad exposures."

The definition of an ad exposure in the place-based video marketplace has been an evolving process, as Nielsen works with operators to come up with metrics to compare their exposure to people viewing their content in a range of locations - from bars and restaurants to health clubs to big retail outlets.

Nielsen added seven new network operators from its last report, and Lindstrom said it will add five more in its next report, with plans to continue adding as many as want to pay to be included and for whom Nielsen can compute comparable metrics for.

Lindstrom concedes that it is a work in progress, but he is bullish on the long-term prospects for the medium, and for Nielsen's opportunity within it, because it is a medium that requires an organizing principle, or a common currency, that Nielsen effectively provides.

"What we are trying to do is at least get the rules together," Lindstrom says, adding that the process can differ among networks based on where they are located, how they are installed, and what kind of traffic and transactional data Nielsen can access for them.

But he says those obstacles generally are not too great, and that there usually are some common denominators among place-based video networks that make them comparable and able to be included in Nielsen's reports.

While the methodology may not be directly comparable to the way Nielsen measured cable and syndicated TV in their early days, Lindstrom projects that the effect Nielsen's new reports will have on the marketplace will be similar.

In fact, he said Nielsen already is beginning to develop media planning modules to help agencies develop key media planning metrics for calculating the value of place-based video networks in their TV mix, including things like reach and frequency, but also factors like "underdelivery," a concept that was used so effectively by the cable TV industry to compete with traditional broadcast networks.

Underdelivery means that a medium does a relatively poorer job of delivering a key audience segment that may be valuable to advertisers. Cable TV networks often used the fact that they were initially distributed into more upscale, and younger households to pitch agencies and advertisers that excluding cable from their TV advertising plans meant they were under-delivering younger, upscale audiences in their media plans.

Lindstrom said that some of the early research on place-based video is yielding similar results. For example, he said Nielsen's analysis shows that place-based cinema networks measured in Nielsen's reports deliver more men 18-34 who attend movies than conventional TV networks do.

Lindstrom says that underdelivery concept may also be applied to develop sales and planning strategies targeting young, affluent people who are exposed to video programming and advertising in health clubs, or other places they are known to congregate.

Ultimately, Lindstrom says the Fourth Screen Report will become better and more valuable to advertisers and agencies as many types of networks, representing more types of locations are included, but that over time, it will help the placed-based video marketplace grow its share of TV advertising budgets.

Placed-Based Networks

(Exposures Per Visit)

Total Day	Total 18+
	Visits	Exp/Visits	Total Exp
AMI	3,441,743	11.4	39,218,884
Access 360-AMNTV	5,494,428	3.6	19,549,174
Best Buy	32,136,859	0.7	22,961,442
GameStop TV	14,754,089	1.2	17,356,880
HCMN	4,580,638	3.3	15,130,603
indoorDIRECT	16,571,970	0.9	14,596,469
Outcast/PumpTop	18,302,542	1.0	18,537,707
PRN HDTV	127,552,877	0.5	61,535,226
RMG Fitness	10,467,244	1.5	15,857,875
TargetCast	10,264,337	5.1	52,308,475
The Hotel Networks	9,827,248	2.3	22,667,844
TouchTunes	7,368,487	13.9	102,072,577
Zoom Fitness	18,277,601	1.8	33,310,401

 

Source: Nielsen Co.'s Second Quarter 2010 "Fourth Screen Report." Visits are the number of sum people who contributed 1 or more exposures during a visit. These are not uniques. A person going to the same location on two different days would count twice.