Commentary

I've Got A Secret: Nielsen Is Measuring Internet TV Viewing

In 2006 I was part of the Nielsen team that developed a cross-platform strategy called Anytime Anywhere Media Measurement (A2/M2), which set out to integrate measurement of video viewing across various screens. 

Some of what Nielsen planned to do now seems quaint.  Anticipating that the main platform for mobile viewing would be the iPod and other MP3 players, Nielsen developed a "Go Meter" to measure video playback of video podcasts.  Of course this strategy had to be abandoned when consumers started buying smartphones in bulk.  And now that tablets are gaining market share, Nielsen's strategy for measuring smartphones is changing before the original approach even came fully to life.

Although media technology has advanced faster than the industry's ability to develop profitable business models, Nielsen's A2/M2 strategy did correctly identify one measurement challenge that remains with us today: how to integrate ratings for television and online viewing. 

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Perhaps the most important and farsighted A2/M2 initiative was the decision to measure Internet viewing within Nielsen's National People Meter panel.  This is the same panel used to measure national television viewing and, once implemented, Nielsen would be able to tell who was watching what on both televisions and the computers.

A lot of work went into this effort; Nielsen had to develop a meter to install on panelists' computers, it needed to test recruitment methodology to make sure response rates remained high, and it had to create back-end systems to capture, integrate and report the online viewing into the regular ratings reports.  And all of this had to be continually reviewed and blessed by various industry committees.

In April 2011, nearly five years after announcing its intention to integrate online and television ratings, Nielsen began to do just that through its Extended Screen program.   Media companies that stream their TV shows over the Internet can now have their online computer and laptop viewing counted in the TV ratings.  Online viewing over mobile devices, including tablets, is not yet included in the ratings.

Yet this step, which would have once been considered a huge leap forward, was greeted almost with indifference by both the industry and the media.  (Note: these Internet TV ratings are completely separate from Nielsen's more highly-publicized Online Campaign Ratings, which measure online display advertising across all publishers.)

Part of the reason for the low-key reaction to Internet TV ratings is that Nielsen currently measures only online programming that contains the same ads that were shown on television.  As a result, online viewing of "The Closer," which TBS streams with the same commercials as part of its TV Everywhere initiative, is included in Nielsen ratings, but online viewing of "The Office," which is streamed on Hulu or NBC.com with different commercials, is not. 

Nielsen's policy is based on the fact that the key Nielsen number for prime-time TV is the so-called "C3" rating, which measures how many people watched the commercials, either live or times-shifted, up to three days later.  After all, advertisers want to know who saw the commercials, not who saw the show.  So by that logic, all commercials need to be included in the online streaming to be included in C3 ratings if advertisers are to be treated fairly. 

Yet most media companies do not include the commercials when they stream shows online.  Either they haven't figured out technically how to get Nielsen-coded versions of their programs online, or they are pursuing a different business model altogether, such as the Hulu approach, where different commercials are shown. 

Of the major media companies, only Time Warner's Turner Broadcasting is currently benefiting from Nielsen's Extended Screen program, although others are testing or in discussions to test.  The added viewing from streaming is not large  -- in the thousands and sometimes in the tens of thousands ---but that should grow now that TBS has launched a major advertising campaign to promote TV Everywhere viewing. 

Nielsen has said it will also measure streaming that does not include the same commercials ,so that viewing on Hulu and the networks' own websites can be included in companion "program-only" ratings.  Nielsen has not provided a firm deadline for doing this, and it's not clear what will be gained by this  feature (other than bragging rights) if advertising continues to be sold on the basis of C3 ratings.

What the limited response to Nielsen's online TV ratings tells me is that technology moves faster than business models.  I don't think anyone expected five years ago that media companies would still be trying to figure out how to monetize online viewing.   Nielsen is essentially still waiting for advertisers and programmers to reach a consensus on how online commercials should be counted.

Or perhaps this issue isn't as urgent as it seemed five years ago.  Even now, after all the attention paid to online television, 98% of all TV viewing is done the traditional way: via a television set.  Intuitively it seems likely that this will change eventually, but perhaps the industry won't be able to reach a consensus until there is a real, rather than anticipated, crisis of unmeasured viewing -- which, of course, the iPad could portend.  Maybe.  We'll see.

4 comments about "I've Got A Secret: Nielsen Is Measuring Internet TV Viewing".
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  1. Joe Mandese from MediaPost, September 13, 2011 at 3:08 p.m.

    Good piece, Gary. Being a skeptical journalist, I have to believe there are other reasons why more big TV clients haven't embraced extended screen viewing, but I can't figure out what they are. Turner's Jack Wakshlag has suggested it's because they simply don't want to spend the extra money on the data and the engineering costs, but I think there's more to it than that -- that its cultural, and that "TV networks" just can't think of themselves as online distributors in that way.

    I don't know. But I do know in Nielsen's call to brief analysts and investors this morning, Steve Hasker said Nielsen had already perfected the technology to include viewing of TV shows on smartphones and tablet computers, but the big hold-up is "the industry."

    "What we have done is extended C3 into the online environment, and we are well positioned to extend it into smartphones and tabelts as well, as soon as the industry is comfortable with that. When the time comes, we will add mobile," he said.

    Based on the response to the online portion, I would suggest that he doesn't hold his breath.

  2. Neil Ascher from The Midas Exchange, September 13, 2011 at 5:41 p.m.

    An equally large, or perhaps larger issue is how should other video content be treated? I'm not talking about UGC of dogs catching frisbees. In addition to watching TV shows, people are viewing other high quality, professionally produced content on a variety of screens. I want to be able to talk to my clients about video, not just TV but until there is directly comparable and integrated measurement, it's a very tough sell.

  3. Joe Mandese from MediaPost, September 13, 2011 at 7:26 p.m.

    Good point, Neil. I believe Nielsen has a product(s) for that too.

  4. Gary Holmes from Gary Holmes Communications LLC, September 14, 2011 at 12:24 p.m.

    Joe, you ask a very interesting question. I think there is some truth to the assertion that for some media companies, tagging the online ads is difficult, especially if they want to insert different ads after three days. However, my guess is that they could figure it out if it was a priority. I will be interested to see how quickly Nielsen can add iPad viewing to C3. I think the technical issues can be addressed pretty quickly but whether the industry will quickly sign off on another alteration to C3 is remains to be seen.

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