Why Nielsen's Archaic Standard is Right

  • by , September 23, 2004
Today, there are two battles going on in the media business that we can regard as object lessons. One is taking place in television and the other in interactive. Both of these object lessons involve efforts by some to standardize how an industry looks at itself and by others to innovate within the industry.

In television, Nielsen's antiquated ratings system is under continued fire for its diary-based method of collecting data on users' viewing habits. Since the advent of digital technologies, we media types have been continuously puzzled by the lasting use of this antiquated method. Cable companies, the innovators in this battle, are pushing for more precise measures and trying to force Nielsen to replace their old system with one that provides information right from viewers' homes electronically, via an appliance that provides input automatically and minute-by-minute.

In interactive, the battle that is being waged involves behavioral targeting companies Revenue Science and Tacoda. Tacoda's recently launched "Tacoda Targets" divides Web users into 22 marketing segments such as: auto buyers, diet and fitness, golfers, parents, etc.



Revenue Science, Tacoda's chief rival, responded to Tacoda's announcement by proclaiming their skepticism that Tacoda's guidelines would ever yield useful marketing information. More to the point, Revenue Science correctly pointed out that only Tacoda clients stood to benefit from these measures, implying that the marketing segments had nothing to do with standardization and everything to do with productization.

I'm all for the idea of a universal standard, as long as it measures the output quality of segments for advertisers, rather than defines them by a minimum set of behaviors. Most importantly, it is absolutely imperative that this is a shared standard, or else it is completely meaningless. And until we all work to create relevant and lasting definitions that speak across technologies, we are failing in our efforts to streamline the targeting within this industry.

As anyone in this space knows, interactive ad shops regularly ask behavioral targeting firms to define standard audience segments across their network of publishing partners. All they care about is whether particular Web users are likely to purchase products. While it is necessary for us to answer those requests with actionable segmentation in the short term, it is equally necessary that we all work to create an accepted set of standards as a benchmark.

In the future, we can expect to see more and more shifting in television measurement toward quantification. Today, however, Nielson's archaic approach is an accepted and shared standard. The core idea utilized in the television industry is one worthy of adoption. They aren't competing with one another via any kind of "innovation," they simply utilize a standard so that marketers can measure the effectiveness of their ad spends. Our industry, however, continues to feature major players that launch their own "standards" exclusively, creating fragmentation among us and confusion among our clients. And the lion's share of ad dollars remain on the sidelines, away from interactive, just waiting for us to all get along.

This is not something best left to our trade associations. If each of the 20 largest marketing technology companies in the interactive space dedicated just 10 percent of their development dollars for one year to lateral innovation, not vertical innovation - that is, if we all focused on getting our products to work better together, instead of changing our products in their exclusive silos - we would make great strides toward the development of standards.

But as long as our measures more closely resemble a Tower of Babel than they do any industry standard, we'll all continue to look up at TV, wishing for their revenues while wasting ours on isolated productization with no relevance outside our own office walls.

R. Michael Leo is CEO of Trafficmac, which provides ad operations software, technology, and outsourcing services.

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