Every Breath We Take

A.C. Nielsen is watching us

A dark shadow might have fallen across his face when he heard the question. "Of course I am concerned about Nielsen," says Jeff Chester, executive director of the Center for Digital Democracy, as if he'd been asked his opinion on a 10,000-pound gorilla combining forces with Godzilla - instead of the Nielsen-Google partnership. "Certainly Nielsen has a prominent place on the privacy advocate's watch list." Just wait until Mothra gets here.

Over the last few years, Nielsen has exhibited a monstrous appetite and the grasp and reach of a giant squid from 20,000 Leagues Under the Sea. The television ratings giant has acquired a handful of companies and struck deals with several others, bolstering its supremacy in media measurement and staying relevant in a rapidly digitizing world. Of course, it's a world in which Nielsen has been sharply criticized, accused even of being monopolistic.

Nielsen does have its extensive tentacles in most media, one of the reasons it's so indispensable to marketers and industry observers. But has it become a monster monopoly that's got the information market cornered? And, perhaps more important, has it aggregated so much private data that it's a danger to consumers?

When you start trying to answer those questions, you begin by considering its catalogue of companies.

Last year, the company purchased Telephia, the mobile phone research firm, and bought the remaining shares of BuzzMetrics, which tracks online word-of-mouth. Most recently, the company made a "strategic investment" in NeuroFocus, a firm that specializes in applying brainwave research to advertising, programming and messaging.

In a move sure to continue raising eyebrows, Nielsen also formed a partnership late last year with Google to marry its demographic data with data from the Google TV Ads platform. In addition, Nielsen also measures minute-by-minute commercial ratings and provides "live plus seven day" ratings for television programs that factor in digital video recorder playback of shows.

In early February, Nielsen rolled out VideoCensus, which lets media companies tag individual pieces of online video. The product is meant to provide a more detailed report on both overall online video viewing and specific views on certain Web sites. Nielsen has interests in other areas, too. The company tracks consumer purchases through technology installed in two-thirds of cash registers in the United States. Nielsen also measures book sales, out-of-home marketing, product placement, music sales, and even sales of prescription drugs.

That's a lot of data consumers are placing in the hands of one company. Information, as the saying goes, is power. That makes Nielsen both a force to be reckoned with and a key company for privacy advocacy groups to watch.

War Is Peace

Center for Digital Democracy's Chester is more concerned about Web companies such as Google, Yahoo and Microsoft, because they are in a position to immediately act on the information they glean about consumers from search results - for instance, by using that data for ad targeting. Nielsen as a third-party provider is not as worrisome, he says.

Indeed, the prevailing consensus among clients and media agencies is that Nielsen is not Big Brother. The company has at its command reams of information on consumers' habits, desires, purchases, predilections and, perhaps, addictions, but says it does not tie that information to specific individuals. What Nielsen knows, it knows anonymously. It knows what people like you and me - people who live in a certain neighborhood, drive a certain type of car, make a particular amount of money, have this number of kids - generally like to do and buy. But the company doesn't know what you or I, as distinct individuals with names and Social Security numbers, are doing at any given moment. It can't tie us to our purchases: not what gas we buy, or which pills we pop, or which books we escape into late at night.

Besides, clients and media agencies like the fact that the company has been growing in new directions and acquiring properties that help it provide more detailed reports about media consumption. The holy grail of advertising is to understand consumption across all media. How is an episode of Desperate Housewives, for instance, consumed across digital video recorders, television, video-on-demand, the Internet and mobile phones?

ESPN will know that information soon. ESPN and Nielsen, through the Nielsen Connect arm of the company run by advertising veteran Jon Mandel, are working on what's known as the "convergence hub." That's the first project of its kind for the measurement firm and will aim to measure how ESPN consumers use the TV and the Internet in the same home. "We have no knowledge of the interaction. But we want to link TV and the Internet to mobile," said Artie Bulgrin, senior vice president of research and sales development at ESPN. "We want to know how they are using it at the same time, how they are using it at different times."

He expects to receive the first data set from the project this month. Ideally, ESPN would like to use that data to sell across all three platforms based on the combined usage figures. "We need a currency for integrated media campaigns," Bulgrin says.

But he's cautious. "There is a 'wait and see' attitude on our part to see if this all comes together in an effective way. We approach anything with some trepidation because Nielsen has a history of being late, and its software has been criticized for being slow or late or not easy to use," he says.

Other Nielsen clients want integrated data, too. "I would love to know how many unique people watched Army Wives online, on TV, on VOD, on mobile, on iTunes, and how much time they spent with the show," says Mike Greco, executive vice president of research at Lifetime. "That lets us be smarter programmers and lets us offer advertisers the best media mix."

That data will come soon, Mandel says. He joined Nielsen as the CEO of Nielsen Connect, the division of the company that's charged with linking data across divisions and panels to provide the composite pictures that clients are clamoring for.

The key in marrying data from different sources is to be judicious for each client, Mandel says. "What do people really want linked?" he asks. "The danger with too much research is if the client says 'I am thirsty' and we drown them with a fire hose. Our job is to give them the glass of water that quenches their thirst and solves the problem."

In ESPN's case, that would mean being able to tell the network whether sports fans who drink Coke, Pepsi or Dr. Pepper also watch ESPN, how many of those people also visit ESPN online and which percentage watch ESPN on Verizon's mobile service. "Then ESPN could do an ad for Dr. Pepper across those three screens and decide what proportion it should spend across the three screens," Mandel says.

But if Nielsen can do that, then by extension, does it know I bought Diet Coke yesterday at the 7-Eleven two blocks from my house? No, Mandel says. Nielsen knows the attributes of people who buy Lexus cars and Tide. Nielsen knows their general media usage and the type of stores they like. Nielsen might even know that people who are on Lipitor also tend to buy Vitamin E. That information can be valuable to marketers looking to reach specific cross-sections of society. But Nielsen claims it doesn't know what specific individuals do or buy. Even as Nielsen moves into more census-based measurement, Mandel says he's not concerned about privacy because a census is rarely a 100 percent true reflection of the population, and because they're still anonymously conducted.

One-Stop Shop

As advertising becomes more refined and targeted, however, cable companies may be the ones managing consumers' privacy concerns. "As we move forward into more census-based measurement, privacy becomes an issue," says John Spiropoulos, who heads the Video Investment and Activation research group at MediaVest. "But companies are very conscious of that, and you only get information at a certain level of granularity because cable operators don't want this to come back to bite them."

Still, Nielsen sure does know a lot. In many ways, it's the ultimate one-stop shop. A client would use A.C. Nielsen to determine how to price a product, BuzzMetrics to see who is talking about it online, Nielsen Online to measure Web site traffic, Nielsen Mobile to track mobile usage, NeuroFocus to help design packaging for a product, Monitor-Plus to see what the competition spent and Claritas to figure out which demographic will buy the product - not to mention TV ratings.

Whew. That is a dizzying array of data that is all coming from one company. Which is why the industry might want to ask the question: Is Nielsen a monopoly?

Some clients say no, pointing to competitors like TNS. "Nielsen is amongst two or three very large multinational research companies that are trying to leverage their various businesses across the properties," says Jack Wakshlag, chief research officer for Turner Broadcasting. Like others, he's keen to unlock some of that data. For instance, pharmaceutical is an important category for CNN. "It would be interesting to provide pharmaceutical advertisers with information about programs on channels and the viewing patterns of people who buy certain pharmaceuticals," he points out.

Nielsen and other measurement companies may give privacy watchdogs more cause to worry in the coming years because marketers are eager for as much consumer data as possible. And profit is a powerful motive. "Marketers are salivating to get this type of behavioral information to hyper target," says Brad Adgate, senior vice president of research at Horizon Media. "Look at Amazon and iTunes. They are trying to look at what you're watching and your transactions and the type of commercials you watch and serve more relevant ads based on what your behavior has been," he says. "Privacy is one of the obstacles that will have to be overcome for behavioral targeting to come to fruition. Moving forward, give or take, five years, they will know a lot more than they know now."

Despite Nielsen's tight grip on the television world, the Internet is an area where the company isn't the biggest kid on the block. Privacy and competitive concerns are not as relevant to media agencies focused on digital. Internet marketers rely on data from Nielsen, comScore, Quantcast, Google, DoubleClick, Omniture and others, says T.S. Kelly, senior vice president and director of research and insight for Havas Digital.

"The Internet is a patchwork," Kelly says. "Whatever consumers are doing online, that data is being collected from disparate partners. DoubleClick could be running my video campaign, and Yahoo could be running my display campaign. Nielsen, for the foreseeable future, will have an important voice in online measurement, but it's a growing chorus of voices, and that to me is important because of the complexity of content, the complexity of the distribution and the complexity of the platform."

But that could all change in the coming years - unless, of course, Nielsen sinks back into the murky depths of privacy regulation. Though you can be sure it would emerge a short time later for the inevitable sequel.

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